AS TO THE ADMISSIBILITY
Application No. 28411/95
by Ianka RIENER
against Bulgaria
The European Commission of Human Rights (First Chamber) sitting
in private on 12 April 1996, the following members being present:
Mr. C.L. ROZAKIS, President
Mrs. J. LIDDY
MM. E. BUSUTTIL
A. WEITZEL
M.P. PELLONPÄÄ
B. MARXER
B. CONFORTI
N. BRATZA
I. BÉKÉS
E. KONSTANTINOV
G. RESS
A. PERENIC
C. BÎRSAN
K. HERNDL
Mrs. M.F. BUQUICCHIO, Secretary to the Chamber
Having regard to Article 25 of the Convention for the Protection
of Human Rights and Fundamental Freedoms;
Having regard to the application introduced on 6 April 1995 by
Ianka RIENER against Bulgaria and registered on 1 September 1995 under
file No. 28411/95;
Having regard to the report provided for in Rule 47 of the Rules
of Procedure of the Commission;
Having deliberated;
Decides as follows:
THE FACTS
The facts of the case as submitted by the applicant may be
summarised as follows.
The applicant, born in 1946 in Bulgaria, has her permanent
address in Vienna. On an unspecified date she obtained Austrian
nationality. The fact whether she remained also a Bulgarian citizen
is disputed (see below III).
Particular circumstances of the case
I.
The applicant is a co-owner and the commercial director of "I.
and G. Riener", a limited liability company registered in Austria ("the
Austrian company"). On 24 January 1991 she also registered under her
own name, with the Bulgarian Chamber of Commerce and Industry (BTPP),
as a foreigner (chuzhdestranno phizichesko litse) conducting economic
activities in Bulgaria.
Since 1990 the applicant, her husband and employees of their
company in Vienna were involved in the execution of sale-purchase
contracts, between the company and Bulgarian companies and merchants,
for the import of coffee. The contracts provided that the seller had
to deliver a certain quantity of coffee at a storage house in Sofia and
that import duties and fees were included in the price. The contracts
did not specify which party was to pay the excise tax.
The applicant submitted customs declarations for each load of
coffee which entered the country. Most of these declarations stated
that the exporter was "firm Riener, Vienna, Austria" and that the
importer was "firm Riener, Sofia, Bulgaria". The declarations were
signed by the applicant and most of them were stamped with the seal of
the Austrian company.
On 1 July 1992 the Slatina district fiscal authority (DS Slatina)
issued Order No. 54, thereby imposing on the applicant, in her capacity
as a foreign physical person conducting business in Bulgaria, the
payment of 26,494,582 leva of unpaid excise tax and 4,104,925 leva of
interest, due for the period of time since the tax had become payable,
under Section 1 of the Law on Interest Due on Taxes, Fees and Other
Similar State Claims (Zakon za lihvite varhu danatsi, taksi i drugi
podobni darzhavni vzemania) (see below Relevant domestic law). The
decision stated inter alia that, since the applicant had failed to
present her accounting books, the assessment was based on an analysis
of her customs declarations.
On 10 July 1992 the applicant appealed against Order No. 54 to
the Director of the Sofia regional fiscal authority (Stolichno danachno
upravlenie) stating that she did not owe taxes. The appeal was
dismissed on 20 August 1992.
On 12 November 1992 the applicant appealed against the
administrative fiscal decisions to the Sofia Regional Court (SGS).
In her submissions she stated inter alia that importers, within the
meaning of the fiscal law, were the Bulgarian companies, the buyers,
whereas she was only the "supplier" of the coffee. Therefore, the
excise tax had to be levied on the buyers. Also, the fiscal
authorities bore the burden of proof in such matters and she was not
obliged to submit her accounting books. Moreover, the applicant never
imported coffee in her personal capacity as a foreigner registered with
the Bulgarian Chamber of Commerce and Industry. All imports were
effected through her company registered in Austria, whose name and
address were inscribed in the sale-purchase contracts and in the
invoices. Therefore, the excise tax was imposed on the wrong person.
On 7 April 1993 the Court dismissed the appeal. The judgment
stated inter alia that the customs declarations signed by the applicant
always contained, in the space provided for the name of the importer,
a reference to the applicant's registration as a foreigner conducting
business in Bulgaria. Thus, the address was always that of the
applicant in Sofia and the statistical company number (EKPOU) was
always that of her registration with the Bulgarian Chamber of Commerce
and Industry. The fact that her name was inscribed in different
manners, in some documents thus resembling the Austrian company's name,
and that the Austrian company's seal had been used in some of the
declarations, could not affect this conclusion. Furthermore, under the
law the excise tax had to be paid by the importer. The importer was
always free to make contractual arrangements to be reimbursed by the
buyers, but this could not affect the existing fiscal obligation.
On 26 April 1993 the applicant submitted to the Supreme Court
(Varhoven sad) a petition for review of the Regional Court's judgment.
She stated inter alia that under contract law goods which are
identified in the sale-purchase contract become the property of the
buyer as from the date of the contract. It followed that, in the
particular situation, only the buyers could be considered importers of
the coffee. Alternatively, the applicant asserted that the importer
was the Austrian company and that she was merely its representative.
On 7 October 1994 the Supreme Court dismissed the petition as the
conclusions of the Regional Court had been correct.
In a dissenting opinion Justice Kostova stated, inter alia, that
the question who had been the importer had to be decided based on an
analysis of the employed commercial scheme.
II.
On 26 February 1991 on an unspecified ground representatives of
the fiscal authorities searched the applicant's office in Sofia and
seised documents and money. In May 1991 criminal proceedings were
instituted against the applicant and against three other merchants on
suspicion of having contravened Sections 250 and 351 of the Penal Code
(Nakazatelen kodeks), which concerned respectively violations of the
currency exchange regime and selling alimentary products in breach of
the sanitary requirements. In August 1991 an investigating judge
conducted a search in the applicant's office and confiscated documents
and money which, according to the applicant, belonged to the Austrian
company. The criminal proceedings were terminated on 14 October 1992
as no criminal acts had been established.
On 22 July 1992 the applicant was informed by the State Savings
Bank (DSK) that the monies in a bank account, which allegedly belonged
to the Austrian company, were attached by order of the fiscal
authorities.
On 26 January 1993 the Sofia fiscal authority sent a letter,
addressed to "Ianka and Gunter Riener" at the applicant's Sofia
address. The letter stated that, based on the relevant legal
provisions, the authority had attached certain monies as a security for
the unpaid excise tax. These were apparently the sums seized during
the searches in the applicant's office in 1991.
On unspecified dates similar attachments were imposed on monies
in other bank accounts, which allegedly belonged to the Austrian
company. The total amount thus attached reached about 80,000 USD.
On unspecified dates the monies attached were seized by the fiscal
authorities.
The applicant and the Austrian company apparently have not
challenged the attachments and the seizures as provided for under the
Law on the Collection of State Claims (Zakon za sabirane na darzhavnite
vzemania) and the Civil Procedure Code (GKP) (see below Relevant
domestic law).
III.
On 4 April 1995 the Bulgarian border control authorities
confiscated the applicant's Austrian passport when she attempted to
leave Bulgaria and to enter Greece. The officers explained orally that
there was a prohibition imposed on her against leaving the country but
did not provide further details. They issued her with a certificate
stating that her Austrian passport was confiscated without any mention
of the grounds therefor.
On 13 April 1995 the applicant sent a telegram to the Directorate
of the Police (DNP) asking for the return of her Austrian passport and
for explanation. On 17 and on 19 April 1995 she repeated her request.
On 20 April 1995 the Directorate of the Police sent a letter to
the applicant stating that it had imposed on her a prohibition against
leaving the country under Section 29(1)(v) of the Law on the Sojourn
of Aliens (Zakon za prebivavane na chuzhdentsite ("the Aliens Law")
(see below Relevant domestic law). This measure had been taken upon
the request of the Sofia fiscal authority and was based on the
applicant's obligation to pay 26,499,582 leva, as confirmed by the
Supreme Court's decision of 7 October 1994.
On 26 April 1995 the applicant sent a letter to the Chief Public
Prosecutor (Glaven prokuror) in which she stated, inter alia:
"Following the steps undertaken by me before the Ministry
of Justice and the Ministry of Foreign Affairs for relinquishing
my Bulgarian citizenship, I was informed, through the Consular
service ... that in the opinion of those two Ministries, I was
still a Bulgarian citizen...
I would ask you to explain why measures under the [Aliens
Law] are imposed on a Bulgarian citizen and whether this is
lawful."
On 19 May 1995 the applicant sent another telegram to the
Directorate of the police requesting information as regards the date,
number and type of the administrative order imposing on her a
prohibition against leaving the country and asking which administrative
organ had issued the order.
On 26 May 1995 the applicant submitted to the Ministry of the
Interior (MVR) an appeal under the Aliens Law against the prohibition
from leaving the country. She stated that the measure was unlawful as
she was a Bulgarian citizen. She enclosed a copy of a letter of
28 April 1995 sent to her by an administrative authority at the
Ministry of the Interior, which allegedly certified that she was a
Bulgarian citizen.
On 22 June 1995 the Ministry of the Interior sent a letter to the
applicant which stated, inter alia:
"You have assumed Austrian citizenship in breach of Section
16 of the Law on Bulgarian Citizenship (Zakon za balgarskoto
grazhdanstvo), without relinquishing Bulgarian citizenship.
Therefore, the imposition of a restriction on leaving the country
under Section 7 (e) of the Law on the Passports for Travelling
Abroad (Zakon za zadgranichnite pasporti) and of a prohibition
against leaving under Section 29(1)(v) of the [Aliens Law] is
legitimate.
The above has been done based on the request of the Sofia
fiscal authority dated 7 March 1995 and based on the judicial
execution order (izpalnitelen list) issued in civil case No.
565/1992.
Under Section 33 of the Law on Administrative Procedure
(ZAP) you can appeal against the order imposing the prohibition
against leaving Bulgaria."
On 28 June 1995 the applicant submitted an appeal to the Sofia
Regional Court. She stated that the confiscation of her Austrian
passport was unlawful as she had not been given a copy of any order
authorising such an act. Furthermore, she has a second, Bulgarian,
nationality and measures under Section 29 of the Aliens Law could not
be applied against her. In any event, the authorities had an adequate
security for the payment of the excise tax as they had attached funds
of the Austrian company worth 80,000 USD (at the pertinent time, about
5,300,000 leva). Insofar as Section 7 (e) of the Law on the Passports
for Travelling Abroad had been invoked, this provision concerned the
possibility to refuse the issuance of, or to confiscate, a Bulgarian
passport, not an Austrian one.
According to the applicant, this appeal has not been examined by
the Court.
Relevant domestic law
1. The Law on Interest Due on Taxes, Fees and Other Similar State
Claims provides, insofar as relevant:
"Taxes, fees ... and other similar state claims, which have not been paid on time, which have not been withheld, or which have been withheld but have not been transferred on time, shall be collected with a daily interest rate of 1/360 of the basic interest rate, as in force at the relevant time, plus 0.05%." 2. The Law on the Collections of State Claims, as in force at the time of the events at issue, provided for attachments, public sales and seizures of the debtor's property as means for collection of a debt. There is no possibility for transformation of a debt into a prison term or other penalty. Sections 27 and 28 provided that the imposed measures were subject to appeal to the courts. In this respect the Civil Procedure Code applied. 3. Section 35(1) of the Bulgarian Constitution provides as follows. "Everyone shall have the right to choose freely his place of residence, the right to freedom of movement within the territory of the country and the right to leave the country. [These] right[s] may be subject to restrictions provided for only by act of Parliament, in the interest of national security, for the protection of public health and the rights and freedoms of others." 4. The Law on the Sojourn of Aliens ("the Aliens Law"), insofar as relevant, provides as follows: Section 3 "An alien, within the meaning of this Law, shall be every person who is not a Bulgarian citizen, but is a citizen of another country or has no citizenship." Section 29 "(1) An alien shall not be allowed to leave the country whenever it has been established that: ... (v) he owes the State the payment of a fine or another pecuniary obligation; (2) The alien may be authorised by the competent state organ to leave the country if there are guarantees that he will fulfil his obligations under subpara ... (v) or if he has deposited a security ..." 5. The Law on Bulgarian Citizenship provides in its Section 16 that a Bulgarian citizen can assume another citizenship only after having relinquished Bulgarian nationality. However, this Law does not provide for an automatic loss of Bulgarian citizenship, as it requires, in its Section 27, a formal decision in every case. 6. The Law on the Passports for Travelling Abroad provides that a Bulgarian citizen may be refused the issuance of a Bulgarian passport, or his Bulgarian passport may be confiscated, inter alia, if he or she has "significant pecuniary obligations to the State". 7. Sections 33 and 34 of the Law on Administrative Procedure provide that all administrative acts, except those specifically excluded by Section 34 and by other acts of Parliament, can be appealed against before the courts. COMPLAINTS 1. The applicant complains under Article 6 paras. 1 and 3 of the Convention that the tax proceedings were unfair, that her defence rights were breached and that the judges were partial and did not decide within a reasonable time. 2. The applicant complains under Article 1 of Protocol No. 1 to the Convention that the authorities imposed on her arbitrarily the payment of taxes which she did not owe as she had always acted only as a representative of the Austrian company, not in her personal capacity. Furthermore, the attachments and the seizures imposed on bank accounts and other property of the Austrian company were arbitrary because, according to the court decisions, the obligation to pay was hers and not of the Austrian company. Moreover, the actions of the authorities as a whole ruined her and the Austrian company's business and, contrary to Article 14 of the Convention, there has been discrimination on the grounds of her Austrian nationality. The events in 1991, when the authorities seised some documents and money from the applicant's office, were also in breach of Article 1 of Protocol no. 1 and Article 8 of the Convention. 3. The applicant also complains under Article 8 of the Convention of the confiscation of her Austrian passport and of the prohibition imposed on her from leaving Bulgaria. This was an interference with her private life and also with her family life, as she could not join her husband in Austria. This interference was unlawful because she was never served with an official order and because the authorities acted in complete disregard of any legal procedure. The prohibition against leaving the country even amounted to a house arrest and was contrary to Article 5 of the Convention. 4. The applicant alleges a breach of Articles 6 and 13 in that most of her telegrams and petitions to various institutions concerning the confiscation of her Austrian passport remained unanswered and that her appeal to the Sofia Regional Court has not been examined yet. THE LAW 1. The applicant complains of the actions of the fiscal authorities, of the unfairness of the tax proceedings in her case and of the confiscation of her Austrian passport. The Commission has first examined its competence ratione temporis in the present case. The Commission recalls that the Convention entered into force in respect of Bulgaria on 7 September 1992, and that in accordance with the generally recognised principles of international law, the Commission is not competent to examine complaints against violations of the Convention which have occurred by virtue of acts, facts or decisions prior to that date. Therefore, the Commission finds that the applicant's complaints about the searches and seizures in her office in 1991 and about all other events which have occurred prior to 7 September 1992 fall outside its competence ratione temporis and have to be rejected under Article 27 para. 2 (Art. 27-2) of the Convention. 2. The applicant complains under Article 6 paras. 1 and 3 (Art. 6-1, 6-3) of the Convention of the alleged unfairness of the tax proceedings. The Commission recalls its long-established case-law to the effect that civil rights and obligations are not determined by assessments to tax (see, for example, No. 13013/87, Dec. 14.12.88, D.R. 58, pp. 163, 189, and No. 11189/84, Dec. 11.12.86, D.R. 50, pp. 121, 140, and the further cases referred to there). Also, in connection with the applicability of Article 6 (Art. 6) in the field of taxation in the present case, the Commission recalls that the criteria in ascertaining whether a "criminal charge" is at stake include the nature of the matter in domestic law, the nature of the "offence", and the severity of the "penalty" (see Appl. No. 19380/92, Benham v. the United Kingdom, Comm. Report 29.11.94, with reference to, inter alia, Eur. Court H.R., Bendenoun judgment of 24 February 1994, Series A no. 284, pp. 19, 20, paras. 45 - 47). The Commission has considered that tax sanctions of 30% and 50% of the amount due - imposed by the French revenue under Article 1729 of the Tax Code for the tax offence ("infraction fiscale") of displaying bad faith - were penalties the imposition of which attracted the guarantees of Article 6 (Art. 6) of the Convention (cf. also Appl. No. 18656/91, Dec. 1.12.92, unpublished). However, a 10% surcharge imposed automatically, in addition to costs, because the liability to tax has not been met when it was due, did not amount to a criminal charge as it was not imposed for anything which is assimilable to the concept of "wilful refusal or culpable neglect" or to the concept of "displaying bad faith". Another criterion was that neither the liability to the charge nor the surcharge could be converted into a term of imprisonment (Appl. No. 25373/94, Dec. 29.11.95, unpublished). In the present case the Commission notes that the proceedings before the fiscal authorities and before the courts concerned the determination of the applicant's obligation to pay excise tax. They did not, therefore, concern the determination of the applicant's civil obligations within the meaning of Article 6 (Art. 6) of the Convention. It is true that the applicant was ordered to pay also interest on the principal amount due. However, this was an interest payable on a per day basis for the period of time since the applicant had become liable to pay excise tax and consisting of the basic interest rate in the country increased by a surcharge of only 0.05%. Moreover, the interest accrued automatically, on all late payments due to the State, and regardless of the reasons for the failure to pay on time. It was not a fine under domestic law and its payment was enforceable only through attachments, public sales and seizures of the debtor's property. Therefore, the proceedings at issue did not concern the determination of a criminal charge within the meaning of Article 6 (Art. 6) of the Convention. It follows that the proceedings at issue did not fall within the scope of Article 6 (Art. 6) of the Convention and that, therefore, this part of the application has to be rejected as being incompatible ratione materiae with the provisions of the Convention within the meaning of Article 27 para. 2 (Art. 27-2). 3. The applicant complains under Article 1 of Protocol No. 1 (P1-1) taken alone and in conjunction with Article 14 (P1-1+14) that the authorities imposed on her arbitrarily the payment of taxes, that property of the Austrian company was seized, and that the actions of the authorities as a whole ruined her and the Austrian company's business. Article 1 of Protocol No. 1 (P1-1) to the Convention, insofar as relevant, 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 ... secure the payment of taxes ..." The Commission recalls the Convention organs' case-law according to which taxation is an interference with the right guaranteed by Article 1 of Protocol No. 1 (P1-1), but that this interference is in principle justified according to the second paragraph of that Article (P1-2). An interference is justified if it is lawful and if it has achieved a "fair balance" between the demands of the community's general interests and the requirements of the protection of the individual's fundamental rights (Appl. No. 10653/83, Dec. 6.5.85, D.R. 42, p. 224; Appl. No. 11089/84, Dec. 11.11.86, D.R. 49, p. 181; Eur. Court H.R., Hentrich judgment of 22 September 1994, Series A no. 296-A, p. 19, paras. 40 -42; Air Canada judgment of 5 May 1995, Series A no. 316, para. 36). The Commission notes that, by decisions of the fiscal authorities and of the courts, the applicant was held responsible for the payment of excise tax. The decisions were based on the relevant provisions of the Bulgarian substantive and procedural tax law. Furthermore, the Commission notes that, contrary to the applicant's contention that they were arbitrary and therefore unlawful, the decisions contained analysis of the relevant issues and evidence and addressed the applicant's arguments. Therefore, the Commission finds that the decisions for the payment of excise tax in the applicant's case constituted an interference with her rights under Article 1 of Protocol No. 1 (P1-1) to the Convention which was justified under the second paragraph of this provision. Insofar as the applicant invokes Article 14 (Art. 14) of the Convention, the Commission does not find any indication that the payment of excise tax was imposed on the applicant because she was an Austrian national. Finally, the Commission finds that, insofar as the applicant may be understood as complaining on behalf of the Austrian company that its assets were seised by the authorities, and assuming that the applicant can be considered as its representative before the Commission, the Austrian company has not exhausted the domestic remedies available to it under Bulgarian law as it has not instituted any proceedings against the attachments and the seizures of its property. It follows that this part of the application is manifestly ill- founded and has to be rejected under Article 27 para. 2 (Art. 27-2) of the Convention. 4. The applicant complains under Articles 5 and 8 (Art. 5, 8) of the Convention of the confiscation of her Austrian passport and of the prohibition against leaving Bulgaria. Insofar as the applicant invokes Article 5 (Art. 5) of the Convention, the Commission recalls that this provision concerns deprivation of liberty and is not applicable in the present case (cf. Appl. No. 8988/80, Dec. 10.3.81, D.R. 24, pp. 198, 201). The Commission has, therefore, examined the applicant's complaint of the confiscation of her passport and of the prohibition against leaving Bulgaria under Article 8 (Art. 8) of the Convention. The Commission considers that it cannot, on the basis of the file, determine the admissibility of the above complaint and that it is therefore necessary, in accordance with Rule 48 para. 2 (b) of the Rules of Procedure, to give notice of these complaints to the respondent Government. 5. The applicant complains that the authorities did not deal properly with her complaints against the confiscation of her passport and against the prohibition against leaving Bulgaria and that her appeal before the Sofia Regional Court has not been examined. She invokes Articles 6 and 13 (Art. 6, 13) of the Convention. The Commission considers that it cannot, on the basis of the file, determine the admissibility of the above complaint and that it is therefore necessary, in accordance with Rule 48 para. 2 (b) of the Rules of Procedure, to give notice of these complaints to the respondent Government. For these reasons, the Commission, unanimously, DECIDES TO ADJOURN the examination of the applicant's complaints of the confiscation of her passport, of the prohibition against leaving Bulgaria and of the alleged lack of an effective remedy in this respect; DECLARES THE REMAINDER OF THE APPLICATION INADMISSIBLE. Secretary to the First Chamber President of the First Chamber (M.F. BUQUICCHIO) (C.L. ROZAKIS)
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