AS TO THE ADMISSIBILITY OF

                      Application No. 12593/86

                      by R. & R.

                      against Austria

        The European Commission of Human Rights sitting in private

on 10 October 1990, the following members being present:

             MM.  J. A. FROWEIN, Acting President

                  F. ERMACORA

                  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.  L. LOUCAIDES

                  J.-C. GEUS

                  A.V. ALMEIDA RIBEIRO

                  M.P. PELLONPÄÄ

             Mr.  J. RAYMOND, Deputy 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 29 September 1986

by R. and R. against Austria and registered on 19 November 1986 under

file No. 12593/86;

        Having regard to:

      - the Commission's decision of 6 March 1989 to bring the

        application to the notice of the respondent Government

        and invite them to submit written observations on its

        admissibility and merits;

      - the observations submitted by the respondent Government on

        19 June 1989 and the observations in reply submitted by the

        applicants on 10 August 1989;

      - the applicants' supplementary observations of 23 April

        and 27 August 1990;

      - the parties' oral submissions at the hearing on 10 October 1990;

        Having deliberated;

        Decides as follows:

THE FACTS

        The applicants are two banks established as co-operatives

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

Rechtsanwalt Dr. Herwig Liebscher of Salzburg.

        The facts submitted by the parties may be summarised as

follows:

        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.  It 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.

        The applicants and their client successfully challenged the

seizures before the Constitutional Court (Verfassungsgerichtshof).  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.  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.

       Notwithstanding these decisions, the seized objects were not

returned to the applicants.  On 14 October 1982 the Customs Office in

Salzburg reported a suspicion of financial offences (smuggling,

evasion of import duties) by the applicants' client to the public

prosecutor's office in Salzburg.  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.  The public prosecutor's office then 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.  By

decisions of 5 and 25 November 1982 an investigating judge of this

Court "confirmed" the seizure of the jewellery on the ground that

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

        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.

        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 on 6 and 13 July 1983 confirmed this decision.

        The applicants made repeated requests to the Customs Office

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

        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 not dealt with until 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.  These decisions were confirmed by the Salzburg

Regional Directorate of Finance (Finanzlandesdirektion, decisions of

6 and 10 May 1983) and by the Administrative Court (Verwaltungsgerichts-

hof).  On 18 April 1985 the Administrative Court held, inter alia,

that the delays in the Customs Office's procedure (the fact that it

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

after the initial seizure and that it 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, and the

fact that it had been partially quashed by the Review Chamber was

irrelevant because the Chamber had at the same time issued a

preliminary injunction.

        On 1 February 1983 the second applicant, being an interested

party (Verfallsbeteiligter) in the criminal proceedings against its

client, made a request to 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.  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).  The Review Chamber of the Salzburg Regional

Court confirmed this decision on 18 January 1984.

        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.

        As the applicants thus could not realise their claims by the

sale of the jewellery pledged to them, they brought a civil action against

their client for payment of bills of exchange (Wechselzahlungsauftrag)

in the amount of the sums due to them (some 7,3 million AS plus

interest in the case of the first applicant, and some 9 million AS

plus interest in the case of the second applicant).  The action was

allowed by the Regional Court of Salzburg on 1 October 1985, but as

the applicants' client had in the meantime lost his property the

applicants refrained from introducing enforcement proceedings.

        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 second applicant on 2 April 1987

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

been taken the second applicant repeated this request on 12 May 1987.

        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.

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.

        Only two pieces of jewellery 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 (Oberlandesgericht) on 20 May 1987 following

objections by the applicants' client and the case was referred back to

the investigating judge.  On 1 June 1988 the Review Chamber of the

Salzburg Regional Court decided to refer the case to the Customs

Office since it considered that the courts were no longer competent

having regard to the value of the objects concerned by the

proceedings.  However, on 13 July 1988 this decision was quashed by

the Linz Court of Appeal at the request of the public prosecutor.  It

noted an error in the assessment of the relevant value, which was in

fact slightly more than 200,000 AS.  Consequently the case still came

within the jurisdiction of the courts.  On 17 January 1990 a new

indictment was preferred against the applicants' client.  The trial

against him has not yet taken place.

        In the customs proceedings, the applicants' client had been

ordered on 16 September 1983 to pay import duties in the amount of

AS 2,946,081.  His appeal against this decision was rejected by the

Customs Office on 9 March 1988 and by the Regional Directorate of

Finance on 4 October 1989.  In a further decision of 24 July 1985 he

had been ordered to pay import duties of AS 1,360,507.  The latter

decision had apparently also become final.

        On 13 August 1987, the Customs Office seized the pledged

jewellery (which it still detained) as security for the above customs

duties under Section 178 of the Customs and Excise Act (Sachhaftungs-

bescheid mit Beschlagnahmeanordnung).  Both applicants appealed

against the relevant decisions.  However, as no decision was taken by

the Regional Directorate of Finance within the statutory time limit of

six months, the second applicant on 3 April 1989 filed an action for

default (Säumnisbeschwerde) with the Administrative Court.  That Court

set a time limit for the Regional Directorate's decision.

        On 25 October 1989, the Regional Directorate rejected the

second applicant's appeal subject to a rectification concerning the

amount of the import duties claimed in respect of the jewellery

concerned (2,621,699 AS instead of 2,521,683 AS).  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 Procedure (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 that from the

outset 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.

        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 and Article 1 of Protocol No. 1

and the principle of equality.  The Constitutional Court has not yet

decided on this complaint.

        The first applicant also filed an appeal against the Customs

Office's decision to claim object liability.  This appeal was allowed

by the Regional Directorate of Finance on 1 March 1990.  It found that

regarding the relevant items of jewellery the conditions of object

liability were not met in respect of this applicant.  On 28 March 1990

the Customs Office thereupon issued a new seizure order claiming the

object liability in respect of the second applicant.

COMPLAINTS

        The applicants claim that Article 6 of the Convention was

applicable to them as interested parties to the criminal proceedings

against their client.  For these proceedings could lead to a decision

declaring the seized objects forfeited under Section 17 para. 5 of the

Code of Financial Offences despite their being pledged to the

applicants, if the applicants' responsibility (careless conduct within

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

was established.  The applicants observe that such a responsibility

had been ruled out in the Customs Office's report to the public

prosecutor of 14 October 1982.

        The applicants claim that under Article 6 para. 1 of the

Convention they were entitled to a determination of the case within a

reasonable time, and that this requirement was not respected as

the criminal proceedings against their client, which had grave

financial repercussions for them, remained pending before the Austrian

courts from November 1982 until the release of the jewellery in

July 1987.  Even after the latter date the seized objects have not

been returned to them as they were newly seized in connection with

the customs proceedings.  The applicants claim that the latter

proceedings, which are still pending, also involve a determination of

their civil rights and that in this respect they must be regarded as a

prolongation of the earlier criminal proceedings.

PROCEEDINGS

        The application was introduced on 29 September 1986 and

registered on 19 November 1986.  On 6 March 1989 the Commission

decided to bring the application to the notice of the respondent

Government and to invite them, pursuant to Rule 42 para. 2 (b) of the

Rules of Procedure (former version), to submit before 19 May 1989

observations in writing on the admissibility and merits of the

application.

        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.

        On 23 April 1990 the applicants submitted information on the

further development of the domestic proceedings.

        On 7 May 1990 the Commission decided to invite the parties,

pursuant to Rule 42 para. 3 (b) of the Rules of Procedure (former

version), to submit further observations orally at a hearing on the

admissibility and merits of the case.

        On 27 August 1990 the applicants submitted supplementary

written observations in preparation of the hearing.

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

represented as follows: the Government by their Agent, Ambassador

Dr.  Helmut Türk of the Federal Ministry of Foreign Affairs, who was

assisted by Ministerialrat Dr.  Wolf Okresek of the Federal Chancellery

and Staatsanwalt Dr.  Irene Gartner of the Federal Ministry of Justice;

the applicants by Rechtsanwalt Dr.  Christoph Liebscher of Salzburg.

THE LAW

        The applicants allege a violation of Article 6 para. 1

(Art. 6-1) of the Convention because of the length of proceedings

bearing on the seizure of objects which had been pledged to them by

their client.

        The first sentence of Article 6 para. 1 (Art. 6-1) reads as follows:

           "In the determination of his civil rights and

            obligations or of any criminal charge against him,

            everyone is entitled to a fair and public hearing

            within a reasonable time by an independent and

            impartial tribunal established by law."

        The applicants originally invoked this provision claiming that

no decision on their civil rights was taken within a reasonable time in

the criminal proceedings against their client in which the objects

pledged to them were threatened with forfeiture.  More recently, the

applicants have extended their complaint to the customs proceedings

taken against their client in which the objects in question were

seized again after the seizure pronounced in the criminal proceedings

had been lifted.  The applicants claim that their civil rights

continue to be affected by this measure.

        The Government submit that the Commission's examination must

be limited to the applicants' original complaint which concerned

exclusively the criminal proceedings against their client.  While

admitting that the applicants' right of pledge is a civil right within

the meaning of Article 6 para. 1 (Art. 6-1), the Government contend

that this civil right could not be directly affected by the criminal

proceedings in question for the following reasons.

        First, it was a subsidiary right depending on the continued

existence of the underlying financial claim which the applicants could

have satisfied also by other means, in particular by taking

enforcement measures against their client.  They had obtained orders

for the payment of bills of exchange which their client had given to

them as an additional security.  As they failed to take enforcement

proceedings on the basis of these orders the applicants in this

respect failed to exhaust the domestic remedies in conformity with

Article 26 (Art. 26) of the Convention.

        Secondly, the Government note the applicants' submission

that the Customs Office had not found that they were responsible for

careless conduct within the meaning of Section 17 para. 3 of the Code

of Financial Offences.  The applicants' right of pledge would

consequently have had to be recognised under Section 17 para. 5 of

that Code, irrespective of the outcome of the criminal proceedings

against their client.  Even if they had not been able to assert their

claim in the criminal proceedings, a civil action against the State

would have been open to them within 30 years after a final declaration

of forfeiture.  Thus in the present case forfeiture was only a

theoretical possibility.  As the conditions of Section 17 para. 3 of

the Code of Financial Offences were not met, the applicants were

at no risk of losing their rights.  In these circumstances the

proceedings did not actually involve a determination of their civil

rights and obligations.

        Finally the Government submit that even if the criminal

proceedings involved a determination of civil rights, their length was

justified by the volume and complexity of the issues which had to be

investigated.

        The Commission finds that both the criminal proceedings and

the customs proceedings may have involved a determination of the

applicants' civil rights in that a decision had to be taken on the

applicants' right of pledge.  While that right was subsidiary in the

sense that it depended on the continued existence of the underlying

financial claim, there is no indication that this claim had been

satisfied and that the right of pledge had thereby lost its basis.

        The Government's submission that the claim might have been

satisfied by other means is contested by the applicants, who point out

that their client had lost his property and that their securities

would have been diminished by any decision not to recognise their

right of pledge.  The Commission therefore finds that the applicants

were not required under Article 26 (Art. 26) of the Convention to

exhaust the remedy indicated by the Government, namely to take

enforcement proceedings against their client on the basis of the order

for the payment of the bills of exchange which he had given to the

applicants as an additional security.

        The Commission further accepts that in the criminal proceedings

the objects pledged to the applicants risked to be declared forfeited.

The declaration of the Customs Office of 14 October 1982 was

apparently not considered as binding by the competent criminal court.

It expressly reserved the decision on forfeiture, and the related

decision on recognition of the applicants' right of pledge, to the

final decision in the criminal case.  Thus the applicants may have had

to expect a determination of their civil rights in the criminal

proceedings in question and Article 6 para. 1 (Art. 6-1) of the

Convention was therefore applicable to those proceedings insofar as

the applicants were concerned.

        It is disputed between the parties whether the subsequent

customs proceedings must be seen as a prolongation of the criminal

proceedings or whether the seizure in the customs proceedings

constituted a new and separate matter for the purpose of Article 6

(Art. 6). The Commission observes that the customs proceedings were

already pending at the time of the introduction of the application,

but that in connection with these proceedings the applicants were only

affected when the seizure of the pledged objects was lifted in the

criminal proceedings.  The competent criminal court then did not order

the immediate return of these objects to the applicants, but reserved

the final decision on their status to the customs authorities which

subsequently pronounced a new seizure of these objects with a view to

their being used to satisfy the State's claim to the payment of import

duties by the applicants' client.  The relevant proceedings are still

pending.  They involve a determination whether the customs authorities

have correctly exercised their discretion in claiming the object

liability of the jewellery pledged to the applicants.  In these

circumstances it cannot be ruled out that there was a continuing

situation as regards the determination of the applicants' civil rights

in relation to the objects pledged to them by their client.

        The applicants also have complained in time of the customs

authorities' proceedings.  They could not be expected to complain of

these proceedings before they were affected by them, i.e. before the

customs authorities claimed the object liability of the jewellery

pledged to them and ordered its seizure.  The relevant decisions have

not yet become final and therefore this part of the application cannot

be rejected for failure to comply with the six months' time-limit

under Article 26 (Art. 26) of the Convention.  Nor can it be rejected

for failure to exhaust the domestic remedies, the applicants'

complaint concerning the length of the customs authorities'

proceedings and not their final result.

        The Commission notes the Government's arguments as to the

justification of the length of the proceedings complained of.

        However, it finds that the applicants' complaint that their

"civil rights" have not been determined "within a reasonable time"

is not manifestly ill-founded within the meaning of Article 27 para. 2

(Art. 27-2) of the Convention.  This issue - including the question

whether the period to be considered is limited to the criminal

proceedings or whether it also comprises the customs proceedings -

must be reserved for a consideration on the merits, no other ground of

inadmissibility having been established.

        For these reasons, the Commission, by a majority,

        DECLARES THE APPLICATION ADMISSIBLE

        without prejudging the merits of the case.

Deputy Secretary to the Commission   Acting President of the Commission

          (J. RAYMOND)                         (J.A. FROWEIN)