Information Note on the Court’s case-law 253
Todorov and Others v. Bulgaria – 50705/11, 11340/12, 26221/12 et al.
Judgment 13.7.2021 [Section IV]
Article 1 of Protocol No. 1
Article 1 para. 1 of Protocol No. 1
Peaceful enjoyment of possessions
Individual, reasoned assessment required to counterbalance deficiencies in legislation on forfeiture of crime proceeds: violation, no violation
Facts – The applicants in each of the cases had assets forfeited as alleged proceeds of crime under the Forfeiture of the Proceeds of Crime Act (2005) (“the 2005 Act”).
Law – Article 1 of Protocol No. 1:
The forfeiture of the applicants’ property had constituted an interference with their rights under Article 1 of Protocol No. 1. In the case at hand, the Court did not have to determine with finality whether that interference had fallen with the scope of the second paragraph of that provision (control of the use of property) or the second sentence of the first paragraph (deprivation of liberty). The principles governing the question of justification were substantially the same.
The interference had a basis in domestic law (the 2005 Act), which had pursued a legitimate aim in the public interest, namely to prevent the illicit acquisition of property through criminal activity and the use of such property. The Court therefore had to determine whether the interference had been proportionate.
The procedure under the 2005 Act, in its entirety, had placed considerable burden on the applicants. The Act’s scope of application had been very large, as concerns the periods of time examined, as well as the list of offences capable of triggering forfeiture proceedings. Proof of the lawful provenance of the assets and of the facts of the case in general could have been difficult, due to the need for the applicants to establish their financial situation as of many years earlier and in the light of evidentiary limitations, in most cases during a period of economic turmoil, also due to the fact that the percentage of shadow economy and thus of undeclared income in Bulgaria had been relatively high. At the same time, the 2005 Act had operated a presumption on the criminal provenance of assets, meaning that the authorities had not had to prove such provenance but could rely only on the lack of lawful income; in some cases this had resulted in an implicit assumption, without evidence and specifications, that the applicants had been involved in other criminal activity.
While none of the deficiencies of the procedure under the 2005 Act could in principle, in themselves, have affected decisively the proportionality of the forfeiture measures against the applicants, the Court had to take into account their cumulative effect. Taken together, the above factors could result in the uncertainty and imprecision criticised by the Court in Dimitrovi v. Bulgaria, in other words they could render forfeiture under the 2005 Act disproportionate to the legitimate aim pursued by it.
In those circumstances, in assessing the proportionality of the interference, the Court would follow the position of the Bulgarian Supreme Court in its Interpretative Decision of 2014, by considering critical, for the achievement of the requisite balance under Article 1 of Protocol No. 1, the establishment of a causal link, direct or indirect, between the assets to be forfeited and the criminal activity, which was “logically justified” and based on the individual circumstances of each case. The Court would therefore verify whether, in the context of each specific case, and as a counterbalance and a guarantee for the applicants’ rights, the domestic courts had provided some particulars as to the criminal conduct in which the assets to be forfeited had been alleged to have originated, and had showed in a reasoned manner that those assets could have been the proceeds of the criminal conduct shown to exist. Such an approach was also reflected in the case law of the Court and in Directive 2014/42/EU. As long as such an analysis had been carried out, the Court would generally defer to the domestic courts’ assessment, unless the applicants had shown such assessment to be arbitrary or manifestly unreasonable.
Depending on the quality of the domestic courts’ assessment, the Court found a breach of Article 1 of Protocol No. 1 in respect of some of the applicants (Todorov, Gaich, Barov, Zhekovi) and no violation in respect of the others (Rusev, Katsarov, Dimitrov).
Conclusion: violation; no violation (unanimously).
Article 41: sums ranging between EUR 2,000 and 4,000 to each applicant in Todorov, Gaich and Barov in respect of non-pecuniary damage. Claims in respect of pecuniary damage dismissed.
(See also Dimitrovi v. Bulgaria, 12655/09, 3 March 2015)