Zaghini v. San Marino

Legal summary
May 2023

Zaghini v. San Marino – 3405/21

Judgment 11.5.2023 [Section I]
Article 1 of Protocol No. 1
Article 1 para. 1 of Protocol No. 1
Deprivation of property
Article 1 para. 2 of Protocol No. 1
Control of the use of property

Confiscation of sum of money and applicant’s inability to recover it, following criminal proceedings against third parties for money laundering: no violation

Facts – In 2003 criminal proceedings were initiated in Italy against the applicant in relation to tax evasion and making unjust profits at the expense of the State. A request for legal assistance by letters rogatory made by the Italian prosecuting authorities was accepted by the competent Judge (“CoL” – Commissario della Legge) of the Court of San Marino, who ordered the execution of asset investigations against the applicant’s father and other persons, including G.A. and P.A., as well as the seizure of sums of money and, inter alia, safe deposit boxes. Following an investigation, the CoL ordered the institution of criminal proceedings for the offence of money laundering against the above three persons. The San Marino investigating judge ordered the seizure of the sum of 1,892,700 euros (EUR) which had been deposited in a safety deposit box in the name of G.A. In 2005 the three co-accused were found guilty at first-instance, sentenced to suspended sentences of imprisonment and the sum, which had been seized, was ordered to be confiscated. That judgment, to the extent it concerned the guilt of the applicant’s father and P.A. and the confiscation, was confirmed in 2008 on appeal.

In 2016 the Italian criminal proceedings against the applicant were declared time-barred and the Bologna Court of Appeal ordered the restitution of money preventively seized. The applicant unsuccessfully sought the return of the sums seized in San Marino before the judge for international cooperation and later the Enforcement Judge, given, in particular, the res judicata 2008 judgment in the criminal proceedings in San Marino. All his appeals were also rejected.

Law –

Article 1 of Protocol No.1:

(i) The applicable rule, lawfulness and legitimate aim – The Court left open the question under which rule of Article 1 of Protocol No. 1 the confiscation had to be examined (deprivation of possessions or control of the use of property). It found that the measure had a lawful basis and had pursued a legitimate aim, in the general interest, namely the fight against money laundering. In connection to the latter, the Court observed that money laundering directly threatened the rule of law. In particular, the Council of Europe Conventions on the matter had bound States to criminalise the laundering of the proceeds of crime and provide for other measures to combat this growing national and international phenomenon. Depriving a person of the product and the profits of the laundering or other crimes, was in line with the powers conferred on courts as a weapon in the fight against money laundering. Moreover, confiscating laundered money was intended to prevent re-offending and to eliminate such funds from circulating further into the economy, both measures in line with international standards.

(ii) Proportionality – Although the CoL had considered the confiscation to be obligatory, it had been for the judge to make an assessment of what property had to be confiscated. In the present that had been the EUR 1,892,700, which had been seized by the police and had constituted the profit made as a result of the illegal activity investigated in Italy. In relation to confiscation of property linked to serious offences, the Court did not require proof “beyond reasonable doubt” of the illicit origins of the property. Instead, proof on a balance of probabilities or a high probability of illicit origins, combined with the inability to prove the contrary, sufficed for the purposes of the proportionality test under Article 1 of Protocol No. 1. The circumstances of the present case were entirely distinguishable from those in G.I.E.M. S.R.L. and Others v. Italy, where other measures apart from confiscation could have been applied to achieve the aim pursued. Nor could the present case be compared to those concerning mandatory confiscation in connection with custom offences (in relation to concealed or exported goods, undeclared cash) or related to vehicles used for crime; none of those cases concerned items being harmful, or a source of further reoffending, in themselves, such as was the case with laundered money.

The aim pursued in the present case had been precisely to prevent re-offending (by means of the mere holding of that laundered money) and the further circulation of those funds into the economy with the harm that that brought. There had thus been little room for any other measure than the mandatory confiscation of the sums that had been identified as illicit funds. The criminal courts’ decision to apply the confiscation measure to the sums which had already been seized had been the result of a judicial assessment on the basis of the evidence available. Indeed, nothing suggested that, had any of the accused been able to prove the licit origin of at least part of those funds those courts would not have reduced the amount to be confiscated accordingly. Thus, while the confiscation had been mandatory, an element of assessment still pertained to the judges in relation to what had to be confiscated. There was no assertion, even less any evidence, that the trial of the accused leading to the confiscation had not been fair, or that it had been based on arbitrary considerations. The mere fact that the confiscation had related to a substantial sum of money did not make it disproportionate.

As to the applicant’s opportunity of putting his case to the authorities, firstly, contrary to the case of Denisova and Moiseyeva v. Russia, the instant case did not concern the issue of the ownership of the confiscated property; the money ownership appeared to have been undisputed and had been irrelevant in view of the confiscation’s aim . Furthermore, the sum confiscated had represented the sum seized; the applicant however had not challenged the seizure. Secondly, while the applicant had complained about the lack of his participation in the criminal proceedings, none of the individuals he had trusted with his money had called him as a witness. Even though the San Marino domestic legal system did not as such provide for someone in the applicant’s position to acquire a status as a party in the criminal proceedings ex officio, the applicant had not requested to be heard in those proceedings. Article 1 of Protocol No. 1 did not require that “real owners” were given a reasonable opportunity to put their case during the criminal proceedings against perpetrators, that is, even before the measure was put in place. A reasonable possibility of putting the case before the authorities after the criminal proceedings had come to an end sufficed, particularly in the context of money laundering where the identification of “real owners” could prove difficult.

The applicant had made no attempt to challenge the confiscation order, once final, in the seven months before it had been enforced or any time soon after; he challenged it nine years later. Despite that delay on his part, various instances had accepted to take cognisance of his requests and had examined his claims. In particular, the Enforcement Judge and subsequent appeals (four levels of jurisdiction), engaging specifically with the applicant’s request as set before them, had replied to his arguments, finding that whether he had been found guilty or not had been irrelevant to the confiscation order which had not been related to any such finding, and that the Bologna Court of Appeal’s decision lifting the seizure order had been superseded by a criminal judgment in San Marino confiscating those sums. The former decision had been made without engaging any superseding judgment which could have been delivered by any other authority or jurisdiction and had been confined to its powers and jurisdiction on the matter. The conclusions of the San Marino courts in this respect could not therefore be considered arbitrary.

Lastly, the case before the domestic courts had not concerned a situation where no connection had been established between the applicant as real owner of the assets and the unlawful action leading to the confiscation. The applicant had not claimed that he had been a third party in good faith and had not proved that the funds had been licit. In the absence of any evidence on his part that this had been the case, the Court could not speculate as to what would have been the outcome of those proceedings otherwise. In the specific circumstances of the case, the applicant had been given a reasonable opportunity to put his case to the responsible authorities who had examined – and rejected – his claims as circumscribed by him.

Conclusion: no violation (unanimously).

(See also Denisova and Moiseyeva v. Russia, 16903/03, 1 April 2010; G.I.E.M. S.R.L. and Others v. Italy [GC], 1828/06 and 2 others, 28 June 2018, Legal Summary)

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