Lexploria

EUROPEAN COMMISSION OF HUMAN RIGHTS

APPLICATION No. 12593/86

R. and R.

against

AUSTRIA

REPORT OF THE COMMISSION

(adopted on 20 May 1992)

TABLE OF CONTENTS

Page

I. INTRODUCTION

(paras. 1 - 20) . . . . . . . . . . . . . . . . . .1

A. The application

(paras. 2 - 4) . . . . . . . . . . . . . . . .1

B. The proceedings

(paras. 5 - 15). . . . . . . . . . . . . . . .1

C. The present Report

(paras. 16 - 20) . . . . . . . . . . . . . . .2

II. ESTABLISHMENT OF THE FACTS

(paras. 21 - 61). . . . . . . . . . . . . . . . . .3

A. The particular circumstances of the case

(paras. 21 - 54) . . . . . . . . . . . . . . .3

1. The seizure of the jewellery pledged to

the applicants

(paras. 21 - 26) . . . . . . . . . . . . . . .3

2. The institution of criminal proceedings

against the applicants' client

(paras. 27 - 31) . . . . . . . . . . . . . . .3

3. Requests for restitution of the jewellery

(paras. 32 - 38) . . . . . . . . . . . . . . .4

4. Lifting of the criminal seizure

(paras. 39 - 44) . . . . . . . . . . . . . . .5

5. The customs and object liability proceedings

(paras. 45 - 54) . . . . . . . . . . . . . . .6

B. Relevant domestic law

(paras. 55 - 61° . . . . . . . . . . . . . . .7

1. Forfeiture in criminal proceedings

under the Code of Financial Offences

(paras. 55 - 58) . . . . . . . . . . . . . . .7

2. Object liability in respect of customs duties

(paras. 59 - 61) . . . . . . . . . . . . . . .9

III. OPINION OF THE COMMISSION

(paras. 62 - 92°. . . . . . . . . . . . . . . . . 11

A. Complaint declared admissible

(para. 62) . . . . . . . . . . . . . . . . . 11

B. Points at issue

(para. 63) . . . . . . . . . . . . . . . . . 11

C. Applicability of Article 6 para. 1 of the

Convention

(paras. 64 - 75) . . . . . . . . . . . . . . 11

D. Compliance with Article 6 para. 1 of the

Convention

(paras. 76 - 91) . . . . . . . . . . . . . . 13

E. Conclusion

(para. 92° . . . . . . . . . . . . . . . . . 15

APPENDIX I : HISTORY OF PROCEEDINGS BEFORE THE COMMISSION. 16

APPENDIX II : DECISION AS TO THE ADMISSIBILITY. . . . . . . 18

I. INTRODUCTION

1. The following is an outline of the case as submitted to the

European Commission of Human Rights, and of the procedure before the

Commission.

A. The application

2. The applicants are two banks established as co-operatives

(Genossenschaften) in the area of Salzburg. They are represented by

Mr. Herwig Liebscher, a lawyer practising in Salzburg.

3. The application is directed against Austria whose Government are

represented by their Agent, Ambassador Helmut Türk, Deputy Secretary

General and Legal Counsel of the Federal Ministry of Foreign Affairs.

4. The application relates to two sets of proceedings concerning a

client of the applicants, i.e. criminal proceedings in which jewellery

pledged to the applicants was seized with a view to its forfeiture, and

customs proceedings in which the seizure was maintained with a view to

satisfying the State's customs claims against the applicants' client.

The applicants claim that these proceedings involved a determination

of their civil rights and complain that the length of the proceedings

exceeded a reasonable time contrary to Article 6 para. 1 of the

Convention.

B. The proceedings

5. The application was introduced on 29 September 1986 and

registered on 19 November 1986.

6. On 6 March 1989 the Commission decided to bring the application

to the notice of the respondent Government and to invite them to submit

before 19 May 1989 observations in writing on the admissibility and

merits of the application.

7. At the Government's request, the time-limit was extended to

9 June 1989. The Government submitted observations on 19 June 1989 and

the applicants replied thereto on 10 August 1989.

8. On 23 April 1990 the applicants submitted information on the

further development of the domestic proceedings.

9. On 7 May 1990 the Commission decided to invite the parties to

submit further observations orally at a hearing on the admissibility

and merits of the case.

10. On 27 August 1990 the applicants submitted supplementary written

observations in preparation of the hearing.

11. The hearing took place on 10 October 1990. The parties were

represented as follows: the Government by their Agent, Mr. Helmut Türk,

who was assisted by Mr. Wolf Okresek of the Federal Chancellery and

Mrs. Irene Gartner of the Federal Ministry of Justice; the applicants

by Mr. Christoph Liebscher, a lawyer practising in Salzburg who was

subdelegated by their counsel, Mr. Herwig Liebscher.

12. On the same day the Commission declared the application

admissible.

13. The text of the decision on admissibility was approved by the

Commission on 8 November 1990. The parties were invited to submit

supplementary observations on the merits before 7 January 1991.

14. The applicants submitted such observations on 19 December 1990,

the Government on 7 January 1991.

15. After declaring the case admissible, the Commission, acting in

accordance with Article 28 (b) of the Convention, also placed itself

at the disposal of the parties with a view to securing a friendly

settlement. In the light of the parties' reaction, the Commission now

finds that there is no basis on which such a settlement can be

effected.

C. The present Report

16. The present Report has been drawn up by the Commission in

pursuance of Article 31 of the Convention and after deliberations and

votes, the following members being present:

MM. J. A. FROWEIN, Acting President

E. BUSUTTIL

G. JÖRUNDSSON

A. S. GÖZÜBÜYÜK

A. WEITZEL

H. G. SCHERMERS

H. DANELIUS

Sir Basil HALL

MM. F. MARTINEZ

C. L. ROZAKIS

Mrs. J. LIDDY

MM. J.-C. GEUS

A. V. ALMEIDA RIBEIRO

M. P. PELLONPÄÄ

17. The text of this Report was adopted on 20 May 1992 and is now

transmitted to the Committee of Ministers of the Council of Europe, in

accordance with Article 31 para. 2 of the Convention.

18. The purpose of the Report, pursuant to Article 31 of the

Convention is:

i) to establish the facts, and

ii) to state an opinion as to whether the facts found disclose a

breach by the State concerned of its obligations under the

Convention.

19. A schedule setting out the history of the proceedings before the

Commission is attached hereto as Appendix I and the Commission's

decision on the admissibility of the application as Appendix II.

20. The full text of the parties' submissions, together with the

documents lodged as exhibits, are held in the archives of the

Commission.

II. ESTABLISHMENT OF THE FACTS

A. The particular circumstances of the case

1. The seizure of the jewellery pledged to the applicants

21. One of the applicants' clients had taken out loans against

securities in the form of pledged jewellery (valued at approximately

12 million AS) which was deposited in the applicants' safes. Financial

difficulties subsequently prevented the client from repaying the loans

and in 1982 he agreed to the sale of the pledged jewellery by the

applicants in order to fulfil his obligations. The applicants then

commissioned a jeweller in Salzburg to organise a sales exhibition.

22. The sales exhibition was visited by officers of the Customs

Office (Zollamt) of Salzburg who on 10 April 1982 seized

(Beschlagnahme) the jewellery pledged to the second applicant, which

was displayed at the exhibition. On 14 April 1982 the Customs Office

seized the remaining jewellery which still was in the first applicant's

safe. The seizures were made for the purpose of securing evidence

(Beweissicherung) in connection with investigations conducted against

the applicants' client on the suspicion of his having committed

financial offences.

23. The applicants and their client successfully challenged the

seizures before the Constitutional Court (Verfassungsgerichtshof).

24. As regards the seizure of 14 April 1982, the court found by a

decision of 26 November 1982 that Section 89 of the Code of Financial

Offences (Finanzstrafgesetz) had been violated in that the seizure had

been effected without a prior administrative decision, although an

immediate danger (Gefahr in Verzug), justifying a seizure without such

a decision, had not existed. As a consequence the constitutional right

to the inviolability of property had been violated.

25. As regards the seizure of 10 April 1982, the Constitutional

Court, by a decision of 12 June 1984, quashed certain provisions of

Section 25 of the Code of Financial Offences on which it had been

based, finding that these provisions violated the constitutional

principle of equality before the law and lacked the clarity required

by Article 18 of the Federal Constitution (Bundes-Verfassungsgesetz),

in particular as regards the delimitation of the scope of application

of Sections 25 and 89 of the Code.

26. Notwithstanding these decisions, the seized objects were not

returned to the applicants.

2. The institution of criminal proceedings against the applicants'

client

27. On 14 October 1982 the Customs Office in Salzburg reported to the

public prosecutor's office in Salzburg a suspicion of financial

offences (smuggling, evasion of import duties) by the applicants'

client. In this context the Customs Office found that the applicants

were not responsible for careless conduct within the meaning of

Section 17 para. 3 of the Code of Financial Offences.

28. The public prosecutor's office requested the opening of criminal

proceedings before the Regional Criminal Court (Landesgericht für

Strafsachen) of Vienna, where other criminal proceedings against the

applicants' client were already pending.

29. By decisions of 5 and 25 November 1982 the investigating judge

of this court "confirmed" the seizure of the jewellery on the ground

that there was "a grave suspicion of a financial offence".

30. Upon appeal by the applicants' client this decision was in part

confirmed by the Review Chamber (Ratskammer) of the Regional Court on

5 January 1983. It held that the investigating judge's above decisions

constituted new seizures under Sections 98 and 143 of the Code of

Criminal Procedure (Strafprozessordnung); therefore it was irrelevant

that the first seizures by the Customs Office had been found to be

unconstitutional. The Review Chamber ordered the exclusion of certain

pieces of jewellery, but simultaneously issued a preliminary injunction

(einstweilige Verfügung) in respect of these objects in order to secure

the payment of the fines which were expected to be imposed on the

applicants' client. It further held it lawful that the jewellery

continued to be detained for the Regional Court of Vienna by the

Customs Office in Salzburg.

31. The criminal proceedings against the applicants' client

concerning the financial offences at issue were subsequently

transferred to the Regional Court of Salzburg. On 13 May 1983 the

investigating judge of that court ordered the seizure of further

objects which had previously been confiscated by the Customs Office of

Innsbruck. The Review Chamber of the Regional Court of Salzburg

confirmed this decision on 6 and 13 July 1983.

3. Requests for restitution of the jewellery

32. The applicants made repeated requests to the Customs Office and

the courts in order to obtain the restitution of the jewellery.

33. The first requests, made by each of the applicants on

27 April 1982, and their further requests of 14 December 1982 to

recognise that the seized objects had been validly pledged to them,

were dealt with on 11 March 1983. The Customs Office rejected them as

inadmissible, considering that, after the new seizures ordered by the

Regional Court of Vienna, it was no longer competent to deal with the

matter.

34. These decisions were confirmed by the Salzburg Regional

Directorate of Finance (Finanzlandesdirektion, Regional Directorate)

on 6 and 10 May 1983 and by the Administrative Court (Verwaltungs-

gerichtshof) on 18 April 1985. The Administrative Court held, inter

alia, that the delays in the Customs Office's procedure (it had

reported the case to the public prosecutor more than six months after

the initial seizure and had dealt with the applicants' request for

restitution almost a year after it had been made) did not make its

decision unlawful. The investigating judge's decision to order a new

seizure had been given within the statutory time-limit under Section 54

para. 2 of the Code of Financial Offences. It was irrelevant that it

had been partially quashed by the Review Chamber because the Chamber

had at the same time issued a preliminary injunction.

35. On 1 February 1983 the second applicant, being an interested

party (Verfallsbeteiligter) in the criminal proceedings against its

client, requested the Regional Criminal Court of Vienna to restitute

the seized jewellery. On 9 June 1983 the first applicant also made a

request for the restitution of the seized jewellery.

36. On 20 December 1983 the investigating judge of the Salzburg

Regional Court rejected both requests, finding it necessary to await

the final judgment in the case against the applicants' client. He

observed that the final judgment might order the forfeiture of the

seized objects, notwithstanding the fact that they were pledged to the

applicants, if their responsibility for careless conduct (Section 17

para. 3 of the Code of Financial Offences) was established. As to a

possible priority of the applicants' pledge, the investigating judge

referred them to an action (Pfandvorrechtsklage) under the Enforcement

Proceedings Act (Exekutionsordnung).

37. The Review Chamber of the Salzburg Regional Court confirmed this

decision on 18 January 1984.

38. On 5 December 1985 the applicants again requested the restitution

of the seized objects, but the investigating judge, without taking a

formal decision, informed them on 23 April 1986 that these objects were

still needed as evidence.

4. Lifting of the criminal seizure

39. After an indictment had been preferred against the applicants'

client on 27 February 1987 and after they had been informed by the

client's defence counsel that the indictment did not include offences

relating to the seized jewellery, the applicants on 2 April 1987 again

requested the restitution of this jewellery. As no decision had been

taken the applicants repeated their requests on 12 May 1987.

40. Already on 27 February 1987 the public prosecutor had also

requested the Regional Court to return the seized jewellery to the

applicants. However, the Customs Office, consulted under Section 46

para. 3 of the Customs and Excise Act (Zollgesetz), objected on the

ground that the jewellery was needed as security for unsatisfied

customs claims (import duties) in the amount of some 3,5 million AS.

41. On 3 July 1987 the Regional Court lifted the seizure in respect

of the jewellery not covered by the indictment, but at the same time

conferred the power to dispose of this jewellery to the Customs Office.

On 15 July 1987 the Review Chamber of the Regional Court furthermore

lifted the preliminary injunction of 5 January 1983 ordering that the

jewellery affected by this measure should also remain with the Customs

Office for further action.

42. Only two pieces of jewellery pledged to the second applicant

continued to be seized by the court as they were covered by the

indictment against the applicants' client. The indictment of

27 February 1987 was quashed by the Linz Court of Appeal (Oberlandes-

gericht) on 20 May 1987 following objections by the applicants' client.

43. A dispute arose as to whether in view of the value of the

jewellery the criminal proceeding should be referred to the Customs

Office. On 13 July 1988 the Linz Court of Appeal held that the case

still came within the jurisdiction of the courts.

44. On 17 January 1990 a new indictment was preferred against the

applicants' client. The proceedings were eventually discontinued on

8 February 1991 in view of the client's health conditions which made

him unfit to stand trial. On 14 March 1991 the Regional Court of

Salzburg decided to lift the seizure also as regards the remaining two

pieces of jewellery. This decision was taken at the request of the

public prosecutor who saw no reasons for not recognising the

applicant's right of pledge. However, the jewellery was not returned

to the second applicant but, like the other pieces, handed over to the

Customs Office for further action.

5. The customs and object liability proceedings

45. In the customs proceedings, the applicants' client was ordered

by two separate decisions of 16 September 1983, to pay import duties

of AS 585,887 and AS 2,946,081 respectively.

46. On 13 August 1987, in connection with the above decisions in the

criminal case, the Customs Office seized the relevant jewellery and

claimed its object liability (Sachhaftung) for the customs duties under

Section 178 of the Customs and Excise Act. Both applicants were

affected by this measure and filed appeals.

47. On 25 January 1988 the first applicant obtained redress in that

after the Regional Directorate's decision of 18 November 1987 the

objects pledged to it were returned and the object liability lifted by

a decision of the Regional Directorate on 1 March 1990.

48. No decision was taken by the Regional Directorate on the second

applicant's appeal within the statutory time-limit of six months, and

therefore it filed an action for default (Säumnisbeschwerde) with the

Administrative Court on 3 April 1989. After that court had set a time-

limit for the Regional Directorate's decision, the latter rejected the

second applicant's appeal on 25 October 1989.

49. In its decision the Regional Directorate fixed the amount of

object liability (AS 2,621,699). It noted that the decision

prescribing the import duties had become final and that the conditions

for claiming the object liability of the jewellery were therefore met.

This liability was not limited to customs duties in the strict sense,

but also concerned import turnover tax. While object liability arose

ex lege irrespective of the rights of third persons, the Customs

Office's power to claim object liability was nevertheless

discretionary. It had to exercise its discretion having regard to the

criteria laid down in Section 20 of the Federal Code of Taxation

(Bundesabgabenordnung), i.e. in accordance with equity and expediency

having regard to all relevant circumstances. "Equity" meant the

justified interests of the party, and "expediency" the public interest

in the securing of duty. In the present case the discretion had been

correctly exercised, in particular the principle of equity had not been

violated because it appeared from the outset that the second applicant

must have anticipated difficulties in the realisation of its right of

pledge, the value of the pledged objects exceeding by far the amount

of the loans.

50. On 7 December 1989 the second applicant lodged a constitutional

complaint against this decision in which it invoked inter alia

Article 6 of the Convention, Article 1 of Protocol No. 1 and the

principle of equality. On 25 September 1990 the Constitutional Court

refused to deal with the complaint and referred the matter to the

Administrative Court. The latter court rejected the second applicant's

complaint on 14 February 1991.

51. In the meantime, on 11 December 1987, the Customs Office had

ordered the applicants' client to pay import duties also in respect of

some further pieces of jewellery pledged to the second applicant. His

appeal against this decision was rejected by the Regional Directorate

on 26 June 1990.

52. On 28 March 1990 the Customs Office issued a new seizure order

concerning this jewellery claiming object liability in respect of the

second applicant. The latter's appeal against this decision was

rejected by the Regional Directorate on 14 December 1990. The second

applicant complained to the Administrative Court which rejected the

complaint on 24 May 1991.

53. Subsequent negotiations between the second applicant and the

Regional Directorate to come to a settlement of the matter failed. The

Regional Directorate was not prepared to consent to the sale of the

jewellery pending the proceedings before the Administrative Court and

without the second applicant paying the import duties owed by its

client (more than AS 3,000,000). The second applicant, on the other

hand, was not willing to pay these duties.

54. The jewellery is still in the hands of the Customs Office. Since

a new estimation showed that its value was much less than earlier

assumed and that therefore the customs duties prescribed might be

excessive, the second applicant requested a reopening of the customs

proceedings. This request was rejected by two decisions of

25 September 1991. The second applicant's appeals against these

decisions are still pending.

B. Relevant domestic law

1. Forfeiture in criminal proceedings under the Code of Financial

Offences

55. In Austrian criminal law forfeiture is provided for as an

ancillary sanction for certain offences. Relevant provisions are

contained both in the Penal Code (Sections 20 and 26) and in the Code

of Financial Offences (Finanzstrafgesetz).

56. Section 17 para. 1 of the latter Code stipulates that forfeiture

may be pronounced only in the cases where this sanction is specifically

provided for. One of these cases is the offence of indirect tax

evasion (Abgabenhehlerei) under Section 37 of the Code, which was the

basis of the charges against the applicants' client in the present

case.

57. Section 17 paras. 2-6 read as follows:

(German)

"(2) Dem Verfall unterliegen

a) die Sachen, hinsichtlich derer das Finanzvergehen begangen

wurde, samt Umschließungen;

...

(3) Die im Abs. 2 genannten Gegenstände sind für verfallen zu

erklären, wenn sie zur Zeit der Entscheidung im Eigentum oder

Miteigentum des Täters oder eines anderen an der Tat Beteiligten

stehen. Weisen andere Personen ihr Eigentum an den Gegenständen

nach, so ist auf Verfall nur dann zu erkennen, wenn diesen

Personen vorzuwerfen ist, daß sie

a) zumindest in auffallender Sorglosigkeit dazu beigetragen

haben, daß mit diesen Gegenständen das Finanzvergehen begangen

wurde, oder

b) beim Erwerb der Gegenstände die deren Verfall begründenden

Umstände kannten oder aus auffallender Sorglosigkeit nicht

kannten.

Hiebei genügt es, wenn der Vorwurf zwar nicht den Eigentümer des

Gegenstands, aber eine Person trifft, die für den Eigentümer über

den Gegenstand verfügen kann.

...

(5) Wird auf Verfall erkannt, so sind nachgewiesene Pfandrechte

oder Zurückbehaltungsrechte dritter Personen an den für verfallen

erklärten Gegenständen anzuerkennen, wenn diese Personen kein

Vorwurf im Sinne des Abs. 3 trifft.

(6) Das Eigentum an den für verfallen erklärten Gegenständen geht

mit Rechtskraft der Entscheidung auf den Bund über; Rechte

dritter Personen erlöschen, sofern sie nicht gemäß Abs. 5

anerkannt wurden."

(Translation)

"(2) The following are liable to forfeiture

a) Items in respect of which a tax offence has been committed,

together with whatever they are contained in;

...

(3) Items prescribed in paragraph 2 shall be declared forfeited

if, at the time of such decision, they are the property of, or

part-owned by, the offender or any other person involved in the

offence. If any other person established ownership of the items,

forfeiture may only be ordered if

a) at least by conspicuous negligence, he helped bring about the

commission of the offence or

b) when he acquired the items, he was aware of the circumstances

warranting their forfeiture or by conspicuous negligence was

unaware of them.

Negligence for the purposes of paragraphs 3 (a) and (b) means

negligence of the owner or of any person who has the owner's

authority to act in respect of the items.

...

(5) If forfeiture is ordered, claims of third parties arising

from pledge of or liens on the forfeited items shall be

recognised if such parties have not been negligent within the

meaning of paragraph 3.

(6) When the forfeiture order becomes final, ownership of the

forfeited items shall pass to the Federation; any rights of third

parties not recognised under paragraph 5 shall be extinguished."

58. The legal position of third parties accessorily affected by a

measure of forfeiture is regulated in Sections 76 and 122 of the Code

of Financial Offences. In so far as relevant, these provisions read

as follows:

(German)

§ 76

"Nebenbeteiligte sind

a) vom Beschuldigten verschiedene Personen, denen das

Eigentumsrecht oder ein Pfand- oder Zurückbehaltungsrecht an der

verfallsbedrohten Sache zusteht (Verfallsbeteiligte). Verfalls-

beteiligt ist auch, wer ein solches Recht behauptet."

§ 122

"(1) Die Finanzstrafbehörde erster Instanz hat Verfallsbe-

teiligte sowie Haftungsbeteiligte, deren Haftung in Anspruch

genommen werden soll, dem Verfahren zuzuziehen, wenn ihr

Aufenthalt bekannt ist ... ."

(Translation)

Section 76

"Private parties are

a) persons other than the accused who have the right of property,

a right of pledge or a right of retention concerning the object

threatened with forfeiture (parties accessorily affected by

forfeiture). Persons who claim such a right shall also be

regarded as parties accessorily affected."

Section 122

"(1) The administrative tax offences authority of first instance

shall join to the proceedings any parties of known address who

would be accessorily affected by a forfeiture or who are

accessorily liable ... ."

2. Object liability in respect of customs duties

59. Section 178 para. 1 of the Customs and Excise Act (Zollgesetz)

reads as follows:

(German)

"Waren, für die die Zollschuld unbedingt oder bedingt entstanden

ist, haften ohne Rücksicht auf die Rechte anderer Personen für

den auf sie entfallenden Zoll und können aus diesem Grund nach

Maßgabe des § 20 der Bundesabgabenordnung vom Zollamt

beschlagnahmt werden. Die Haftung beginnt mit dem Entstehen und

endet mit dem Erlöschen der Zollschuld."

(Translation)

"Items in respect of which customs duty is or may be payable

shall be liable for such duty regardless of the rights of third

parties and may accordingly be seized by the customs authorities

in pursuance of Section 20 of the Federal Code of Taxation

Procedure. The liability shall begin when the duty falls payable

and shall end when the duty is extinguished."

60. The reference in this provision to Section 20 of the Federal Code

of Taxation Procedure was inserted in 1978 following the quashing of

the earlier version by the Constitutional Court. It was thus made

clear that notwithstanding the fact that object liability arises

directly under the law the customs authorities have a discretionary

power to claim or not to claim object liability in respect of

particular items.

61. Section 20 of the Federal Code of Taxation Procedure reads as

follows:

(German)

"Entscheidungen, die Abgabenbehörden nach ihrem Ermessen zu

treffen haben (Ermessensentscheidungen), müssen sich in den

Grenzen halten, die das Gesetz dem Ermessen zieht. Innerhalb

dieser Grenzen sind Ermessensentscheidungen nach Billigkeit und

Zweckmäßigkeit unter Berücksichtigung aller in Betracht kommenden

Umstände zu treffen."

(Translation)

"Decisions which the tax authorities have to take according to

their discretion (discretionary decisions) must remain within the

limits of discretion circumscribed by the law. Within these

limits, the discretionary decisions have to be made on the basis

of fairness and expediency taking into account all circumstances

which might be relevant."

III. OPINION OF THE COMMISSION

A. Complaint declared admissible

62. The Commission has declared admissible the applicants' complaint

that in connection with both the criminal proceedings against their

client and the subsequent customs proceedings their civil rights have

not been determined within a reasonable time.

B. Points at issue

63. The Commission must accordingly examine:

- whether Article 6 para. 1 (Art. 6-1) of the Convention applied

to the proceedings at issue;

- whether the length of the proceedings complained of exceeded the

"reasonable time" referred to in Article 6 para. 1 (Art. 6-1) of

the Convention.

C. Applicability of Article 6 para. 1 (Art. 6-1) of the Convention

64. Article 6 para. 1 (Art. 6-1) of the Convention includes the

following provision:

"In the determination of his civil rights and obligations ...,

everyone is entitled to a ... hearing within a reasonable time

by [a] ... tribunal ..."

65. The applicants complain on the one hand of criminal proceedings

conducted against their client in which the objects pledged to them

were seized with a view to their possible forfeiture, and on the other

hand of customs proceedings involving their client in which the seizure

was maintained with a view to their object liability for the client's

customs duties.

66. The Commission notes that, although the two above proceedings

were of a different nature and conducted by different authorities, they

were linked to each other: the criminal charges against the client were

brought against him on the basis of the suspicion that he had evaded

the customs duties in question; despite the judicial seizure of the

objects in connection with the criminal proceedings the actual custody

of these objects was left to the customs authorities throughout the

relevant time; the criminal court when lifting the criminal seizure of

these objects did not order their restitution to the applicants, but

left them in the custody of the customs authorities; the latter then

issued new seizure orders for the purpose of asserting their claim to

object liability.

67. The Commission must examine whether each of the proceedings

concerned involved a determination of the applicant's civil rights.

68. It is not contested that the applicants' right of pledge is a

"civil right" within the meaning of Article 6 para. 1 (Art. 6-1) of the

Convention. This civil right is to a certain extent independent of the

property right of the owner of the pledged objects. In the present

case the right of pledge has not been extinguished since the

applicants' underlying financial claims against their client have not

been satisfied to the present day.

69. As regards the criminal proceedings the Commission notes the

applicants' procedural position under the domestic law. They were

recognised as private parties to the criminal proceedings in view of

the possible forfeiture of the objects pledged to them. Private

parties to criminal proceedings can in principle invoke Article 6

para. 1 (Art. 6-1) where they raise a claim of a "civil" nature which

is disputed in these proceedings (cf. mutatis mutandis, Eur. Court

H.R., Moreira de Azevedo judgment of 23 October 1990, Series A no. 189,

pp. 16-17, paras. 63-68). This is not contradicted by the Court's

finding in the AGOSI case that Article 6 para. 1 (Art. 6-1) does not

apply to forfeiture proceedings after evasion of customs duties. In

that case the only question which arose under Article 6 (Art. 6)

concerned the determination of "criminal charges" (cf. judgment of

24 October 1986, Series A no. 108, p. 22, paras. 63-67).

70. The Government submit that in the present case the criminal

proceedings did not involve a direct determination of the applicants'

civil rights because the validity of their right of pledge was not

disputed by the prosecution authorities.

71. The Commission observes, however, that despite this recognition

the competent criminal court expressly reserved the decision on the

forfeiture of the seized objects and the related decision on the

recognition of the applicants' right of pledge under Section 17 para. 5

of the Code of Financial Offences to the final decision. Even though

eventually no such decision was taken, the pledged objects remained

seized for this purpose. Apart from this, in the criminal proceedings

the dispute of the applicants with the prosecution authorities was not

limited to the question of the recognition of the validity of their

right of pledge. It also concerned the further questions whether the

seized objects should be restituted to them at an earlier date, and

whether it was justified to leave the custody of these objects to the

customs authorities both during the criminal proceedings and after the

lifting of the judicial seizure orders. The decisions taken by the

criminal courts on these questions circumscribed the applicants' actual

possibility of making use of their right of pledge and thus determined

their civil rights.

72. Article 6 para. 1 (Art. 6-1) of the Convention was therefore

applicable to the criminal proceedings concerned.

73. As regards the customs proceedings, the Commission recalls that

tax proceedings are normally outside the scope of Article 6 (Art. 6)

of the Convention (cf. e.g. No. 8903/80, X. v. Austria, Dec. 8.7.80,

D.R. 21 p. 246; No. 9908/82, X. v. France, Dec. 4.5.83, D.R. 32

p. 266). However, this does not exclude that in particular

circumstances Article 6 (Art. 6) might be applicable. Thus the

Commission has declared admissible applications concerning tax

proceedings allegedly involving a punitive element which could be

qualified as amounting to a criminal charge within the meaning of

Article 6 (Art. 6) (cf. e.g. No. 11464/85, Von Sydow v. Sweden,

Dec. 12.5.87, D.R. 53 p. 85).

74. The present case does not concern tax obligations of the

applicants. The obligation to pay customs duties was incumbent on

their client, subject to the proviso that the objects in respect of

which the duties were to be levied provided a security to the State's

claim. As these objects had been pledged to the applicants, the object

liability in question conflicted with the applicants' civil right of

pledge.

75. In this context the Commission notes that, while the object

liability in favour of the State's claims arose directly under

Section 178 of the Customs and Excise Act, its operation was

nevertheless not automatic. Since Section 178 refers to Section 20 of

the Federal Code of Taxation Procedure, the customs authorities had a

discretionary power to claim or not to claim object liability, and

according to the principles developed in the case-law were required in

this context to take into account civil rights claims of third parties

such as the applicants who for this purpose also were recognised as

parties to the proceedings. This shows that like the earlier criminal

proceedings the customs proceedings involved a determination of the

question whether and to what extent the applicants could actually make

use of their civil right of pledge. Accordingly Article 6 para. 1

(Art. 6-1) was applicable to these proceedings.

D. Compliance with Article 6 para. 1 (6-1) of the Convention

76. As to the period to be taken into account in the present case,

the Commission notes that the objects pledged to the applicants were

first seized in April 1982 in an administrative procedure for securing

evidence for the criminal proceedings. They were subsequently the

subject of a judicial seizure in those proceedings, effected in view

of a possible forfeiture. When this judicial seizure was lifted, the

objects were not restituted to the applicants, but left in the custody

of the customs authorities which then issued further seizure orders in

view of object liability. The restitution of the objects pledged to

the first applicant was ordered on 25 January 1988, but the claim of

object liability was not revoked until 1 March 1990. The objects

pledged to the second applicant remain seized. Their object liability

was confirmed by final administrative decisions of 25 October 1989 and

14 December 1990 respectively. Complaints' procedures before the

Administrative Court concerning these decisions were concluded on

14 February and 24 May 1991. The subsequent proceedings for the

reopening of the customs case, which are still pending, are not

relevant for the purposes of Article 6 para. 1 (Art. 6-1).

77. Throughout the relevant periods, the applicants contested the

justification of the measures taken in so far as they affected their

right of pledge. This question remained pending before the various

authorities in different forms, from the moment when the applicants

challenged the first administrative seizure orders. The period to be

considered therefore began to run, in the case of both applicants, on

27 April 1982, the date when both applicants first requested the

restitution of the jewellery.

78. As regards the end of the period, the position of the two

applicants is different. The case of the first applicant was

determined on 1 March 1990 when the authorities revoked the claim to

object liability. The case of the second applicant was concluded on

24 May 1991.

79. The proceedings in the first applicant's case therefore lasted

about seven years and ten months, those in the second applicant's case

nine years and one month.

80. The Commission recalls that the reasonableness of proceedings

must be assessed in the light of the particular circumstances of the

case and with the help of the following criteria: the complexity of the

case, the conduct of the parties and the conduct of the authorities

dealing with the case (see Eur. Court H.R., Vernillo judgment of

20 February 1991, Series A no. 198, para. 30).

81. According to the Government, the length of the period in question

is due to the complexity of the case.

82. The Commission notes that the case was a complex one, but this

is not in itself sufficient to explain the length of the proceedings.

83. The Commission further finds that, although the applicants took

various remedies, they did not in any way contribute to the length of

the proceedings. Delays were rather caused by the authorities' conduct

of those proceedings and the behaviour of the applicants' client.

84. In this respect the Commission observes that the criminal

information against the applicants' client was laid by the Customs

Office in October 1982 while an indictment was submitted by the public

prosecutor's office only in February 1987. It is true that during this

period of about four years and four months extensive and difficult

investigations were conducted. The result of these investigations,

however, was that in respect of most of the objects pledged to the

applicants no charges of tax evasion could be brought against their

client. The judicial seizure orders concerning those objects were

therefore lifted in July 1987 and maintained only in respect of two

pieces of jewellery.

85. No satisfactory explanation has been provided as to why despite

the applicants' repeated requests the seizure orders were not lifted

at least partially during the investigation in conformity with the

latter's development concerning the individual items at issue, and why

it took five months between the submission of the indictment and the

lifting of the seizure orders in respect of the objects not covered by

the indictment.

86. The Commission furthermore notes that the Customs Office had

already recognised in October 1982 that the applicants were not

responsible for negligent behaviour within the meaning of Section 17

para. 3 of the Code of Financial Offences, a view shared by the

prosecution in the indictment of February 1987. As the Government

rightly observe, the non-recognition of the applicants' right of pledge

under Section 17 para. 5 of the Code of Financial Offences must have

appeared to be excluded. In these circumstances it is difficult to

understand why the judicial seizure of the pledged objects could not

be lifted earlier.

87. As to the customs proceedings, the Commission notes that they

were conducted simultaneously with the criminal proceedings. Like the

latter they primarily concerned the applicants' client whose behaviour

contributed to the delays. The applicants themselves were not affected

by these proceedings until July 1987. At this time the criminal court

lifted the judicial seizure of the majority of the objects pledged to

the applicants, and ordered, at the request of the customs office, that

this office should keep the objects concerned in its custody pending

further action. A similar measure was taken in March 1991 as regards

the remaining two pieces of jewellery pledged to the second applicant.

88. The Commission cannot examine the customs proceedings as such

before the time when the applicants became parties thereto. However,

the fact that the proceedings had then been pending for a long time is

a relevant consideration for assessing the reasonableness of the length

of the subsequent proceedings. Since the authorities knew the

applicants' important interest in the matter because of their right of

pledge which conflicted with the object liability, they were in the

Commission's opinion under an obligation of special expediency.

Moreover, it has not been shown that object liability could not have

been claimed, in connection with those proceedings, at an earlier date

notwithstanding the existence of simultaneous judicial seizure orders.

If the matter had been addressed in time, the legal questions which

arose in this context could have been solved earlier.

89. The Commission also notes that in the case of the first applicant

the customs authority ordered the restitution of all objects seized in

January 1988, i.e. within a reasonable time after the seizure order of

August 1987. However, the final decision to revoke the order of object

liability was taken by the Regional Directorate more than two years

later, in March 1990. The Government have not provided a sufficient

explanation for this delay which appears excessive.

90. In the parallel case of the second applicant an action for

default was lodged in April 1989 which led to the setting of a time-

limit by the Administrative Court which thus recognised the existence

of an unjustified delay contrary to the domestic law. It is true that

the Regional Directorate then reacted within a reasonable time to the

Administrative Court's order, handing down its decision in

October 1989, and that the subsequent proceedings before the

Constitutional Court and the Administrative Court were each time

terminated without excessive delays.

91. Nevertheless, the Commission finds that in the case of both

applicants there has been a number of unjustified delays both in the

criminal and the customs proceedings for which the State is

responsible. Accordingly the applicants' civil rights have not been

determined within a reasonable time.

E. Conclusion

92. The Commission concludes unanimously that there has been a

violation of Article 6 para. 1 (Art. 6-1) of the Convention.

Secretary to the Commission Acting President of the Commission

(H.C. KRÜGER) (J.A. FROWEIN)

APPENDIX I

HISTORY OF PROCEEDINGS BEFORE THE COMMISSION

Date Item

_________________________________________________________________

29.9.1986 Introduction of the application

19.11.1986 Registration of the application

A. Examination of Admissibility

6.3.1989 Commission's decision to invite the

Government to submit observations on

the admissibility and merits of the

application

29.5.1989 Extension of time-limit at

Government's request

19.6.1989 Government's observations

10.8.1989 Applicants' observations in reply

7.5.1990 Commission's decision to hold an oral

hearing

27.8.1990 Applicants' supplementary observations

10.10.1990 Oral hearing on admissibility and

merits, Commission's decision to

declare the application admissible

B. Examination of the merits

8.11.1990 Commission adopts the text of the

decision and invites the parties to

submit further observations

19.12.1990 Applicants' supplementary observations

7.1.1991 Government's supplementary

observations

12.1.1991 Consideration of the state of

proceedings

22.1.1991 ) Further supplementary observations

1.2.1991 ) by the Government

8.2.1991 Further supplementary observations

by the applicants

5.4.1991 Supplementary information by the

Government

13.4.1991 Commission's consideration of the

state of proceedings

7.8.1991 Supplementary information by the

applicants

11.1.1992 Commission's consideration of the

state of proceedings

12.5.1992 Commission's deliberations on the

merits and final votes

20.5.1992 Adoption of the Report

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R. AND R. v. AUSTRIA

R. AND R. v. AUSTRIA

LEXI