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THE FACTS
The first applicant, Mrs Margot Honecker, is a German national, born in 1927 and living in Santiago (Chile). She is the widow of Mr Erich Honecker, the former President of the Council of State (Staatsrat) of the German Democratic Republic (GDR), who died on 29 May 1994.
The other three applicants, Mrs Sonja Axen, Mrs Katrin Teubner and Mrs Sophia Jossifov, born in 1925, 1950 and 1953 respectively, are also German nationals, living in Berlin. Mrs Axen is the widow and Mrs Teubner and Mrs Jossifov the daughters of Mr Hermann Axen, a former member of the Political Bureau (Politbüro) of the Central Committee of the GDR’s Socialist Unity Party (Sozialistische Einheitspartei Deutschlands – “the SED”), who died on 15 February 1992.
The applicants were represented before the Court by Mr F. Wolff, a lawyer practising in Berlin.
A. The circumstances of the case
The facts of the case, as submitted by the parties, may be summarised as follows.
1. Background to the case
After the fall of the Berlin Wall on 9 November 1989 and during the period of transition preceding German reunification, which took place on 3 October 1990, Mr Honecker and Mr Axen requested the conversion of money in their bank accounts amounting respectively to about 235,000 and 250,000 GDR marks into Deutsche Marks (DEM) of the Federal Republic of Germany (FRG). The provenance of those sums was ordinary income (reguläres Einkommen).
On 6 July 1990 a select committee (Sonderausschuss) of the newly elected GDR parliament (Volkskammer) with responsibility for such matters asked Mr Honecker and Mr Axen to prove that the sums they had declared had been lawfully acquired.
In a decision of 27 September 1990, the select committee ordered the confiscation (Einziehung) of the money in Mr Honecker’s and Mr Axen’s bank accounts on the ground that each had:
“acquired personal advantages for himself and for others to the detriment of society and at the expense of the national budget and other public funds through the abuse of his functions, through the enjoyment of privileges that he had granted himself and through acts constituting a flagrant breach of moral standards.”
(“durch Missbrauch seiner Funktionen durch Inanspruchnahme von selbstbestätigten Privilegien und durch Handlungen, die einen gröblichen Verstoss gegen die guten Sitten darstellen, sich und anderen persönliche Vorteile zum Nachteil der Gesellschaft und zu Lasten des Staatshaushalts und anderer gesellschaftlicher Fonds verschafft hat.”)
The select committee relied on section 5(2) of the GDR’s Act of 29 June 1990 on proof of the lawful provenance of convertible funds (Gesetz über den Nachweis der Rechtmässigkeit des Erwerbs von Umstellungsguthaben – see Relevant domestic law below), also known as the Convertible Funds Act (Umstellungsguthabengesetz).
2. Proceedings before the domestic courts
(a) Regarding Mrs Axen, Mrs Teubner and Mrs Jossifov
On 17 October 1990 the applicants applied to the Berlin Administrative Court (Verwaltungsgericht).
In a judgment of 24 May 1993 the Berlin Administrative Court refused the applicants’ application on the ground that the conditions of section 5(2) of the Convertible Funds Act had been met because all of Mr Axen’s money came from savings acquired through abuse of official authority contrary to the public interest (Gemeinwohl).
Like the select committee, the Administrative Court considered that Mr Axen had acquired his wealth through the illegal use of a 25,000 sq. m plot of land, which he did not own and on which in 1986 he had had a holiday home built paid for in part by 6,500,000 GDR marks from public funds. The upkeep of the property, which had cost 200,000 GDR Marks, had also been publicly funded. Mr Axen himself had paid only a monthly rent of 271 GDR marks and so his personal profit had amounted to at least 3,000,000 GDR marks.
In a judgment of 1 July 1997 the Berlin Administrative Court of Appeal (Oberverwaltungsgericht) set aside the select committee’s decision and ordered that the accounts in question be unfrozen.
It found among other things that section 5(2) of the Convertible Funds Act did not apply to savings deriving from ordinary income, otherwise all money acquired in the GDR would have had to be assessed and deducted from convertible funds.
In a decision of 5 June 1998, the Federal Administrative Court (Bundesverwaltungsgericht) allowed an application by the State for the proceedings to be reopened and quashed the judgment of the Administrative Court of Appeal.
It held that under the Convertible Funds Act, which remained in force as a federal law (Bundesgesetz), and Article 3, no. 12, paragraph (b) of the Agreement of 18 September 1990 on the application and interpretation of the German Unification Treaty (Vereinbarung zur Durchführung und Auslegung des Einigungsvertrages) of 31 August 1990 (see Relevant domestic law below), administrative divisions of District Courts had jurisdiction to deal with appeals lodged under section 6 of the Convertible Funds Act. Moreover, it had been parliament’s desire, during the transition period preceding German reunification, for these cases to be settled promptly, conclusively and within a given time-limit and there had been no plan to establish the usual administrative remedies.
The applicants subsequently lodged a constitutional appeal with the Federal Constitutional Court (Bundesverfassungsgericht) on the ground that the previous court decisions had infringed their property rights and been disproportionate, as a breach of moral standards was not in itself sufficient reason for all of Mr Axen’s money to be confiscated. They also alleged that the Federal Administrative Court had contravened the Basic Law (Grundgesetz) because it had considered that the Convertible Funds Act and the Agreement on the application and interpretation of the German Unification Treaty set limits on the remedies available, whereas the law was not actually that clear. Furthermore, they maintained that the sole aim of the Convertible Funds Act had been to carry out arbitrary checks on the accounts of high‑ranking SED officials. Lastly, they submitted that the duration of the proceedings between the application to the Berlin Administrative Court on 17 October 1990 and the decision of the Federal Administrative Court of 5 June 1998 constituted a violation of Article 6 § 1 of the European Convention on Human Rights.
On 28 July 1999 the Federal Constitutional Court, sitting as a three-member panel, refused to allow the applicants’ appeal.
The Constitutional Court held that it was not a disproportionate infringement of property rights for parliament to provide under section 5(2) of the Convertible Funds Act that when GDR marks were converted into DEM, which represented a major revaluation, sums which were acquired by flagrantly immoral means and did not derive from the recipient’s own work (eigene Leistung) were to be excluded. The same applied to sums of money deriving from ordinary income which it had been possible to save as a result of advantages obtained by flagrantly immoral means. Furthermore, the fact that the select committee had, within the limits of its resources, concentrated on high-ranking SED officials was prompted by practical considerations but did not alter the general scope of the law. Nor, lastly, did the disputed decisions infringe the right to legal protection guaranteed by Article 19 § 4 of the Basic Law, as that Article did not guarantee the right for there to be a remedy.
(b) Regarding Mrs Honecker
In a judgment of 14 June 1999 served on the applicant’s lawyer on 6 September 1999 the Berlin Administrative Court upheld the main provisions of the select committee’s decision but ordered the release of DEM 12,630 corresponding to sums which had been paid in after the money in the bank account had been seized by the public prosecutor’s office on 6 December 1989; these sums derived for the most part from Mrs Honecker’s pension fund and had therefore not been acquired unlawfully for the purposes of section 5(2) of the Convertible Funds Act.
The Administrative Court upheld the remainder of the select committee’s decision on the ground that the conditions of section 5(2) of the Convertible Funds Act had been satisfied because the balance of the money in Mr Honecker’s account (DEM 215,613.07) derived from savings acquired by abuse of official authority contrary to the public interest.
It began by affirming its jurisdiction to decide the case under Article 3, no. 12, of the Agreement of 18 September 1990 on the application and interpretation of the German Unification Treaty of 31 August 1990 (see Relevant domestic law below).
On the merits, it pointed out that the select committee had accused Mr Honecker of spending public funds in the following amounts, among other instances:
(i) 44,000,000 GDR marks for the purchase of hunting estates and holiday homes (Schorfheide, Nossentiner Heide, Dölln and Gross-Dölln);
(ii) 800,000 GDR marks for fuel bills; and
(iii) 5,000,000 GDR marks for special supplies sent to Wandlitz estate, where the SED leaders lived.
The Administrative Court considered that Mr Honecker had acquired his wealth, inter alia, by:
(i) keeping for himself the grant of 240,000 GDR marks awarded to him as an honorary member in the GDR of the Bauakademie (under GDR law the grant was not intended for his personal use); and
(ii) using 4,000,000 GDR marks-worth of public funds to construct and fit out his private Wildfang estate, for which he had paid only a monthly rent of 120 marks, which he had moreover stopped paying after 1977.
The Administrative Court further held that the Convertible Funds Act violated neither the Constitution of the GDR nor that of the FRG.
The applicant did not appeal against that judgment.
B. Relevant domestic law
On 29 June 1990 the newly-elected GDR Parliament drew up an Act on proof of the lawful provenance of convertible funds, also known as the Convertible Funds Act.
Under section 1 of that Act, when money was to be converted, a check on the lawfulness of its provenance could be ordered, and an “ad hoc select committee” comprising 21 members of parliament was set up especially for that purpose.
Under section 2, persons with residences or companies with registered offices in the GDR or outside the GDR were required to prove on request that money declared for conversion had been acquired lawfully.
Under section 4, account holders were required to prove within ten days that the money in their bank accounts had been lawfully acquired and submit documents to that effect to the select committee.
Under section 5(1) the select committee was required to check using the documents thus provided that money declared for conversion was lawfully acquired.
Section 5(2) provided that money was to be considered to have been acquired unlawfully, inter alia, where all or some of it was obtained through criminally reprehensible, irregular (ordnungswidrig) or flagrantly immoral acts, acts constituting an abuse of state prerogatives or public office, or activities contrary to the public interest.
Section 5(4) provided that if it was suspected that an offence had been committed, a complaint had to be lodged with the relevant prosecuting authority (Strafverfolgungsbehörde). In that case, the select committee could give its decision only after the final decision of the prosecuting authority had been delivered.
Section 5(5) provided that if the select committee decided that funds declared for conversion had been acquired unlawfully, they were to be confiscated by the State.
Article 3, no. 12, of the Agreement of 18 September 1990 on the application and interpretation of the German Unification Treaty of 31 August 1990 reads as follows:
“The following provisions of GDR law shall remain in force after the accession [of the GDR to the FRG] has come into effect:
...
12. The Act of 29 June 1990 on proof of the lawful provenance of convertible funds, with the following provisos:
(a) In cases covered by the second sentence of section 5(4), ... the administrative division of the District Court within whose territory the total funds have been declared for conversion shall have jurisdiction to decide the case.
(b) That court shall also deal with appeals lodged under section 6.”
COMPLAINTS
The applicants maintained that the GDR’s Convertible Funds Act, the decisions of the select committee of the GDR Parliament and the Berlin Administrative Court’s judgments confirming the confiscation of the money in the bank accounts of Mr Honecker and Mr Axen, of whom they were the heirs, had infringed Article 1 of Protocol No. 1. They also relied on Article 14 of the Convention, taken together with Article 1 of Protocol No. 1, and on Article 6.
THE LAW
1. The applicants maintained that the GDR’s Convertible Funds Act, the decisions of the select committee of the GDR Parliament and the Berlin Administrative Court’s judgments confirming the confiscation of the money in the bank accounts of Mr Honecker and Mr Axen, of whom they were the heirs, had infringed Article 1 of Protocol No. 1, which provides as follows:
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
The applicants submitted, in particular, that the decisions of the select committee of the GDR Parliament to order the confiscation of the money in Mr Honecker’s and Mr Axen’s bank accounts constituted a disproportionate interference with their property rights, as the accusations made against Mr Honecker and Mr Axen had been unfounded.
The Court points out that “Article 1 in substance guarantees the right of property... It comprises ‘three distinct rules’: the first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property; the second rule, contained in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions; the third rule, stated in the second paragraph, recognises that the Contracting States are entitled, amongst other things, to control the use of property by enforcing such laws as they deem necessary in the general interest ... However, the three rules are not ‘distinct’ in the sense of being unconnected: the second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule...” (see, among many other authorities, AGOSI v. the United Kingdom, judgment of 24 October 1986, Series A no. 108, p. 17, § 48, Döring v. Germany (dec.), no. 37595/97, ECHR 1999-VIII, and Schmelzer v. Germany (dec.), no. 45176, 12 December 2000).
It cannot be disputed that the confiscation of the applicants’ money constituted an interference with their right to peaceful enjoyment of their possessions as protected by the first sentence of Article 1.
The Court must first determine whether the material provision in the present case is the second sentence of the first paragraph or the second paragraph.
The confiscation of the applicants’ money did, of course, entail a deprivation of possessions. However, it was effected under the general regulations introduced during the period before German reunification with a view to checking the provenance of funds in GDR marks declared for conversion into DEM.
In the Court’s view, the interference complained of therefore constituted a control of the use of property to be considered under the second paragraph of Article 1 of Protocol No. 1 (see AGOSI cited above, p. 17, § 51, and Raimondo v. Italy, judgment of 22 February 1994, Series A no. 281-A, p. 16, § 29).
As to whether the interference was lawful, the Court notes firstly that the measure complained of was based on the GDR’s Convertible Funds Act of 29 June 1990, which subsequently became a federal law of the FRG by virtue of the Agreement of 18 September 1990 on the application and interpretation of the German Unification Treaty of 31 August 1990. Under section 1 of that Act, a select committee of the newly-elected GDR parliament was required to determine whether money declared for conversion had been lawfully acquired, and sections 5(2) and 5(4) of the Act expressly provided that where it was found that such money had been acquired unlawfully, particularly through flagrantly immoral acts, it was to be confiscated by the State.
The Federal Administrative Court confirmed that the select committee had jurisdiction in the matter, and the Federal Constitutional Court confirmed that the interference complained of did not infringe the Basic Law and that the Convertible Funds Act was general in its scope despite the fact that it had been applied in practice to high-ranking SED officials.
In the Court’s opinion, this was not an arbitrary interpretation and it reiterates in that connection that its power to review domestic law is limited and it is in the first place for the national authorities to interpret and apply that law (see, among other authorities, Tre Traktörer Aktiebolag v. Sweden, judgment of 7 July 1989, Series A no. 159, p. 23, § 58).
As regards the purpose of the interference, the Court considers that, in the instant case, the interference pursued an aim that was in the general interest. It seemed legitimate for the GDR Parliament, after democratic elections, and subsequently for the FRG’s courts, after reunification, to check, in the interests of public morality, that the GDR marks declared for conversion into DEM had been acquired lawfully and to confiscate money that had been acquired unlawfully.
Lastly, the Court must consider whether the interference was proportionate.
In that connection, it points out that the second paragraph of Article 1 of Protocol No. 1 has to be construed in the light of the general principle set out in the first sentence of that Article. This sentence has been interpreted by the Court as including the requirement that a measure of interference should strike a “fair balance” between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights (see, among other authorities, Sporrong and Lönnroth v. Sweden, judgment of 23 September 1982, Series A no. 52, p. 26, § 69, and James and Others v. the United Kingdom, judgment of 21 February 1986, Series A no. 98, p. 34, § 50). The search for this balance is reflected in the structure of Article 1 as a whole and hence also in the second paragraph. There must be a reasonable relationship of proportionality between the means employed and the aim sought to be realised (see Tre Traktörer cited above, p. 23, § 59). In determining whether a fair balance exists, the Court recognises that the State enjoys a wide margin of appreciation with regard both to choosing the means of enforcement and to ascertaining whether the consequences of enforcement are justified in the general interest for the purpose of achieving the object of the law in question (see the AGOSI judgment cited above, p. 18, § 52).
In the instant case, the Court notes first of all that the Berlin Administrative Court examined the applicants’ arguments in detail and thoroughly analysed the nature of the acts charged against Mr Honecker and Mr Axen and the provenance of the money in the applicants’ bank accounts, which they had inherited.
In Mr Honecker’s case the Administrative Court set aside a part of the select committee’s decision by allowing the applicant to keep the amounts deriving from her old age pension. It therefore made a careful distinction between the sums that were hers by right and those which had been acquired unlawfully by her husband in the performance of his duties in the GDR for the purposes of section 5(2) of the Convertible Funds Act.
The Administrative Court adopted the same approach with respect to Mr Axen except that in his case it concluded that all of the money in Mrs Axen’s bank account derived from sums acquired unlawfully by her husband in the performance of his duties in the GDR for the purposes of section 5(2) of the Convertible Funds Act.
Having regard to all of the above considerations and in particular to the exceptional circumstances of German reunification, the Court considers that the respondent Government did not overstep the margin of appreciation afforded to them and that, in view of the legitimate aims pursued, they succeeded in achieving a “fair balance” between the applicants’ interests and the general interest of German society. The verification of the provenance of sums of money in GDR marks which were to be converted into DEM was a necessary trade-off for the considerable revaluation that the conversion into DEM entailed.
It follows that this complaint is manifestly ill-founded within the meaning of Article 35 § 3 of the Convention.
2. The applicants further alleged a violation of Article 14 of the Convention, taken together with Article 1 of Protocol No. 1. Article 14 of the Convention provides:
“The enjoyment of the rights and freedoms set forth in [the] Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”
The applicants maintained that the GDR’s Convertible Funds Act was a special law intended to punish high-ranking SED officials through the seizure of their property. The decisions of the GDR Parliament’s select committee and the German courts after reunification had subsequently enabled that discriminatory law to be applied.
In view of its line of reasoning with respect to Article 1 of Protocol No. 1, particularly as regards the general scope of the Convertible Funds Act, the Court considers that no separate issue arises under Article 14 of the Convention.
3. Lastly, the applicants complained that they had had neither a fair trial nor access to an impartial tribunal and that they had not been heard within the reasonable time provided by Article 6 § 1 of the Convention, which reads as follows:
“In the determination of his civil rights and obligations ..., everyone is entitled to a fair ... hearing ... by an independent and impartial tribunal...”
The applicants submitted that the fact that justice had been administered in this case by judges from the FRG alone, the press had published extremely negative articles about them and no appeal lay against the Berlin Administrative Court’s judgment constituted an infringement of their right to an impartial tribunal and a fair trial; they also alleged that the overall length of the proceedings before the German courts had exceeded a reasonable time.
Regarding the first three complaints, the Court observes that the applicants’ allegations are vague and are not based on precise accusations against the judges who dealt with their case.
It follows that these complaints are likewise manifestly ill-founded within the meaning of Article 35 § 3 of the Convention.
As to the last complaint, the Court notes at the outset that it is not required to determine whether the length of the proceedings concerning Mrs Honecker was excessive. It notes that she did not appeal to the Constitutional Court and thus failed to meet the requirement that domestic remedies must be exhausted, as laid down in Article 35 § 1 of the Convention (see, as the most recent authority, Teuschler v. Germany (dec.), no. 47636/99, 4 October 2001).
As regards Mrs Axen, Mrs Teubner and Mrs Jossifov, who raised their complaint about the length of the proceedings in the Federal Constitutional Court, the Court considers that as the case stands at present, it is not in a position to determine the admissibility of this complaint and deems it necessary to give notice of this part of the application to the respondent Government, pursuant to Article 54 § 3 (b) of the Rules of Court.
For these reasons, the Court unanimously
Decides to join the applications;
Adjourns the examination of the complaint by Mrs Axen, Mrs Teubner and Mrs Jossifov under Article 6 § 1 of the Convention as regards the length of the proceedings;
Declares the remainder of the applications inadmissible.
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