FIRST SECTION
DECISION
Application no. 33898/15
Luciano VANNUCCI
against San Marino
The European Court of Human Rights (First Section), sitting on 28 March 2017 as a Chamber composed of:
Linos-Alexandre Sicilianos, President,
Kristina Pardalos,
Aleš Pejchal,
Robert Spano,
Armen Harutyunyan,
Tim Eicke,
Jovan Ilievski, judges,
and Renata Degener, Deputy Section Registrar,
Having regard to the above application lodged on 4 July 2015,
Having deliberated, decides as follows:
THE FACTS
1. The applicant, Mr Luciano Vannucci, is a San Marinese national who was born in 1949 and lives in Faetano. He was represented before the Court by Mr A. Campagna, a lawyer practising in Dogana.
A. The circumstances of the case
2. The facts of the case, as submitted by the applicant, may be summarised as follows.
1. Background to the case
3. In 2009 criminal proceedings were instituted in Italy against a named individual, X, who was charged, inter alia, with issuing invoices for fictitious operations (emissione di fatture per operazioni inesistenti) and fraudulent bankruptcy to the detriment of an Italian company, C. (under the control of X and later declared bankrupt on an unspecified date).
2. The proceedings under letter of request no. 81/2009 in connection with the proceedings against X
4. In the context of the above-mentioned Italian proceedings against X, the Public Prosecutor’s Office in Milan sent a letter of request (no. 81/2009) to the San Marino judicial authorities, seeking their assistance in accordance with Article 29 of the bilateral Convention on Friendship and Good Neighbourhood between San Marino and Italy of 1939. The request was aimed at obtaining information and documents and carrying out searches in all the San Marinese banks, fiduciary institutions and companies involved with X.
5. In particular, the Public Prosecutor stated that investigations into fraudulent bankruptcy had begun after company C. had been declared bankrupt as it was suspected that the funds used to pay the above‑mentioned invoices for fictitious operations and other large amounts of money had been taken from the assets of company C. It further transpired that once company C. had gone bankrupt, 1,373,814.10 euros (EUR) had been transferred from a current account owned by the Italian company F. to a current account (no.1) owned by a San Marinese company, Z., via three cheques. To justify such transfers, Z. had issued a series of false sales invoices.
6. On 13 January 2009 the sum of EUR 1,273,814 had been transferred from company Z.’s current account to another current account (no. 2) that was also in its name.
7. A series of cash withdrawals amounting to EUR 1,224,500 had been made from account no. 2 and over the same period of time a similar amount had been deposited in a current account connected to a fiduciary mandate under no. MS1314/A, which had been opened on 27 February 2009 by a certain B. in his capacity as legal representative of a certain, named company.
8. On the basis of the information provided by the Italian Public Prosecutor, on 30 April 2009 the investigating judge (Commissario della Legge Inquirente), considering that all the requirements set by the law for the execution of letters of request had been fulfilled, accepted the Italian request in relation to fraudulent bankruptcy and ordered the execution of the request by means of an exequatur order.
9. The investigating judge ordered the search of a specific San Marinese bank in order to obtain all the documents and relevant information related to current account no. 1, into which the three cheques had been paid. The judge also ordered the bank to submit a copy of all the relevant documents in its possession within ten days. The judge further ordered the freezing of account no. 1 and the seizure of all the money in it, which had been traced back to X, and company Z, as well as the freezing of any other current accounts and the seizure of their contents if any money from current account no. 1 could possibly have been transferred there. In addition, any legal entities or individuals concerned, who had been notified of the exequatur order, were ordered to submit a copy of all the relevant documents in their possession within ten days.
10. On 4 May 2009 the judicial police (Polizia Giudiziaria) carried out the exequatur order by freezing current accounts nos. 1 and 2 (both belonging to company Z.), which at the time had balances of EUR 690.22 and EUR 99,460.47 respectively. Some documents related to the two current accounts were also seized during the same search.
11. On an unspecified date, one of the institutions that had been served with the exequatur order (company F.P.) informed the authorities that it administered a fiduciary mandate put in place by “one of the accused people” (the above-mentioned fiduciary mandate no. MS1314/A). As a consequence, on 6 May 2009 the judicial police seized a further EUR 1,194,290 from the current account connected to the mandate and EUR 5,000 deposited in a bearer savings book (libretto al portatore) belonging to the new administrator of company F. (a certain P.). The total sum was thus EUR 1,299,440.69.
3. The proceedings under letter of request no. 110/2009 in connection with the Italian proceedings against the applicant and M.
12. On an unspecified date the Public Prosecutor’s Office in Milan sent another letter of request to the investigating judge (no. 110/2009) as a complement to letter no. 81/2009. The request was aimed at charging the applicant and another person, M., with the offence of money laundering.
13. By a decision of 8 June 2009 the investigating judge accepted the request in relation to the crime of money laundering and instructed the judicial police to identify the applicant and to question him and M. within twenty days. Moreover, considering that the alleged offence had been committed in San Marino, the judge also ordered the institution of criminal proceedings against the applicant and M. for money laundering under Article 199 bis of the Criminal Code.
4. The release of the seized assets
14. On 22 March 2011, the Italian Public Prosecutor, in the context of the proceedings under letter of request no. 81/2009, asked the investigating judge to release all the money that had been seized so it could be returned to the bankrupt company C. and for control (affidamento) to be given to the insolvency administrator of the company who had been joined as a civil party to the Italian proceedings for fraudulent bankruptcy. The request was made after a similar one had been submitted directly by X. to the San Marinese courts on 4 March 2011. That request was attached to the one from the Public Prosecutor.
15. The investigating judge accepted the request made by the Italian Public Prosecutor by a decision of 23 March 2011. In line with Article 25 of the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism of 2005, ratified by San Marino in 2010, the judge ordered that sums that had been seized and traced back to X should be released and returned to company C. and that control of the money should be given to the insolvency administrator of the bankrupt company.
16. On 4 April 2011, the judicial police executed the above-mentioned decision by releasing EUR 1,211,384.50 and transferring it to company C.’s current account.
17. Neither the decision of 23 March 2011 nor the subsequent police report concerning the execution of the order were ever notified or communicated to the applicant or to any other accused party in the criminal proceedings no. 665/RNR/2009.
5. The first-instance proceedings against the applicant (for money laundering)
18. By a judgment delivered in the above-mentioned criminal proceedings on 13 June 2013, filed in the registry on 23 December 2013 and notified to the applicant on 16 January 2014, the first-instance criminal judge (Commissario della Legge Decidente) found the applicant and four other people guilty of money laundering under Articles 50, 73 and 199 bis of the Criminal Code, over the period of January to April 2009. The applicant was sentenced to three years and six months’ imprisonment and prohibited for four years and six months from holding public office and exercising political rights or running a business.
19. The judge held that the applicant had had the operational role of organising the companies’ structures, which were then used to disguise the various money transfers which had constituted money laundering. According to the judge it had been shown that the money transferred to the company Z.’s current accounts had come from F. and had originally derived from the bankrupt company C.
20. The judge, applying Article 147 of the Criminal Code, also ordered the confiscation of the money that was still subject to the seizure order and which had not been transferred to company C. (EUR 104,440.69). He also sentenced the applicant and his co-accused to pay, in solidum, EUR 1,273,673.41 (the sum returned to company C.), known as “confiscation by way of equivalent measures” (confisca per equivalente), in accordance with Article 147 § 3 of the Criminal Code (see paragraph 31 below). The order was issued because it was impossible to confiscate the further amount of money considered to have been laundered as it had been returned to company C.
6. The appeal proceedings
21. On 17 February 2014, the applicant appealed against his conviction, challenging, inter alia, the order to pay the equivalent amount of money.
22. The applicant complained that the order to pay EUR 1,273,673.41 had to be considered as an unfair duplication of the penalty against him, noting that that sum of money had previously been seized and then transferred (in accordance with the investigating judge’s decision) by way of compensation to the company that had been the victim of bankruptcy, without involving the applicant or his co-defendants.
23. The applicant complained that the inability to carry out a “direct confiscation”, which was a prerequisite under the law for applying “confiscation by way of equivalent measures”, had not been the result of any actions by him, and thus he should not have been held responsible for the payment of such an amount.
24. The applicant also mentioned the unconstitutionality of, on the one hand, the “overlapping” of compensation for victims and, on the other, the confiscation of an equivalent amount of money. He argued that that had led to an unjustified payment by those who had been sentenced.
25. On 17 March 2014 the applicant made further written submissions, reiterating, inter alia, the argument of unconstitutionality.
26. By a judgment of 8 January 2015, filed in the registry on 14 January 2015, the applicant’s appeal was dismissed by the Judge of Criminal Appeals (Giudice d’Appello Penale).
27. The judge noted that the complaint regarding the confiscation of an equivalent amount had to be considered as clearly irrelevant given the fact that Article 147 § 3 of the Criminal Code (as modified by Law no. 28 of 26 February 2004), did not provide that the prerequisite for such a confiscation order was that “direct confiscation” had been made impossible by the defendant. The judge further noted that at the time of the first‑instance judgment it had not been possible for the judge to order the direct confiscation of all the assets which had been laundered as most of them had already been transferred to company C. The judge had therefore been correct in ordering the accused, including the applicant, to pay an equivalent amount of money.
B. Relevant domestic law
28. Article 29 of the Bilateral Convention on Friendship and Good Neighbourhood between Italy and San Marino of 1939, in so far as relevant, reads as follows:
Article 29
“The judicial authority of each contracting State, following a request from the other contracting State, shall notify acts, execute acts in conjunction with preliminary investigations, including the seizure of objects constituting the corpus delicti, and carry out any other act related to criminal proceedings ongoing before the above‑mentioned authorities.”
29. Article 25 of the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism of 2005, ratified by San Marino on 2010, in so far as relevant, reads as follows:
Article 25
“1. Property confiscated by a Party pursuant to Articles 23 and 24 of this Convention, shall be disposed of by that Party in accordance with its domestic law and administrative procedures.
2. When acting on the request made by another Party in accordance with Articles 23 and 24 of this Convention, Parties shall, to the extent permitted by domestic law and if so requested, give priority consideration to returning the confiscated property to the requesting Party so that it can give compensation to the victims of the crime or return such property to their legitimate owners.
3. When acting on the request made by another Party in accordance with Articles 23 and 24 of this Convention, a Party may give special consideration to concluding agreements or arrangements on sharing with other Parties, on a regular or case‑by‑case basis, such property, in accordance with its domestic law or administrative procedures.”
30. Article 199 bis of the Criminal Code, as amended by Chapter 2, Article 7 of Law no. 28 of 26 February 2004, and by Article 77 § 2 of Law 92 of 17 June 2008, as applicable at the time of the facts (January‑April 2009) in so far as relevant, read as follows:
Article 199 bis
“1. A person is guilty of money laundering, where, except in cases of aiding and abetting, he or she conceals, substitutes, transfers or co-operates with others to so do, money which he knows or should know was obtained as a result of crimes not resulting from negligence or contraventions, with the aim of hiding its origins.
2. or whosoever uses, or cooperates or intervenes with the intention of using, in the area of economic or financial activities, money which he knows or should know was obtained as a result of crimes not resulting from negligence or contraventions.”
3. If the crime at the origin of the laundered money has been committed in a foreign country, such a crime has also to constitute a prosecutable criminal offence in San Marino (deve essere penalmente perseguibile e procedibile anche per l’ordinamento Sammarinese)
...
7. The judge applies the penalty provided for the predicate offence if it is less heavy.”
31. Article 147 of the San Marino Criminal Code, as modified by Article 5 of Law no. 28 of 26 February 2004, read at the time of the commission of the offence in the present case (January – April 2009) as follows:
Article 147
“1. In a judgment of conviction, the Judge shall order (il giudice ordina) the confiscation of the items belonging to the convicted person which were used or were intended to be used to commit the crime, as well as the confiscation of the price, the product, and the profit of the crime.
...
3. In a judgment of conviction the Judge shall always order (è sempre obbligatoria) the confiscation of the items which were used or were intended to be used to commit the offence ex Art.199 bis (money laundering), or offences connected to terrorism, or offences with the purpose of subverting the constitutional order, as well as ordering the confiscation of the price, the product and the profit of the crime. If confiscation is not possible the Judge shall order (impone l’obbligo di) the payment of an amount of money equivalent to the value of the above-mentioned items.
4. The confiscated items or the equivalent amount of money shall be allocated to the State Revenue Service or, if necessary, destroyed.”
COMPLAINTS
32. The applicant complained under Article 7 of the Convention that the order to pay EUR 1,273,673.41 had been unlawful since the impossibility of executing a direct order was not dependent on him.
33. The applicant also complained under Article 6 § 2 of the Convention that the specific issue of his responsibility for it being impossible to carry out such a direct confiscation had not been the object of an assessment in the criminal proceedings, and that no prior accusation had been made against him on that specific point. That had resulted in a violation of his right to a fair trial and to the presumption of innocence.
34. In addition, the applicant invoked Article 4 of Protocol No. 7 to the Convention, complaining that he had been punished twice for the same offence. He alleged that paying compensation to the victim and paying the same amount via confiscation by equivalent means should have been considered as alternatives and therefore should not have been applied together.
THE LAW
A. Article 7 of the Convention
35. The applicant complained that the order to pay 1,273,673.41 euros (EUR), issued by the judge as confiscation by equivalent means had breached Article 7 of the Convention. The relevant provision, in so far as relevant, reads as follows:
“1. No one shall be held guilty of any criminal offence on account of any act or omission which did not constitute a criminal offence under national or international law at the time when it was committed. Nor shall a heavier penalty be imposed than the one that was applicable at the time the criminal offence was committed.”
36. The applicant submitted that under the Criminal Code an order to pay an equivalent amount of money can only be applied by a judge when direct confiscation is impossible. He said that the inability to carry out a direct confiscation had not been his fault and had been caused solely by the investigating judge’s unilateral decision to return most of the seized money to the Italian company that had been a victim of a fraudulent bankruptcy. The applicant argued therefore that the “confiscation by equivalent means”, which should be considered a criminal sanction, had been applied in a situation for which he had not been responsible, violating the nulla poena sine culpa principle.
37. The Court reiterates that the guarantee enshrined in Article 7, which is an essential element of the rule of law, occupies a prominent place in the Convention system of protection, as is underlined by the fact that no derogation from it is permissible under Article 15 in time of war or other public emergency. It should be construed and applied, as follows from its object and purpose, in such a way as to provide effective safeguards against arbitrary prosecution, conviction and punishment (see Del Rio Prada v. Spain [GC], no. 42750/09, § 77, ECHR 2013).
38. Accordingly, Article 7 is not confined to prohibiting the retrospective application of the criminal law to an accused’s disadvantage: it also embodies, more generally, the principle that only the law can define a crime and prescribe a penalty (nullum crimen, nulla poena sine lege) and the principle that the criminal law must not be extensively construed to an accused’s detriment, for instance by analogy. It follows from these principles that an offence must be clearly defined in the law, be it national or international. This requirement is satisfied where the individual can know from the wording of the relevant provision ‑ and, if need be, with the assistance of the courts’ interpretation of it and with informed legal advice ‑ what acts and omissions will make him criminally liable. The Court has thus indicated that when speaking of “law” Article 7 alludes to the very same concept as that to which the Convention refers elsewhere when using that term, a concept which comprises written as well as unwritten law and implies qualitative requirements, notably those of accessibility and foreseeability (see, inter alia, Vasiliauskas v. Lithuania [GC], no. 35343/05, § 154, ECHR 2015).
39. The “penalty” and “punishment” rationale and the “guilty” concept (in the English version) and the corresponding notion of “personne coupable” (in the French version) support an interpretation of Article 7 as requiring, in order to implement punishment, a finding of liability by the national courts enabling the offence to be attributed to and the penalty to be imposed on its perpetrator. Otherwise the punishment would be devoid of purpose. It would be inconsistent on the one hand to require an accessible and foreseeable legal basis and on the other to permit punishment where the person in question has not been convicted (see Varvara v. Italy, no. 17475/09, § 71, 29 October 2013).
40. As to whether an order to pay a sum which is equivalent to the amount of money constituting the object of a crime can be regarded as a penalty, the Court reiterates that the wording of Article 7 § 1 indicates that the starting-point in any assessment of the existence of a penalty is whether the measure in question is imposed following conviction for a “criminal offence”. Other factors that may be taken into account as relevant in this connection are the nature and purpose of the measure in question, its characterisation under national law, the procedures involved in the making and implementation of the measure and its severity (see Welch v. the United Kingdom, 9 February 1995, § 28, Series A no. 307‑A, and Kafkaris v. Cyprus [GC], no. 21906/04, § 142, ECHR 2008).
41. Turning to the present case, the Court notes that the applicant was convicted of money laundering under Article 199 bis of the Criminal Code. In the same judgment the judge, given the fact that the direct confiscation of the laundered assets was impossible, ordered the applicant, in solidum with other persons, to pay an equivalent sum of money, pursuant to Article 147 of the Criminal Code (see paragraph 31 above). Hence, in view of the fact that the measure concerned followed a conviction for a criminal offence, that it was clearly punitive in nature, the lack of any compensatory purpose and the significant amount involved, the Court considers that it amounted, in the circumstances of the present case, to a penalty (see, mutatis mutandis, Welch, § 35, and Kafkaris, § 142, both cited above).
42. The applicant argued that Article 7 of the Convention had been breached as the order under Article 147 § 3 of the Criminal Code had been made notwithstanding the fact that the impossibility of ordering direct confiscation had not been caused by his fault. The measure had thus been imposed in a situation for which he was not responsible (see paragraph 36 above). In this regard, the Court observes that, in accordance with that provision, in cases where direct confiscation is not possible the judge shall order the payment of an amount of money equivalent to the value of the items which were used or were intended to be used to commit the offence (see paragraph 31 above). On this legal basis, the judge at first‑instance sentenced the applicant and his co-accused to pay an amount equivalent to the sum already returned to company C, holding that the order was issued because it was impossible to confiscate the laundered money directly (see paragraph 20 above). On appeal, the applicant challenged that measure, arguing ‑ as he did before the Court - that the impossibility of carrying out a direct confiscation had not resulted from his actions. This argument was rejected by the Judge of Criminal Appeals by the final judgment finding that the domestic law did not require that direct confiscation be made impossible “by the defendant” (see paragraph 27 above).
43. The Court notes that under Article 147 § 3 of the Criminal Code the imposition of confiscation by equivalent means following a conviction for money laundering is not linked with a defendant’s culpable conduct that has thwarted direct confiscation. In consequence, as direct confiscation was no longer possible after the investigating judge’s decision to return the seized assets to company C. taken on 23 March 2011 (see paragraph 15), the first‑instance judge, when sentencing the applicant, was obliged under that provision, as interpreted by the domestic courts, to order confiscation of equivalent means. It should be noted that, in accordance with Article 147 § 4 of the Criminal Code, the equivalent amount of money was to be allocated to the State Revenue Service. It was therefore clear that by his conduct the applicant could and ought to have expected, if necessary with appropriate legal advice, that the impugned measure, constituting a criminal penalty, would be applied on the facts of his case.
In view of the foregoing, the Court finds that the application of Article 147 § 3 of the Criminal Code in the applicant’s case was foreseeable and in conformity with Article 7 of the Convention.
It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 § 3 (a) and 4 of the Convention.
B. Article 6 § 2 of the Convention
44. Citing Article 6 § 2 of the Convention, the applicant argued that the specific issue of his responsibility for making direct confiscation impossible had not been the object of an assessment in the criminal proceedings and that no prior accusation against him had been made on that specific point, resulting in a violation of his right to a fair trial and of the presumption of innocence. The relevant provision of the Convention reads as follows:
“2. Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law.”
45. The Court reiterates that in a number of cases it has treated confiscation proceedings following on from a conviction as part of the sentencing process and therefore as beyond the scope of Article 6 § 2 (see, mutatis mutandis, Phillips v. the United Kingdom, no. 41087/98, § 36, ECHR 2001-VII, and Van Offeren v. The Netherlands (dec.), no. 19581/04, ECHR 2005).
46. There is no reason to hold otherwise in the present case. It follows that Article 6 § 2 does not apply to the applicant’s complaint about the confiscation which followed a finding of guilt against him (see, a contrario, Geerings v. The Netherlands, no. 30810/03, § 47, 1 March 2007, concerning a confiscation after acquittal). Accordingly, the complaint is to be rejected as inadmissible ratione materiae within the meaning of Article 35 § 3 (a) and § 4 of the Convention.
C. Article 4 of Protocol 7 to the Convention
47. The applicant complained under Article 4 of Protocol No. 7 that he had been punished twice for the same offence. He alleged that returning the money to the company that had been the victim of a crime and the payment of the same amount in a confiscation by equivalent means should have been considered as alternative and therefore should not have been applied together. The relevant provision of the Convention reads:
“1. No one shall be liable to be tried or punished again in criminal proceedings under the jurisdiction of the same State for an offence for which he has already been finally acquitted or convicted in accordance with the law and penal procedure of that State.”
48. The Court reiterates that Article 4 of Protocol No. 7 must be understood as prohibiting the prosecution or trial of a second “offence” in so far as it arises from identical facts or facts which are substantially the same (see Sergey Zolotukhin v. Russia [GC], no. 14939/03, § 82, ECHR 2009, and A and B v. Norway [GC], nos. 24130/11 and 29758/11, § 108, ECHR 2016). Moreover, the aim of the provision is to prohibit the repetition of criminal proceedings that have been concluded by a “final” decision (see Franz Fischer v. Austria, no. 37950/97, § 22, 29 May 2001, and Gradinger v. Austria, 23 October 1995, § 53, Series A no. 328‑C).
49. The Court considers that the proceedings to take into account in the present case are those in Italy for fraudulent bankruptcy (and the linked letter of request proceedings, in which the judge ordered the seizure or restitution of assets to the bankrupt company) and the San Marinese proceedings for money laundering, in which the judge issued the order to pay the equivalent amount of money.
50. The Court notes that the seizure of the assets and their return to company C. and the order to pay an equivalent amount of money were issued in separate proceedings which were opened against different persons (X. in the former case and the applicant and four other persons in the latter). The applicant was neither part of the proceedings for fraudulent bankruptcy in which the restitution request was issued by the Italian Public Prosecutor, nor of the letter of request proceedings in which that request was accepted by the investigating judge and the assets returned (see paragraphs 3 and 8 above). He cannot therefore be considered as having been tried and punished in those proceedings. In addition, the Court reiterates its case‑law to the effect that Article 4 of Protocol No. 7 does not secure the ne bis in idem principle in respect of prosecutions and convictions in different States (see, among other authorities, Trabelsi v. Belgium, no. 140/10, § 164, ECHR 2014 (extracts)).
51. Moreover, the seizure and restitution of the assets did not directly concern any property belonging to the applicant, since, according to the documents submitted in the case, the assets had been traced back (directly or indirectly) to company Z, and a large part of them had been deposited in the current accounts linked to the fiduciary mandate put in place by the co‑accused, B. Accordingly, the applicant neither owned the assets returned to the company that was the victim of the crime, nor did he exercise any form of control or possession over them.
52. It follows that Article 4 of Protocol No. 7 to the Convention is not applicable to the proceedings at issue. Accordingly, the remainder of the application must be rejected as inadmissible ratione materiae within the meaning of Article 35 § 3 (a) and § 4 of the Convention.
For these reasons, the Court, unanimously,
Declares the application inadmissible.
Done in English and notified in writing on 27 April 2017.
Renata DegenerLinos-Alexandre Sicilianos
Deputy Section RegistrarPresident
Full & Egal Universal Law Academy