Lexploria

AS TO THE ADMISSIBILITY OF

Application No. 16239/90

by R.

against Sweden

The European Commission of Human Rights sitting in private

on 1 July 1991, the following members being present:

MM. C.A. NØRGAARD, President

J.A. FROWEIN

S. TRECHSEL

E. BUSUTTIL

G. JÖRUNDSSON

A.S. GÖZÜBÜYÜK

A. WEITZEL

J.C. SOYER

H.G. SCHERMERS

H. DANELIUS

Mrs. G.H. THUNE

Sir Basil HALL

MM. F. MARTINEZ

C.L. ROZAKIS

Mrs. J. LIDDY

MM. L. LOUCAIDES

J.-C. GEUS

M.P. PELLONPÄÄ

B. MARXER

Mr. H.C. KRÜGER, Secretary to the Commission

Having regard to Article 25 of the Convention for the

Protection of Human Rights and Fundamental Freedoms;

Having regard to the application introduced on 20 November 1989

by R. against Sweden and registered on 1 March 1990 under

file No. 16239/90;

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

Rules of Procedure of the Commission;

Having deliberated;

Decides as follows:

FACTS

The facts as submitted by the applicant may be summarised as

follows.

The applicant is a Swedish citizen, born in 1947. He resides

at M., Sweden.

The application concerns the introduction in Sweden of new

legislation imposing a compulsory saving during a certain period: the

1989 Act on Temporary Savings (Lag om tillfälligt sparande).

The legislation on temporary savings was passed by the Swedish

Parliament on 8 June 1989 and published on 16 June 1989 as SFS

1989:474 of the Swedish Law Gazette. The Act entered into force on

1 July 1989. On 18 December 1989 and on 25 April 1991 the Act was

amended in some respects.

The essential provisions of the 1989 Act on Temporary

Savings may be summarised as follows.

The legislation originally affected all Swedish taxpayers, but

was not applicable to the State, municipalities (kommuner), county

councils (landstingskommuner) and church parishes (kyrkliga kommuner).

The savings, to be paid to the State together with the income tax,

were calculated at three per cent of the income tax owed by the

taxpayer. The savings were compulsory and applied to the period 1

September 1989 - 31 December 1990. The savings were to be repaid at

the latest on 30 April the third year following the income year, i.e.

in 1992 and 1993, together with an annual interest at the rate of

seven per cent on amounts up to 1.000 SEK (svenska kronor) concerning

the savings relating to the income year of 1989 and with the same

interest on savings relating to the income year of 1990 up to amounts

of 3.000 SEK. On amounts above these sums the interest rate was 3.5

per cent.

According to the travaux préparatoires, the Report of the

Parliamentary Standing Committee on Finance (Finansutskottets

betänkande) 1988/89: Fi U 30, the reasons for introducing the Act on

Temporary Savings were essentially the following:

(translation)

"The Committee has earlier established that the economic

development is worrying and that there is an obvious risk

for a continuous deterioration of [the Swedish]

international competitiveness. The Committee therefore is

of the opinion that steps must be taken in order to cool

down the overheated economy. The steps taken must be of a

temporary character. A public and perceptible squeeze

should, during a limited period of time, cool down the high

temperature, without reducing the growth of production and

employment in the long run.

As an alternative to the Government's proposal for a

temporary increase of the value added tax, different forms

of a temporary compulsory savings system have been proposed.

As has been suggested in these proposals, an appropriate

increase of savings would reduce the space for

consumption and moderate the trend towards increased

inflation. Compared with an increase of the value added

tax, a temporary savings system has the advantage of

not increasing inflation.

...

A necessary requirement for the squeezes needed is that they

must have an immediate effect on the economy. Next to

different kinds of tax increases, a compulsory savings system

would appear to be the most efficient step in this respect.

A temporary savings system does not lead to an increase in

the burden of taxation. The money will be repaid to the savers

within a certain time.

...

To achieve a sufficient effect and to be as neutral as

possible in respect of the policy of a fair distribution,

there should be few exceptions from the compulsory savings;

both individuals and legal persons should accordingly be

included in the system."

On 18 December 1989 the Act on Temporary Savings was changed

(SFS 1989:1033) in that the compulsory savings during the income year

of 1990 only applied to those who had to save more than 1.000 SEK

during that year. Furthermore, savings relating to the income year of

1989 were to be repaid by 30 June 1990 at the latest if the amount

was less than 300 SEK.

According to the relevant travaux préparatoires, the

Government Bill (Regeringens proposition) 1989/90:50, the reasons for

this exemption from compulsory savings, were essentially that it would

have a small effect on the economic squeeze in general, but a

considerable effect for the low income earners with an income below

approximately 100.000 SEK per year, among them retired people, as they

would not have to save. The responsible minister found that this

would give the legislation on savings a more acceptable profile in

respect of the policy of a fairer distribution of income.

On 25 April 1991 the Act on Temporary Savings was again

amended (SFS 1991:184) in respect of repayment: savings relating to

the income year of 1989 were to be repaid by 31 May 1991 at the latest

and the remaining savings by 28 February 1992.

COMPLAINTS

The applicant complains that the compulsory savings under the

1989 Act on Temporary Savings violate his right to peaceful enjoyment

of his possessions as secured by Article 1 of Protocol No. 1 to the

Convention.

THE LAW

The applicant complains that the introduction in 1989 of

the legislation in Sweden concerning the temporary savings constitutes

a breach of Article 1 of Protocol No. 1 (P1-1) to the Convention which

reads:

"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 control the use of property in accordance with the

general interest or to secure the payment of taxes or other

contributions or penalties."

According to the case-law of the European Court of Human

Rights, Article 1 (Art. 1) substance guarantees the right to property.

It comprises "three distinct rules": the first rule, set out in the

first sentence of the first paragraph, is of a general nature and

enunciates the principle of the peaceful enjoyment of property; the

second rule, in the second sentence of the first paragraph, covers

deprivation of possessions and subjects it to certain conditions; the

third rule, stated in the second paragraph, recognises that the

Contracting States are entitled, amongst other things, to control the

use of property by enforcing such laws as they deem necessary in the

general interest. However, these rules are not "distinct" in the

sense of being unconnected: the second and third rules are concerned

with particular instances of interference with the right to peaceful

enjoyment of property and should therefore be construed in the light

of the general principle enunciated in the first rule (Eur. Court

H.R., Tre Traktörer judgment of 7 July 1989, Series A No. 159, pp.

21-22, para. 54, with further references).

In the present case the introduction of the 1989 Act on

Temporary Savings had the effect of forcing taxpayers, including

the applicant, to save amounts corresponding to three per cent of

their income tax and of depriving them of their right to dispose of

this money during a certain period of time. The Commission finds that

this constitutes an interference with the applicant's right to

peaceful enjoyment of his possessions. It considers, however, that

this interference does not fall within the ambit of the second

sentence of the first paragraph, as the savings, although compulsory,

were to be repaid within a certain period of time. Accordingly there

is no deprivation of property within the meaning of Article 1 (Art. 1)

of the Protocol.

The Commission finds that the compulsory savings constituted a

measure of controlling the use of property, to be considered under

the second paragraph of Article 1 (Art. 1), which recognises the right

of the Contracting States to enforce such laws as they deem necessary

for controlling the use of property in accordance with the general

interest. As this provision is to be construed in the light of the

general principle enunciated in the first sentence of the first

paragraph, there must exist a reasonable relationship of

proportionality between the means employed and the aim pursued. In

striking a fair balance between the general interest of the community

and the requirements of the protection of the individual's fundamental

rights, the authorities enjoy a wide margin of appreciation (Eur.

Court. H.R., Allan Jacobsson judgment of 25 October 1989, Series A

No. 163, p. 17, para. 55, with further references).

In the present case, the aim of instituting temporary

compulsory savings was to limit a dangerous trend in the Swedish

economy by reducing consumption and to counteract growing inflation.

The Commission considers this to be a legitimate aim in the general

interest. As regards the proportionality between the interference

with the applicant's property rights and the aim pursued, the

Commission notes that according to the 1989 Act and its amendments the

compulsory savings would not exceed three per cent of the income tax,

would only partly affect those with an income below approximately

100.000 SEK, were limited in time and were to be repaid together with

interest. Having regard to the wide margin of appreciation enjoyed by

the Contracting States, the Commission cannot find that the compulsory

savings by virtue of the 1989 Act were in these circumstances

disproportionate to the aim pursued.

Consequently the interference was justified under the terms of

the second paragraph of Article 1 of Protocol No. 1 (P1-1) to the Convention.

It follows that the application is manifestly ill-founded

within the meaning of Article 27 para. 2 (Art. 27-2) of the Convention.

For these reasons, the Commission by a majority,

DECLARES THE APPLICATION INADMISSIBLE.

Secretary to the Commission President of the Commission

(H.C. KRÜGER) (C.A. NØRGAARD)

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R. v. SWEDEN

R. v. SWEDEN

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