SULJAGIC v. BOSNIA AND HERZEGOVINA

FOURTH SECTION

FINAL DECISION

AS TO THE ADMISSIBILITY OF

Application no. 27912/02
by Mustafa SULJAGIĆ
against Bosnia and Herzegovina

The European Court of Human Rights (Fourth Section), sitting on 20 June 2006 as a Chamber composed of:

SirNicolas Bratza, President,
MrJ. Casadevall,
MrG. Bonello,
MrK. Traja,
MrS. Pavlovschi,
MrL. Garlicki,
MsL. Mijović,

and Mr T.L. Early, Section Registrar,

Having regard to the above application lodged on 2 July 2002,

Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,

Having deliberated, decides as follows:

THE FACTS

The applicant, Mr Mustafa Suljagić, is a citizen of Bosnia and Herzegovina who was born in 1935 and lives in Bosnia and Herzegovina. He is represented before the Court by Mr E. Suljagić, a lawyer practising in Srebrenik. The respondent Government are represented by Ms Z. Ibrahimović, Agent, and by Ms M. Mijić, Deputy Agent.

A. The circumstances of the case

The facts of the case, as submitted by the parties, may be summarised as follows.

Prior to the dissolution of the former Socialist Federal Republic of Yugoslavia (“the SFRY”) the applicant deposited foreign currency in his six bank accounts at the then Privredna banka Sarajevo – Osnovna banka Tuzla. In Bosnia and Herzegovina, as well as in other successor States of the former SFRY, such savings are commonly referred to as “old” foreign-currency savings (for the relevant background information see Jeličić v. Bosnia and Herzegovina (dec.), no. 41183/02, ECHR 2005-...).

The applicant attempted to withdraw his funds on several occasions to no avail.

On 10 April 1998 the applicant complained to the Constitutional Court of Bosnia and Herzegovina (“the Constitutional Court”) which was set up by the Constitution of Bosnia and Herzegovina (Annex 4 to the 1995 General Framework Agreement for Peace).

On 16 April 1998 the Constitutional Court informed the applicant, in a letter, that it could only examine appeals against court judgments.

On 15 July 1999 the Tuzlanska banka (the legal successor of the Privredna banka Sarajevo – Osnovna banka Tuzla mentioned above) informed the applicant that his “old” foreign-currency savings had been registered at a special account pursuant to the Settlement of Claims Against the Federation of Bosnia and Herzegovina Act 1997. The applicant was also informed that, pursuant to the same legislation, that bank was no longer liable for the savings. On 28 July 1999 the applicant objected but it would appear that he did not receive any response.

On 22 September 1999 the applicant complained to the Human Rights Chamber which was set up by the Agreement on Human Rights (Annex 6 to the 1995 General Framework Agreement for Peace).

On 6 April 2005 the Human Rights Commission within the Constitutional Court (the legal successor of the Human Rights Chamber) issued the Besarović and 310 Others decision (described in detail in “Relevant law and practice” below) which included the applicant in the present case. Violations of Article 6 of the European Convention on Human Rights and Article 1 of Protocol No. 1 to that Convention were found. Bosnia and Herzegovina was obliged to pass framework legislation on the matter of “old” foreign-currency savings by 17 April 2006. The applicant was awarded 500 Bosnian markas[1] for non-pecuniary damage and legal costs.

It would appear that the balance in the applicant’s accounts is approximately 131,000 euros. However, this amount must be verified in accordance with the Old Foreign-Currency Savings Act 2006.

B. Relevant law and practice

1. Legislation of the former Socialist Federal Republic of Yugoslavia and of the former Republic of Bosnia and Herzegovina

Foreign-currency accounts were a guarantee of the former Socialist Federal Republic of Yugoslavia (“the SFRY”). The former Republic of Bosnia and Herzegovina (the legal predecessor of present-day Bosnia and Herzegovina) took over that guaranty. For the relevant provisions see the Jeličić decision cited above.

2. The 1995 General Framework Agreement for Peace (“the Dayton Agreement”)

Three principal parties to the 1992-95 war in Bosnia and Herzegovina (the then Republic of Bosnia and Herzegovina, the Republic of Croatia and the then Federal Republic of Yugoslavia) signed the Dayton Agreement on 14 December 1995. It entered into force on the same day. There are twelve Annexes to the Agreement, including the Constitution of Bosnia and Herzegovina (Annex 4) and the Agreement on Human Rights (Annex 6).

(a) Constitution of Bosnia and Herzegovina

The Constitution entered into force on 14 December 1995. Declarations on behalf of Bosnia and Herzegovina and its constituent Entities (namely, the Federation of Bosnia and Herzegovina and the Republika Srpska) approving the Constitution were attached to it. For its relevant provisions see the Jeličić decision cited above.

The Constitutional Court of Bosnia and Herzegovina (“the Constitutional Court”) was set up pursuant to the Constitution.

Following an application for an abstract constitutionality review lodged by the then Speaker of the House of Representatives of the Parliament of Bosnia and Herzegovina, on 2 December 2005 the Constitutional Court decided that the constituent units of Bosnia and Herzegovina lacked jurisdiction to enact laws concerning “old” foreign-currency savings. Their legislation was therefore annulled. The Constitutional Court ordered that the matter be legislated on at the State-level by 17 April 2006 (see the Constitutional Court’s decision no. U 14/05 of 2 December 2005; published in the Official Gazette of Bosnia and Herzegovina – “OG BH” – no. 2/06 of 16 January 2006).

A number of individuals have complained to the Constitutional Court about their inability to withdraw their “old” foreign-currency savings. In the Constitutional Court’s decision no. AP 130/04 of 2 December 2005 the situation of 19 applicants with “old” foreign-currency savings in banks located in the Federation of Bosnia and Herzegovina was examined.

The following is the relevant part of this decision:

“...

54. In this respect, the Constitutional Court recalls that according to the established practice in Bosnia and Herzegovina, the appellants may directly address the Constitutional Court in case [where] there are no other effective legal remedies with regard to a constitutional right or the rights provided for by the European Convention...

55. The Constitutional Court states that the first indication of an ineffective legal system with regard to the payment of old foreign currency savings is the fact that Bosnia and Herzegovina has not started to pay old foreign currency savings to date. Moreover, the Constitutional Court notes that some of the appellants have initiated domestic court proceedings in attempts to have cash disbursed from their savings accounts. None of them has so far been successful. Finally, the legal solutions do not foresee enforcement of the final court decisions relating to this matter, since other modalities for the payment of old foreign currency savings are anticipated.

56. Having regard to the above, the Constitutional Court considers that there are no effective remedies available to the appellants that they should be required to exhaust. In these circumstances, the Constitutional Court is not precluded from considering the applications...

...

77. ... [T]he Constitutional Court finds that the State has to regulate in a certain manner this issue...

78. Since the State of Bosnia and Herzegovina has not enacted framework [legislation] to principally regulate these issues, the Constitutional Court finds that Bosnia and Herzegovina failed to efficiently protect the appellants’ right to possession, thereby being in breach of its positive obligations arising from Article 1 of Protocol No.1 to the European Convention.

...

92. In the part relating to the admissibility of appeals [above], the Constitutional Court concluded that [most of] the appellants have not exhausted remedies, which has not been necessary because the Entity, as the competent one in that sense, has not provided for the efficient legal system. For that reason, the Constitutional Court considers that the appellants, regardless of the fact that their old foreign currency savings have not been reimbursed ..., had no institutional protection or possibility to address any court or other organ...

93. For all [the reasons] stated above, the Constitutional Court concludes that there has been a violation of the appellants’ rights under Article 6 § 1 of the European Convention, the Federation of Bosnia and Herzegovina being responsible for it.

...”

On 9 February 2006 the Constitutional Court pronounced decision no. AP 494/05 which dealt with 50 applicants with savings in banks located in both Entities of Bosnia and Herzegovina. The same conclusions were reached as in the decision no. AP 130/04 cited above. Two appellants claimed compensation for non-pecuniary damage. The Constitutional Court rejected their claims on the ground that an award of damages would have further complicated the already burdensome matter of the “old” foreign-currency savings.

(b) Agreement on Human Rights

The Agreement on Human Rights was signed by Bosnia and Herzegovina and its constituent Entities on 14 December 1995, when it entered into force. For its relevant provisions, see the Jeličić decision cited above.

The former Human Rights Chamber was set up pursuant to this Agreement. On 31 December 2003 it was replaced by the Human Rights Commission within the Constitutional Court (“the Commission”) with a mandate to decide on cases received by the Human Rights Chamber up to that moment.

(i) Poropat and 3 Others, decision nos. CH/97/48 et al. of 9 June 2000

The Human Rights Chamber delivered its first decision in connection with “old” foreign-currency savings on 9 June 2000. It concerned “old” foreign-currency savings in banks located in the Federation of Bosnia and Herzegovina. The matter at issue at that stage was regulated by the Entities’ privatisation legislation in accordance with which “old” foreign-currency savers could use their savings within a limited period of time for the purchase of State-owned apartments in which they lived and/or for the purchase of State-owned companies. It was also possible to sell “old” foreign-currency savings on the secondary market for a fraction of their nominal value. The Human Rights Chamber examined the relevant legislation of the Federation of Bosnia and Herzegovina and found that it placed an excessive burden on the applicants in violation of Article 1 of Protocol No. 1 to the European Convention on Human Rights (“the Convention”). The Federation of Bosnia and Herzegovina was thus ordered to amend its privatisation programme so as to achieve a fair balance between the general interest and the protection of the applicants’ property rights. The Human Rights Chamber further found that Bosnia and Herzegovina had failed to take adequate action at the State level to secure to the applicants as “old” foreign-currency savers their property rights, having thereby failed to fulfil its positive obligation under Article 1 of Protocol No. 1 to the Convention. The applicants were awarded legal costs. Their claims for compensation for the entire amount of their “old” foreign-currency savings were rejected. The Human Rights Chamber explained that its findings of violations under Article 1 of Protocol No. 1 to the Convention were not directly based on the applicants’ inability to withdraw money from their savings accounts but concerned the failure of Bosnia and Herzegovina to take adequate action in regard to the savings and the failure of the Federation of Bosnia and Herzegovina to strike a fair balance between the relevant interests as described above.

(ii) Todorović and 6 Others, decision nos. CH/97/104 et al. of 11 October 2002

On 11 October 2002 the Human Rights Chamber delivered another decision in connection with the same matter: “old” foreign-currency savings in banks located in the Federation of Bosnia and Herzegovina. While recognising the efforts of the Federation of Bosnia and Herzegovina to implement the Poropat and 3 Others decision through amendments to the privatisation legislation, the Human Rights Chamber concluded that there was still an excessive burden on the applicants in violation of Article 1 of Protocol No. 1 to the Convention. The Federation of Bosnia and Herzegovina was obliged once more to regulate the matter at issue in a manner compatible with the Convention. In so far as Bosnia and Herzegovina is concerned, the Human Rights Chamber came to the same conclusion as in the Poropat and 3 Others decision.

It was noted that no court proceedings initiated in order to obtain disbursement of “old” foreign-currency savings had been successful. The decision continued, in the relevant part, as follows:

“106. ... In most cases, the actions have languished in the courts for periods of years with no movement whatsoever. In the only case where an applicant has received a decision on the merits, his favourable court judgment was subsequently deemed unenforceable.”

The Human Rights Chamber concluded that it was not precluded from examining the cases in which the applicants failed to pursue any court proceedings. It also found a de facto denial of access to court in violation of Article 6 of the Convention in respect of those applicants.

The applicants were awarded legal costs.

(iii) Decision on further remedies of 4 July 2003 in the above-mentioned Poropat and 3 Others and Todorović and 6 Others

The Human Rights Chamber found that the human-rights violations continued and ordered the Federation of Bosnia and Herzegovina and Bosnia and Herzegovina to pay each of the applicants 2,000 Bosnian markas (approximately 1,000 euros) or the full balance of his or her “old” foreign-currency savings, whichever was less, the costs to be borne equally between the respondent Parties. The Human Rights Chamber considered that the amounts of those payments should be deducted from any future recovery of “old” foreign-currency savings.

(iv) Kugić and 3 Others, decision nos. CH/98/420 et al. of 10 October 2003

On 10 October 2003 the Human Rights Chamber delivered its first decision in connection with “old” foreign-currency savings in banks located in the Republika Srpska. The situation in that Entity in the relevant period was summarised as follows:

“158. In the privatisation process, citizens’ old foreign currency savings claims are recorded on a Unique Citizen’s Account and can be transferred to: (1) certificates valid for partial payment for apartments for which an occupancy right exists; or (2) coupons valid for purchases in the privatisation of state-owned enterprises or business premises. Participation is purely voluntary. Old foreign currency savings holders might choose to partly or fully convert their savings to take advantage of these privatisation opportunities or to sell their coupons in the secondary market. Alternatively, they have the option of holding them in their current form in hopes of future realisation of cash payment.

159. The Chamber notes several positive aspects of the Republika Srpska privatisation process as it relates to old foreign currency savers. First, the program is voluntary and therefore offers savers a choice in the manner of dealing with their accounts. Second, there appears to be little risk related to the two-year expiration period for coupons. As Ms. Milašinović of the Republika Srpska’s Directorate for Privatisation explained, investors in the privatisation process typically execute a purchase contract before going through with the actual conversion of savings into coupons, thus minimising the risk that coupons will expire. Finally, savers may also choose to convert their savings to sell privatisation coupons on the secondary market, which, considering the overall economic situation in Bosnia and Herzegovina, offers a reasonable rate of return. While the Republika Srpska Directorate for Privatisation does not get involved in sales of privatisation coupons on the secondary market, such sales are clearly not illegal and are conducted openly in the Republika Srpska. As Professor Stojanov, [Office of the High Representative], and Ms. Milašinović have stated, the current value of privatisation coupons on the secondary market is approximately 40 to 60 percent of their nominal value, a figure consistent with the applicants’ experience. Professor Stojanov opined, however, that this rate is likely to drop. Nonetheless, he noted that the Republika Srpska’s privatisation process has been structured such that massive devaluation of privatisation coupons has not yet occurred, and he stated that the secondary market may provide the best option for some citizens to obtain some level of return on their old foreign currency savings.

160. At the same time, the Chamber notes that certain categories of old foreign currency savers might find it difficult to participate in the privatisation process. Persons with small levels of savings might not have sufficient assets to invest on their own, particularly as the process moves forward towards privatisation of larger businesses. Although Ms. Milašinović stated that persons can contract to participate jointly, the process appears to be more accessible to those with larger savings. Further, old foreign currency savings holders who lack sufficient funds to satisfy the cash deposit requirement (ranging between three and ten percent of the total purchase price) may find themselves excluded de facto from the privatisation process. Both the President and Legal Representative of the Association of the Citizens of the Republika Srpska with Old Foreign Currency Savings Accounts stated that this was a serious hindrance to their members’ participation in the process. Further, the privatisation of state-owned apartments is only open to those holding an occupancy right over such an apartment, a requirement that will exclude many savers from that option. Finally, Articles 19 and 20 of the Law on Privatisation of State Capital in Enterprises exclude persons who are not citizens of the Republika Srpska from participating in the privatisation process. The Republika Srpska’s Directorate for Privatisation was unable to state how many persons are affected by this, but it appears that such persons are fully excluded. Although the Republika Srpska contends that they may participate in the privatisation of state-owned apartments, this conclusion is not supported by the statutory language; and, in any case, non-citizens as a group are less likely to hold an occupancy right over an apartment in the Republika Srpska, as Entity citizenship is linked to the place of residence.”

In respect of the applicants who were citizens of the Republika Srpska, the Human Rights Chamber concluded that, given the prevailing economic situation in Bosnia and Herzegovina, a fair balance had been struck between the general interests and the applicants’ individual rights.

In respect of the applicant who was not a citizen of the Republika Srpska, the Human Rights Chamber found a violation of Article 1 of Protocol No. 1 to the Convention, taken alone and in connection with Article 14 of the Convention, by the Republika Srpska. In addition, a violation of Article 1 of Protocol No. 1 to the Convention by Bosnia and Herzegovina, in respect of the same applicant, was found for the reasons adopted in the above-mentioned Poropat and 3 Others decision (failure to take adequate action at the State level to secure to the applicant as an “old” foreign-currency saver his property rights). The Republika Srpska was ordered to ensure that the applicant, as a non-citizen, enjoyed the same rights and options as the other applicants, who were citizens of the Republika Srpska, with regard to his “old” foreign-currency savings.

(v) Đurković and 36 Others, decision nos. CH/98/377 et al. of 7 November 2003

On 7 November 2003 the Human Rights Chamber delivered another decision in connection with “old” foreign-currency savings in banks located in the Federation of Bosnia and Herzegovina. It concluded that the violation of Article 1 of Protocol No. 1 to the Convention continued and made the same orders as in the above-mentioned decision on further remedies of 4 July 2003 in Poropat and 3 Others and Todorović and 6 Others. It was considered unnecessary to examine the applications also under Article 6 of the Convention.

(vi) Besarović and 310 Others, decision nos. CH/98/375 et al. of 6 April 2005

On different dates in 2004 the constituent units of Bosnia and Herzegovina introduced new legislation on “old” foreign-currency savings. While the new legislation did not abolish the possibility of using such savings in the privatisation process in accordance with the previously adopted legislation, those who did not wish to use so their “old” foreign-currency savings were now entitled to receive a part of their savings in cash and the remaining part in State bonds.

The compliance with the Convention of the new legislation of the Federation of Bosnia and Herzegovina was examined in the Besarović and 310 Others decision of 6 April 2005. The Commission, which meanwhile inherited the cases of the former Human Rights Chamber, analysed the provisions defining the verification process (that is, the process in which the exact amount of one’s “old” foreign-currency savings was to be determined). It decided that adequate procedural guarantees were lacking as, inter alia, there was no right to appeal to a “tribunal” which would satisfy the requirements of Article 6 of the Convention. As to the envisaged repayment of “old” foreign-currency savings in cash and in State bonds, the Commission considered this approach to be, in principle, justified given the prevailing economic situation. It was explained that the question of “old” foreign-currency savings needed to be assessed in the light of numerous other financial obligations of Bosnia and Herzegovina. The Commission continued:

“...1240. The Commission notes that the damage suffered by holders of “old” foreign-currency savings is not the only one. Since the beginning of the 1990s, many suffered a loss ... The State is charged not only with repairing a damage and redressing a wrong, but also with developing a prosperous society. In other words, in special circumstances, the State must reconcile the past and the future within the limits of the possible ...”

At the same time, the Commission found it unsatisfactory that it was left to the executive to determine definitively when the State bonds would become due and whether they would earn interest. In the light of the above, the Commission established a violation of Article 1 of Protocol No. 1 to the Convention by the Federation of Bosnia and Herzegovina.

It was further found that Bosnia and Herzegovina continued to violate Article 1 of Protocol No. 1 to the Convention due to its continuous failure to regulate the matter of “old” foreign-currency savings (as in the above-mentioned Poropat and 3 Others decision).

Lastly, the Commission established that the applicants did not have at their disposal any effective domestic remedies for the alleged breach and that the Federation of Bosnia and Herzegovina thereby violated Article 6 of the Convention (failure to secure effective access to court).

Pursuant to this decision (as amended on 8 February 2006 in order to harmonise it with the Constitutional Court’s decision no. U 14/05 of 2 December 2005 indicated above), Bosnia and Herzegovina was obliged to pass framework legislation on the matter of “old” foreign-currency savings by 17 April 2006. Each applicant was awarded 500 Bosnian markas (approximately 250 euros) for non-pecuniary damage and legal costs.

(vii) Halilović and 95 Others, decision nos. CH/98/366 et al. of 12 May 2005

This decision dismissed as not imputable to the respondent Parties (that is, incompatible ratione personae) complaints directed against Bosnia and Herzegovina and the Federation of Bosnia and Herzegovina concerning “old” foreign-currency savings in local branches of the Ljubljanska banka and Invest banka (prior to the dissolution of the former SFRY, those banks had their respective seats in Ljubljana and Belgrade). As to complaints concerning “old” foreign-currency savings in local banks, the Commission adopted the same conclusions as in the Besarović and 310 Others decision.

Following the Besarović and 310 Others and Halilović and 95 Others decisions, the Commission has issued at least 15 similar decisions (concerning, in total, more than 800 “old” foreign-currency savers).

(c) Overlapping of the jurisdiction of the Constitutional Court and that of the former Human Rights Chamber or the Human Rights Commission within the Constitutional Court

In accordance with the long-standing jurisprudence (see, for example, the Constitutional Court’s decision no. U 7/98 of 26 February 1999 and the Human Rights Chamber’s decision no. CH/00/4441 of 6 June 2000), it is not possible, either simultaneously or consecutively, to pursue a case both before the Constitutional Court and the Human Rights Chamber (or its successor). It would appear from that jurisprudence that the rule applies solely to situations when there is an overlapping of jurisdictions between the bodies at issue.

If, however, the Constitutional Court declines jurisdiction, the former Human Rights Chamber (and its successor) may deal with the case.

3. Legislation of Bosnia and Herzegovina

Bosnia and Herzegovina is the legal successor of the former Republic of Bosnia and Herzegovina (in accordance with Article 1 of the Constitution of Bosnia and Herzegovina). Therefore, the guarantee for “old” foreign-currency accounts, which the Republic of Bosnia and Herzegovina had previously taken over from the SFRY, shifted to Bosnia and Herzegovina. In that capacity, Bosnia and Herzegovina concluded the 2001 Agreement on Succession Issues with four other successor States to the SFRY which, inter alia, dealt with the issue of “old” foreign-currency savings (for the relevant provisions see the Jeličić decision cited above).

On 4 August 1998 Bosnia and Herzegovina authorised its constituent Entities (namely, the Federation of Bosnia and Herzegovina and the Republika Srpska) to privatise State-owned banks in their respective territories and to dispose of the proceeds so acquired (sections 2 and 4 of the Privatisation of Companies and Banks Framework Act 1998; Okvirni zakon o privatizaciji preduzeća i banaka u Bosni i Hercegovini; published in OG BH nos. 14/98 of 27 July 1998 and 12/99 of 2 August 1999; amendments published in OG BH nos. 14/00 of 22 May 2000 and 16/02 of 11 July 2002). Furthermore, the liability for claims against State-owned banks, including those arising from “old” foreign-currency accounts, was transferred to the privatising Entity (section 4). Since the Entities were not provided with any guidelines as to how to regulate the matter of “old” foreign-currency savings, they adopted, to some extent, different arrangements. The Brčko District of Bosnia and Herzegovina (established on 8 March 2000 as a unit of local self-government existing under the sovereignty of Bosnia and Herzegovina) also had its own arrangements.

Following the above-mentioned decisions of the former Human Rights Chamber, the Commission and the Constitutional Court, Bosnia and Herzegovina passed the Old Foreign-Currency Savings Act 2006 (Zakon o izmirenju obaveza po osnovu stare devizne štednje; published in OG BH no. 28/06 of 14 April 2006). This Act has been in force since 15 April 2006. The following are its relevant provisions:

Section 1

“1. This Act defines the procedure, manner and deadlines for fulfilment of the obligations of Bosnia and Herzegovina arising from old foreign-currency savings deposited in local banks in the territory of Bosnia and Herzegovina.

2. While Bosnia and Herzegovina shall be responsible for fulfilment of obligations arising from old foreign-currency savings, the Federation of Bosnia and Herzegovina, the Republika Srpska and the Brčko District of Bosnia and Herzegovina shall provide the means.

...

4. In accordance with the 2001 Agreement on Succession Issues, successor States to the former Socialist Federal Republic of Yugoslavia shall be liable for foreign-currency accounts opened at banks which had their seat in their respective territories. Bosnia and Herzegovina shall provide assistance, within the scope of its international activities, to the holders of such foreign-currency accounts ...

5. Bosnia and Herzegovina shall fulfil its obligations defined in paragraphs 1 and 2 above following a verification process.

Section 2

1. Under this Act, old foreign-currency savings are foreign-currency savings in banks located in the territory of Bosnia and Herzegovina as at 31 December 1991, including interest earned until that date, less any payment after that date and any funds transferred to special privatisation accounts.

2. Old foreign-currency savings defined in paragraph 1 above shall not include foreign-currency savings in branch offices located in the territory of Bosnia and Herzegovina of the Ljubljanska banka, Invest banka or other foreign banks.

Section 3(1)

According to preliminary data ... old foreign-currency savings amount to 1,979,000,000 Bosnian markas[2]. The amount shall be determined in the verification process.

Section 4

Any interest accrued after 1 January 1992 but not paid shall be cancelled. Interest for the period between 1 January 1992 and the entry into force of this Act shall be calculated afresh at an annual rate of 0.5%.

Section 5

Fulfilment of obligations arising from old foreign-currency savings, if not verified in accordance with this Act, can be requested only in court proceedings.

Section 6

...

2. Following the verification process, each claimant shall be provided with a certificate which identifies him or her and the amount of his or her old foreign-currency savings.

3. The certificate referred to in paragraph 2 above ... shall include, inter alia, the following:

...

c. a statement that the claimant will renounce any legal action following a cash payment;

...

Section 15

...

5. Following the verification process, a written decision shall be given to each claimant.

6. It shall be permitted to appeal against a [first instance] decision to the [competent second instance body]. It shall be permitted to pursue an administrative dispute before the competent court against a [second instance] decision.

7. The legislation concerning administrative procedure of the Entities and District shall apply to the verification process.

Section 17(1)

An application for verification can be submitted by [16 October 2006] and the verification process shall be completed by [15 January 2007].

Section 18

...

2. In case of agreement with the amount determined in the verification process, the claimant shall sign a verification certificate. Following the claimant’s waiver of the right to appeal, a maximum of 100 Bosnian markas[3], or the total amount of savings lower than 100 Bosnian markas, shall be paid ...

3. Furthermore, by the end of 2007 a maximum of 1,000 Bosnian markas[4], or the total amount of savings lower than 1,000 Bosnian markas, shall be paid. The remaining amount shall be reimbursed in State bonds in accordance with this Act ...

...

Section 21(1)

... All State bonds shall be issued at the same time ... at the latest by 31 March 2008 on the following conditions:

a. they shall become due within no more than 13 years and at the latest by 31 December 2020 ...;

b. they shall earn interest at an annual rate of 2.5%;

c. they shall be redeemable before their maturity.

Section 27

1. Final judicial decisions concerning old foreign-currency savings shall also be subject to verification ...

2. ... The provisions of this Act concerning the cancellation of interest, cash payments and State bonds shall apply.

Section 28

The competent court shall of its own motion submit any pending case to the verification process in accordance with this Act.”

4. Legislation of the Federation of Bosnia and Herzegovina

(a) Settlement of Claims Against the Federation of Bosnia and Herzegovina Act 1997 (Zakon o utvrđivanju i realizaciji potraživanja građana u postupku privatizacije; published in the Official Gazette of the Federation of Bosnia and Herzegovina – “OG FBH” – no. 27/97 of 28 November 1997; amendments published in OG FBH nos. 8/99 of 5 March 1999, 45/00 of 25 October 2000, 54/00 of 26 December 2000, 32/01 of 24 July 2001, 27/02 of 28 June 2002, 57/03 of 21 November 2003 and 44/04 of 21 August 2004)

This Act has been in force since 28 November 1997. It provides that the Federation of Bosnia and Herzegovina, and no longer the banks located in its territory, is liable for the “old” foreign-currency savings under the following conditions:

Section 3(1) (as amended on 5 March 1999)

“A person who has foreign-currency savings in banks or any of their branches located in the territory of the Federation of Bosnia and Herzegovina in an amount exceeding 100 [Bosnian markas][5], who was a citizen of the former Socialist Republic of Bosnia and Herzegovina and who, on 31 March 1991, was permanently residing in the territory which is now the Federation of Bosnia and Herzegovina shall acquire a claim against the Federation of Bosnia and Herzegovina in the amount of the balance in his or her savings accounts on 31 March 1992.”

The “old” foreign-currency savings were to be registered at special accounts administered by the Privatisation Agency of the Federation of Bosnia and Herzegovina without prior agreement of savers (section 5, as amended on 1 January 2001, and sections 7, 10 and 11). The “old” foreign-currency savers had to use their claims against such special accounts within a limited period of time (after which expiration they ceased) for the purchase of State-owned apartments in which they lived and/or for the purchase of State-owned companies (sections 15 and 18). The claims were transferable, which included a possibility of selling them on the secondary market for a fraction of their nominal value (section 16).

Following the above-mentioned decisions of the former Human Rights Chamber (see, for example, the Poropat and 3 Others decision above) and the judgment of the Constitutional Court of the Federation of Bosnia and Herzegovina of 8 January 2001 which declared sections 3, 7, 11 and 18 of this Act unconstitutional (published in OG FBH no. 7/01 of 9 March 2001), this Act has been amended. As of 29 November 2003, each saver is free to choose whether this Act will continue to be applicable to his or her “old” foreign-currency savings or not. On 23 August 2004 section 5a was introduced: this Act is no longer applicable to one’s “old” foreign-currency savings, unless he or she submitted a statement to contrary to the Ministry of Finance of the Federation of Bosnia and Herzegovina by 23 November 2004. If such a statement was indeed submitted, the “old” foreign-currency savings could be used for the purchase of State-owned companies until 30 June 2006 and for the purchase of State-owned apartments until 30 June 2007 (section 18, as amended on 23 August 2004).

(b) Privatisation of Companies Act 1997 (Zakon o privatizaciji preduzeća; published in OG FBH no. 27/97 of 28 November 1997; amendments published in OG FBH nos. 8/99 of 5 March 1999, 32/00 of 30 August 2000, 45/00 of 25 October 2000, 54/00 of 26 December 2000, 61/01 of 31 December 2001, 27/02 of 28 June 2002, 33/02 of 19 July 2002, 28/04 of 26 May 2004 and 44/04 of 21 August 2004)

This Act has been in force since 6 December 1997. Sections 20 and 28 of this Act, as amended on 23 August 2004, provide that one can use his or her “old” foreign-currency savings for the purchase of certain (mainly smaller) State-owned companies until 30 June 2006 under the condition that a minimum 90% of the price is paid in cash. Prior to those amendments (that is, between 2 November 2000 and 23 August 2004), it was possible to pay the full price of a State-owned company with one’s “old” foreign-currency savings.

(c) Settlement of Domestic Debt Act 2004 (Zakon o utvrđivanju i načinu izmirenja unutrašnjih obaveza Federacije Bosne i Hercegovine; published in OG FBH no. 66/04 of 27 November 2004; amendments published in OG FBH no. 49/05 of 8 August 2005)

This Act has been in force since 29 November 2004. However, the relevant provisions (concerning the matter of “old” foreign-currency savings) were annulled with effect as from 17 January 2006 (see the Constitutional Court’s decision no. U 14/05 of 2 December 2005 above).

5. Status of the bank in which the applicant has deposited funds

The Privredna banka Sarajevo – Osnovna banka Tuzla was a branch of the State-owned Privredna banka Sarajevo. In 1990 it became a separate bank, named Tuzlanska banka. In 1998 it was privatised and subsequently became part of the Slovenian-based Nova Ljubljanska banka Group.

COMPLAINT

The applicant complained under Article 1 of Protocol No. 1 to the Convention about his inability to dispose freely of his “old” foreign-currency savings.

THE LAW

The applicant deposited foreign currency in the bank indicated above during the 1970s and 1980s (that is, prior to the dissolution of the former Socialist Federal Republic of Yugoslavia – “the SFRY”). Although in 1992 Bosnia and Herzegovina took over the guarantee for “old” foreign-currency savings from the former SFRY, the applicant has never been able to dispose freely of his savings, due to various statutory provisions. The applicant could have converted his savings to privatisation coupons which he could have used to purchase State-owned companies. Under recent legislation, he can expect to receive approximately 500 euros in cash and the remaining amount of his savings in State bonds (see “Relevant law and practice” above).

The applicant complained about this situation under Article 1 of Protocol No. 1 to the Convention. That provision reads 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.”

A. The legal nature of the former Human Rights Chamber and the Human Rights Commission within the Constitutional Court

The Government argued that the present case was substantially the same as a matter that had already been submitted to “another procedure of international investigation or settlement” within the meaning of Article 35 § 2 (b) of the Convention, the former Human Rights Chamber being such a procedure. Since no relevant new information had been submitted by the applicant, the Government submitted that the application was inadmissible. The Government also maintained that the applicant should have chosen the Constitutional Court over such an international body. The applicant disagreed.

The Court has already resolved the issue of the legal nature of the former Human Rights Chamber: that body was not considered to be an “international” one within the meaning of Article 35 § 2 (b) of the Convention (see the Jeličić decision cited above). The Court does not see any reason why the same conclusion would not apply to the Human Rights Commission within the Constitutional Court. Proceedings before the latter body should also be considered a “domestic” remedy within the meaning of Article 35 § 1 of the Convention.

The Government’s objection is therefore dismissed.

B. The applicant’s victim status

The recent Old Foreign-Currency Savings Act 2006 has substantially changed the situation about which the applicant complained. Prior to that Act, the applicant could only use his “old” foreign-currency savings to purchase State-owned companies under certain conditions. At present, the applicant would be entitled to receive approximately 500 euros by the end of 2007 and the remaining part of his “old” foreign-currency savings in State bonds. As to past loss, the applicant is entitled to interest at an annual rate of 0.5% for the period between 1 January 1992 and 15 April 2006 (that is, approximately 9,300 euros for the entire period, calculated on the basis of the applicant’s estimation of the amount of his savings which must be verified in accordance with the Old Foreign-Currency Savings Act 2006). Moreover, the Human Rights Commission within the Constitutional Court found a violation of Article 6 of the Convention and Article 1 of Protocol No. 1 to the Convention in the applicant’s case and awarded him approximately 250 euros for non-pecuniary damage and legal costs. Therefore, a question arises as to whether the applicant has ceased to be a victim of the alleged breach within the meaning of Article 34 of the Convention.

The Court recalls in this connection that an individual may no longer claim to be a victim of a violation of the Convention where the national authorities have acknowledged, either expressly or in substance, a breach of the Convention and afforded redress (see Posokhov v. Russia, no. 63486/00, § 35, ECHR 2003‑IV).

While there is no provision of the Old Foreign-Currency Savings Act 2006 expressly stating that the human rights of numerous “old” foreign-currency savers have previously been violated, it is the case that the said Act was passed with a view to implementing the decisions of the Constitutional Court, the former Human Rights Chamber and the Human Rights Commission within the Constitutional Court. In any case, the applicant obtained an acknowledgment of a violation of the Convention from the competent domestic body.

However, as to redress, the Court reiterates that, it is only where the redress can be considered to be appropriate and sufficient, the applicant may lose his victim status (see Scordino v. Italy (no. 1) [GC], no. 36813/97, § 193, ECHR 2006‑...). This question of redress goes to the heart of the issue as to whether the requirements of the right of property under Article 1 of Protocol No. 1 were complied with in the particular circumstances (see immediately below). It would thus, in the Court’s view, be more appropriately examined at the merits stage (see, mutatis mutandis, Broniowski v. Poland (dec.) [GC], no. 31443/96, ECHR 2002‑X).

The Court accordingly joins the question of the applicant’s victim status to the merits of the case.

C. Compliance with Article 1 of Protocol No. 1 to the Convention

The parties disputed whether the statutory restrictions on the use of “old” foreign-currency savings were “necessary” within the meaning of Article 1 of Protocol No. 1 to the Convention given the proportions of the public debt and the overall situation in post-war Bosnia and Herzegovina.

The Court considers, in the light of the parties’ submissions, that the application raises serious issues of fact and law under the Convention, the determination of which requires an examination of the merits.

No other ground for declaring the application inadmissible has been established.

For these reasons, the Court unanimously

Joins to the merits the question of the applicant’s victim status;

Declares the application admissible, without prejudging the merits of the case.

T.L. EarlyNicolas Bratza
RegistrarPresident

[1] Approximately 250 euros.

[2] Approximately 1,012,000,000 euros.

[3] Approximately 50 euros.

[4] Approximately 500 euros.

[5] Approximately 50 euros.

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