Lexploria

AS TO THE ADMISSIBILITY

Application No. 28411/95

by Ianka RIENER

against Bulgaria

The European Commission of Human Rights (First Chamber) sitting

in private on 12 April 1996, the following members being present:

Mr. C.L. ROZAKIS, President

Mrs. J. LIDDY

MM. E. BUSUTTIL

A. WEITZEL

M.P. PELLONPÄÄ

B. MARXER

B. CONFORTI

N. BRATZA

I. BÉKÉS

E. KONSTANTINOV

G. RESS

A. PERENIC

C. BÎRSAN

K. HERNDL

Mrs. M.F. BUQUICCHIO, Secretary to the Chamber

Having regard to Article 25 of the Convention for the Protection

of Human Rights and Fundamental Freedoms;

Having regard to the application introduced on 6 April 1995 by

Ianka RIENER against Bulgaria and registered on 1 September 1995 under

file No. 28411/95;

Having regard to the report provided for in Rule 47 of the Rules

of Procedure of the Commission;

Having deliberated;

Decides as follows:

THE FACTS

The facts of the case as submitted by the applicant may be

summarised as follows.

The applicant, born in 1946 in Bulgaria, has her permanent

address in Vienna. On an unspecified date she obtained Austrian

nationality. The fact whether she remained also a Bulgarian citizen

is disputed (see below III).

Particular circumstances of the case

I.

The applicant is a co-owner and the commercial director of "I.

and G. Riener", a limited liability company registered in Austria ("the

Austrian company"). On 24 January 1991 she also registered under her

own name, with the Bulgarian Chamber of Commerce and Industry (BTPP),

as a foreigner (chuzhdestranno phizichesko litse) conducting economic

activities in Bulgaria.

Since 1990 the applicant, her husband and employees of their

company in Vienna were involved in the execution of sale-purchase

contracts, between the company and Bulgarian companies and merchants,

for the import of coffee. The contracts provided that the seller had

to deliver a certain quantity of coffee at a storage house in Sofia and

that import duties and fees were included in the price. The contracts

did not specify which party was to pay the excise tax.

The applicant submitted customs declarations for each load of

coffee which entered the country. Most of these declarations stated

that the exporter was "firm Riener, Vienna, Austria" and that the

importer was "firm Riener, Sofia, Bulgaria". The declarations were

signed by the applicant and most of them were stamped with the seal of

the Austrian company.

On 1 July 1992 the Slatina district fiscal authority (DS Slatina)

issued Order No. 54, thereby imposing on the applicant, in her capacity

as a foreign physical person conducting business in Bulgaria, the

payment of 26,494,582 leva of unpaid excise tax and 4,104,925 leva of

interest, due for the period of time since the tax had become payable,

under Section 1 of the Law on Interest Due on Taxes, Fees and Other

Similar State Claims (Zakon za lihvite varhu danatsi, taksi i drugi

podobni darzhavni vzemania) (see below Relevant domestic law). The

decision stated inter alia that, since the applicant had failed to

present her accounting books, the assessment was based on an analysis

of her customs declarations.

On 10 July 1992 the applicant appealed against Order No. 54 to

the Director of the Sofia regional fiscal authority (Stolichno danachno

upravlenie) stating that she did not owe taxes. The appeal was

dismissed on 20 August 1992.

On 12 November 1992 the applicant appealed against the

administrative fiscal decisions to the Sofia Regional Court (SGS).

In her submissions she stated inter alia that importers, within the

meaning of the fiscal law, were the Bulgarian companies, the buyers,

whereas she was only the "supplier" of the coffee. Therefore, the

excise tax had to be levied on the buyers. Also, the fiscal

authorities bore the burden of proof in such matters and she was not

obliged to submit her accounting books. Moreover, the applicant never

imported coffee in her personal capacity as a foreigner registered with

the Bulgarian Chamber of Commerce and Industry. All imports were

effected through her company registered in Austria, whose name and

address were inscribed in the sale-purchase contracts and in the

invoices. Therefore, the excise tax was imposed on the wrong person.

On 7 April 1993 the Court dismissed the appeal. The judgment

stated inter alia that the customs declarations signed by the applicant

always contained, in the space provided for the name of the importer,

a reference to the applicant's registration as a foreigner conducting

business in Bulgaria. Thus, the address was always that of the

applicant in Sofia and the statistical company number (EKPOU) was

always that of her registration with the Bulgarian Chamber of Commerce

and Industry. The fact that her name was inscribed in different

manners, in some documents thus resembling the Austrian company's name,

and that the Austrian company's seal had been used in some of the

declarations, could not affect this conclusion. Furthermore, under the

law the excise tax had to be paid by the importer. The importer was

always free to make contractual arrangements to be reimbursed by the

buyers, but this could not affect the existing fiscal obligation.

On 26 April 1993 the applicant submitted to the Supreme Court

(Varhoven sad) a petition for review of the Regional Court's judgment.

She stated inter alia that under contract law goods which are

identified in the sale-purchase contract become the property of the

buyer as from the date of the contract. It followed that, in the

particular situation, only the buyers could be considered importers of

the coffee. Alternatively, the applicant asserted that the importer

was the Austrian company and that she was merely its representative.

On 7 October 1994 the Supreme Court dismissed the petition as the

conclusions of the Regional Court had been correct.

In a dissenting opinion Justice Kostova stated, inter alia, that

the question who had been the importer had to be decided based on an

analysis of the employed commercial scheme.

II.

On 26 February 1991 on an unspecified ground representatives of

the fiscal authorities searched the applicant's office in Sofia and

seised documents and money. In May 1991 criminal proceedings were

instituted against the applicant and against three other merchants on

suspicion of having contravened Sections 250 and 351 of the Penal Code

(Nakazatelen kodeks), which concerned respectively violations of the

currency exchange regime and selling alimentary products in breach of

the sanitary requirements. In August 1991 an investigating judge

conducted a search in the applicant's office and confiscated documents

and money which, according to the applicant, belonged to the Austrian

company. The criminal proceedings were terminated on 14 October 1992

as no criminal acts had been established.

On 22 July 1992 the applicant was informed by the State Savings

Bank (DSK) that the monies in a bank account, which allegedly belonged

to the Austrian company, were attached by order of the fiscal

authorities.

On 26 January 1993 the Sofia fiscal authority sent a letter,

addressed to "Ianka and Gunter Riener" at the applicant's Sofia

address. The letter stated that, based on the relevant legal

provisions, the authority had attached certain monies as a security for

the unpaid excise tax. These were apparently the sums seized during

the searches in the applicant's office in 1991.

On unspecified dates similar attachments were imposed on monies

in other bank accounts, which allegedly belonged to the Austrian

company. The total amount thus attached reached about 80,000 USD.

On unspecified dates the monies attached were seized by the fiscal

authorities.

The applicant and the Austrian company apparently have not

challenged the attachments and the seizures as provided for under the

Law on the Collection of State Claims (Zakon za sabirane na darzhavnite

vzemania) and the Civil Procedure Code (GKP) (see below Relevant

domestic law).

III.

On 4 April 1995 the Bulgarian border control authorities

confiscated the applicant's Austrian passport when she attempted to

leave Bulgaria and to enter Greece. The officers explained orally that

there was a prohibition imposed on her against leaving the country but

did not provide further details. They issued her with a certificate

stating that her Austrian passport was confiscated without any mention

of the grounds therefor.

On 13 April 1995 the applicant sent a telegram to the Directorate

of the Police (DNP) asking for the return of her Austrian passport and

for explanation. On 17 and on 19 April 1995 she repeated her request.

On 20 April 1995 the Directorate of the Police sent a letter to

the applicant stating that it had imposed on her a prohibition against

leaving the country under Section 29(1)(v) of the Law on the Sojourn

of Aliens (Zakon za prebivavane na chuzhdentsite ("the Aliens Law")

(see below Relevant domestic law). This measure had been taken upon

the request of the Sofia fiscal authority and was based on the

applicant's obligation to pay 26,499,582 leva, as confirmed by the

Supreme Court's decision of 7 October 1994.

On 26 April 1995 the applicant sent a letter to the Chief Public

Prosecutor (Glaven prokuror) in which she stated, inter alia:

"Following the steps undertaken by me before the Ministry

of Justice and the Ministry of Foreign Affairs for relinquishing

my Bulgarian citizenship, I was informed, through the Consular

service ... that in the opinion of those two Ministries, I was

still a Bulgarian citizen...

I would ask you to explain why measures under the [Aliens

Law] are imposed on a Bulgarian citizen and whether this is

lawful."

On 19 May 1995 the applicant sent another telegram to the

Directorate of the police requesting information as regards the date,

number and type of the administrative order imposing on her a

prohibition against leaving the country and asking which administrative

organ had issued the order.

On 26 May 1995 the applicant submitted to the Ministry of the

Interior (MVR) an appeal under the Aliens Law against the prohibition

from leaving the country. She stated that the measure was unlawful as

she was a Bulgarian citizen. She enclosed a copy of a letter of

28 April 1995 sent to her by an administrative authority at the

Ministry of the Interior, which allegedly certified that she was a

Bulgarian citizen.

On 22 June 1995 the Ministry of the Interior sent a letter to the

applicant which stated, inter alia:

"You have assumed Austrian citizenship in breach of Section

16 of the Law on Bulgarian Citizenship (Zakon za balgarskoto

grazhdanstvo), without relinquishing Bulgarian citizenship.

Therefore, the imposition of a restriction on leaving the country

under Section 7 (e) of the Law on the Passports for Travelling

Abroad (Zakon za zadgranichnite pasporti) and of a prohibition

against leaving under Section 29(1)(v) of the [Aliens Law] is

legitimate.

The above has been done based on the request of the Sofia

fiscal authority dated 7 March 1995 and based on the judicial

execution order (izpalnitelen list) issued in civil case No.

565/1992.

Under Section 33 of the Law on Administrative Procedure

(ZAP) you can appeal against the order imposing the prohibition

against leaving Bulgaria."

On 28 June 1995 the applicant submitted an appeal to the Sofia

Regional Court. She stated that the confiscation of her Austrian

passport was unlawful as she had not been given a copy of any order

authorising such an act. Furthermore, she has a second, Bulgarian,

nationality and measures under Section 29 of the Aliens Law could not

be applied against her. In any event, the authorities had an adequate

security for the payment of the excise tax as they had attached funds

of the Austrian company worth 80,000 USD (at the pertinent time, about

5,300,000 leva). Insofar as Section 7 (e) of the Law on the Passports

for Travelling Abroad had been invoked, this provision concerned the

possibility to refuse the issuance of, or to confiscate, a Bulgarian

passport, not an Austrian one.

According to the applicant, this appeal has not been examined by

the Court.

Relevant domestic law

1. The Law on Interest Due on Taxes, Fees and Other Similar State

Claims provides, insofar as relevant:

"Taxes, fees ... and other similar state claims, which have

not been paid on time, which have not been withheld, or which

have been withheld but have not been transferred on time, shall

be collected with a daily interest rate of 1/360 of the basic

interest rate, as in force at the relevant time, plus 0.05%."

2. The Law on the Collections of State Claims, as in force at

the time of the events at issue, provided for attachments,

public sales and seizures of the debtor's property as means for

collection of a debt. There is no possibility for

transformation of a debt into a prison term or other penalty.

Sections 27 and 28 provided that the imposed measures were

subject to appeal to the courts. In this respect the Civil

Procedure Code applied.

3. Section 35(1) of the Bulgarian Constitution provides as

follows.

"Everyone shall have the right to choose freely his place

of residence, the right to freedom of movement within the

territory of the country and the right to leave the country.

[These] right[s] may be subject to restrictions provided for

only by act of Parliament, in the interest of national security,

for the protection of public health and the rights and freedoms

of others."

4. The Law on the Sojourn of Aliens ("the Aliens Law"),

insofar as relevant, provides as follows:

Section 3

"An alien, within the meaning of this Law, shall be every

person who is not a Bulgarian citizen, but is a citizen of

another country or has no citizenship."

Section 29

"(1) An alien shall not be allowed to leave the country

whenever it has been established that: ...

(v) he owes the State the payment of a fine or

another pecuniary obligation;

(2) The alien may be authorised by the competent state

organ to leave the country if there are guarantees that he will

fulfil his obligations under subpara ... (v) or if he has

deposited a security ..."

5. The Law on Bulgarian Citizenship provides in its Section 16 that

a Bulgarian citizen can assume another citizenship only after having

relinquished Bulgarian nationality. However, this Law does not provide

for an automatic loss of Bulgarian citizenship, as it requires, in its

Section 27, a formal decision in every case.

6. The Law on the Passports for Travelling Abroad provides that a

Bulgarian citizen may be refused the issuance of a Bulgarian passport,

or his Bulgarian passport may be confiscated, inter alia, if he or she

has "significant pecuniary obligations to the State".

7. Sections 33 and 34 of the Law on Administrative Procedure provide

that all administrative acts, except those specifically excluded by

Section 34 and by other acts of Parliament, can be appealed against

before the courts.

COMPLAINTS

1. The applicant complains under Article 6 paras. 1 and 3 of the

Convention that the tax proceedings were unfair, that her defence

rights were breached and that the judges were partial and did not

decide within a reasonable time.

2. The applicant complains under Article 1 of Protocol No. 1 to the

Convention that the authorities imposed on her arbitrarily the payment

of taxes which she did not owe as she had always acted only as a

representative of the Austrian company, not in her personal capacity.

Furthermore, the attachments and the seizures imposed on bank accounts

and other property of the Austrian company were arbitrary because,

according to the court decisions, the obligation to pay was hers and

not of the Austrian company. Moreover, the actions of the authorities

as a whole ruined her and the Austrian company's business and, contrary

to Article 14 of the Convention, there has been discrimination on the

grounds of her Austrian nationality.

The events in 1991, when the authorities seised some documents

and money from the applicant's office, were also in breach of Article

1 of Protocol no. 1 and Article 8 of the Convention.

3. The applicant also complains under Article 8 of the Convention

of the confiscation of her Austrian passport and of the prohibition

imposed on her from leaving Bulgaria. This was an interference with

her private life and also with her family life, as she could not join

her husband in Austria. This interference was unlawful because she was

never served with an official order and because the authorities acted

in complete disregard of any legal procedure. The prohibition against

leaving the country even amounted to a house arrest and was contrary

to Article 5 of the Convention.

4. The applicant alleges a breach of Articles 6 and 13 in that most

of her telegrams and petitions to various institutions concerning the

confiscation of her Austrian passport remained unanswered and that her

appeal to the Sofia Regional Court has not been examined yet.

THE LAW

1. The applicant complains of the actions of the fiscal authorities,

of the unfairness of the tax proceedings in her case and of the

confiscation of her Austrian passport.

The Commission has first examined its competence ratione temporis

in the present case.

The Commission recalls that the Convention entered into force in

respect of Bulgaria on 7 September 1992, and that in accordance with

the generally recognised principles of international law, the

Commission is not competent to examine complaints against violations

of the Convention which have occurred by virtue of acts, facts or

decisions prior to that date.

Therefore, the Commission finds that the applicant's complaints

about the searches and seizures in her office in 1991 and about all

other events which have occurred prior to 7 September 1992 fall outside

its competence ratione temporis and have to be rejected under Article

27 para. 2 (Art. 27-2) of the Convention.

2. The applicant complains under Article 6 paras. 1 and 3

(Art. 6-1, 6-3) of the Convention of the alleged unfairness of the tax

proceedings.

The Commission recalls its long-established case-law to the

effect that civil rights and obligations are not determined by

assessments to tax (see, for example, No. 13013/87, Dec. 14.12.88, D.R.

58, pp. 163, 189, and No. 11189/84, Dec. 11.12.86, D.R. 50, pp. 121,

140, and the further cases referred to there).

Also, in connection with the applicability of Article 6 (Art. 6)

in the field of taxation in the present case, the Commission recalls

that the criteria in ascertaining whether a "criminal charge" is at

stake include the nature of the matter in domestic law, the nature of

the "offence", and the severity of the "penalty" (see Appl. No.

19380/92, Benham v. the United Kingdom, Comm. Report 29.11.94, with

reference to, inter alia, Eur. Court H.R., Bendenoun judgment of

24 February 1994, Series A no. 284, pp. 19, 20, paras. 45 - 47). The

Commission has considered that tax sanctions of 30% and 50% of the

amount due - imposed by the French revenue under Article 1729 of the

Tax Code for the tax offence ("infraction fiscale") of displaying bad

faith - were penalties the imposition of which attracted the guarantees

of Article 6 (Art. 6) of the Convention (cf. also Appl. No. 18656/91,

Dec. 1.12.92, unpublished). However, a 10% surcharge imposed

automatically, in addition to costs, because the liability to tax has

not been met when it was due, did not amount to a criminal charge as

it was not imposed for anything which is assimilable to the concept of

"wilful refusal or culpable neglect" or to the concept of "displaying

bad faith". Another criterion was that neither the liability to the

charge nor the surcharge could be converted into a term of imprisonment

(Appl. No. 25373/94, Dec. 29.11.95, unpublished).

In the present case the Commission notes that the proceedings

before the fiscal authorities and before the courts concerned the

determination of the applicant's obligation to pay excise tax. They

did not, therefore, concern the determination of the applicant's civil

obligations within the meaning of Article 6 (Art. 6) of the Convention.

It is true that the applicant was ordered to pay also interest

on the principal amount due. However, this was an interest payable on

a per day basis for the period of time since the applicant had become

liable to pay excise tax and consisting of the basic interest rate in

the country increased by a surcharge of only 0.05%. Moreover, the

interest accrued automatically, on all late payments due to the State,

and regardless of the reasons for the failure to pay on time. It was

not a fine under domestic law and its payment was enforceable only

through attachments, public sales and seizures of the debtor's

property. Therefore, the proceedings at issue did not concern the

determination of a criminal charge within the meaning of Article 6

(Art. 6) of the Convention.

It follows that the proceedings at issue did not fall within the

scope of Article 6 (Art. 6) of the Convention and that, therefore, this

part of the application has to be rejected as being incompatible

ratione materiae with the provisions of the Convention within the

meaning of Article 27 para. 2 (Art. 27-2).

3. The applicant complains under Article 1 of Protocol No. 1 (P1-1)

taken alone and in conjunction with Article 14 (P1-1+14) that the

authorities imposed on her arbitrarily the payment of taxes, that

property of the Austrian company was seized, and that the actions of

the authorities as a whole ruined her and the Austrian company's

business.

Article 1 of Protocol No. 1 (P1-1) to the Convention, insofar as

relevant, provides 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 ... secure the payment of taxes ..."

The Commission recalls the Convention organs' case-law according

to which taxation is an interference with the right guaranteed by

Article 1 of Protocol No. 1 (P1-1), but that this interference is in

principle justified according to the second paragraph of that Article

(P1-2). An interference is justified if it is lawful and if it has

achieved a "fair balance" between the demands of the community's

general interests and the requirements of the protection of the

individual's fundamental rights (Appl. No. 10653/83, Dec. 6.5.85, D.R.

42, p. 224; Appl. No. 11089/84, Dec. 11.11.86, D.R. 49, p. 181; Eur.

Court H.R., Hentrich judgment of 22 September 1994, Series A no. 296-A,

p. 19, paras. 40 -42; Air Canada judgment of 5 May 1995, Series A no.

316, para. 36).

The Commission notes that, by decisions of the fiscal authorities

and of the courts, the applicant was held responsible for the payment

of excise tax. The decisions were based on the relevant provisions of

the Bulgarian substantive and procedural tax law. Furthermore, the

Commission notes that, contrary to the applicant's contention that

they were arbitrary and therefore unlawful, the decisions contained

analysis of the relevant issues and evidence and addressed the

applicant's arguments.

Therefore, the Commission finds that the decisions for the

payment of excise tax in the applicant's case constituted an

interference with her rights under Article 1 of Protocol No. 1 (P1-1)

to the Convention which was justified under the second paragraph of

this provision.

Insofar as the applicant invokes Article 14 (Art. 14) of the

Convention, the Commission does not find any indication that the

payment of excise tax was imposed on the applicant because she was an

Austrian national.

Finally, the Commission finds that, insofar as the applicant may

be understood as complaining on behalf of the Austrian company that its

assets were seised by the authorities, and assuming that the applicant

can be considered as its representative before the Commission, the

Austrian company has not exhausted the domestic remedies available to

it under Bulgarian law as it has not instituted any proceedings against

the attachments and the seizures of its property.

It follows that this part of the application is manifestly ill-

founded and has to be rejected under Article 27 para. 2 (Art. 27-2) of

the Convention.

4. The applicant complains under Articles 5 and 8 (Art. 5, 8) of the

Convention of the confiscation of her Austrian passport and of the

prohibition against leaving Bulgaria.

Insofar as the applicant invokes Article 5 (Art. 5) of the

Convention, the Commission recalls that this provision concerns

deprivation of liberty and is not applicable in the present case (cf.

Appl. No. 8988/80, Dec. 10.3.81, D.R. 24, pp. 198, 201).

The Commission has, therefore, examined the applicant's complaint

of the confiscation of her passport and of the prohibition against

leaving Bulgaria under Article 8 (Art. 8) of the Convention.

The Commission considers that it cannot, on the basis of the

file, determine the admissibility of the above complaint and that it

is therefore necessary, in accordance with Rule 48 para. 2 (b) of the

Rules of Procedure, to give notice of these complaints to the

respondent Government.

5. The applicant complains that the authorities did not deal

properly with her complaints against the confiscation of her passport

and against the prohibition against leaving Bulgaria and that her

appeal before the Sofia Regional Court has not been examined. She

invokes Articles 6 and 13 (Art. 6, 13) of the Convention.

The Commission considers that it cannot, on the basis of the

file, determine the admissibility of the above complaint and that it

is therefore necessary, in accordance with Rule 48 para. 2 (b) of the

Rules of Procedure, to give notice of these complaints to the

respondent Government.

For these reasons, the Commission, unanimously,

DECIDES TO ADJOURN the examination of the applicant's complaints

of the confiscation of her passport, of the prohibition against leaving

Bulgaria and of the alleged lack of an effective remedy in this

respect;

DECLARES THE REMAINDER OF THE APPLICATION INADMISSIBLE.

Secretary to the First Chamber President of the First Chamber

(M.F. BUQUICCHIO) (C.L. ROZAKIS)

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RIENER v. BULGARIA

RIENER v. BULGARIA

LEXI