THIRD SECTION

PARTIAL DECISION

AS TO THE ADMISSIBILITY OF

1. Application no. 35673/97 3. Application no. 36082/97

by Walter SCHWEIGHOFER by Peter HEINEMANN

against Austria against Austria

2. Application no. 35674/97 4. Application no. 37579/97

by Hans-Dieter RAUCH by Josef MACH

against Austria against Austria

The European Court of Human Rights ( Third Section) sitting on 24 August 1999 as a Chamber composed of

Sir Nicolas Bratza , President ,

Mr J-P. Costa,

Mr L. Loucaides ,

Mr P. KÅ«ris ,

Mr W. Fuhrmann ,

Mrs H.S. Greve ,

Mr K. Traja , Judges ,

with Mrs S. Dollé, Section Registrar ;

Having regard to Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms;

Having regard to the application introduced on 12 February 1997 by Walter Schweighofer against Austria and registered on 18 April 1997 under file no. 35673/97;

Having regard to the application introduced on 11 February 1997 by Hans-Dieter Rauch against Austria and registered on 18 April 1997 under file no. 35674/97;

Having regard to the application introduced on 9 April 1997 by Peter Heinemann against Austria and registered on 14 May 1997 under file no. 36082/97;

Having regard to the application introduced on 12 May 1997 by Josef Mach against Austria and registered on 1 September 1997 under file no. 37579/97;

Having regard to the report provided for in Rule 49 of the Rules of Court;

Having deliberated;

Decides as follows:

THE FACTS

The applicants are Austrian nationals. The first applicant was born in 1955, the second and the third applicants were born in 1943 and the fourth applicant was born in  1947. The first, second and fourth applicant are living in Vienna. The third applicant is living in Untertullnerbach .

The first and the fourth applicants are represented before the Court by Mr. Werner Weidinger , a lawyer practising in Vienna. The second and the third applicants are represented by Dr. Michael Tröthandel , a lawyer practising in Baden.

The facts of the case, as submitted by the applicants, may be summarised as follows.

On 12 December 1985 the second applicant was arrested at the Vienna airport on the suspicion of smuggling gold coins. 3200 gold coins and two gold bars were found hidden under his clothes. He was questioned as a suspect. On 15 December 1985 the Vienna Regional Criminal Court ( Landesgericht für Strafsachen ) opened preliminary investigations ( Voruntersuchung ) against the second applicant and released him. In 1986 he was repeatedly questioned either by the investigating judge or, upon the judge’s request, by the Vienna Customs Office ( Zollamt ) on suspicion of having organised large scale smuggling in which gold coins were exported to a Swiss company, M., and smuggled back to Austria where they were, via a number of firms owned by the applicant and other suspects, sold to banks, mostly the K. bank, and re-exported to Switzerland. Thereby the participants evaded large amounts of turnover tax and gained refunds for turnover tax which is due upon the import of goods but not upon their export.

On 27 July 1986 the fourth applicant was detained on remand on suspicion of participating in the smuggling of gold coins and tax evasion. Subsequently, he was questioned by the Custom’s Office upon the investigating judge’s request. The proceedings against him were separated from the proceedings against the other suspects.

On 30 October 1986 the third applicant, who was the deputy director of the K. bank, was detained on remand. On 31 October 1986 preliminary investigations were opened against him and the investigating judge at the Vienna Regional Criminal Court questioned him as a suspect for tax evasion and smuggling, as well as for offences under the Foreign Exchange Act ( Devisengesetz ). The proceedings against him were separated from the proceedings against the other suspects.

On 28 July 1987 the Vienna Public Prosecutor’s Office ( Staatsanwaltschaft ) filed an indictment against the third applicant. He was charged under section 33 § 2 (a) of the Tax Offences Act ( Finanzstrafgesetz ) with having aided and abetted tax evasion, in that he bought smuggled gold coins from the firms belonging to the other suspects and exported them to the M. company in Switzerland, whilst carrying out the necessary banking transactions to falsify a flow of money from the M. company to the K. bank.

On 2 November 1987 the third applicant was released from detention on remand. Subsequently, the proceedings against him were joined again to the proceedings against the other suspects.  On 30 November 1987 the fourth applicant was released from detention on remand.

On 30 June 1988 the Vienna Regional Criminal Court convicted the fourth applicant, inter alia , of tax evasion under section 33 § 2 (a) of the Tax Offences Act and of forging documents. It sentenced him to one year and ten months’ imprisonment and to a fine of twice the amount of the taxes evaded, namely Austrian schillings (ATS) 500 million, or one year’s imprisonment in default. The judgment became final in April 1989, following unsuccessful appeal proceedings. Subsequently, the proceedings against the fourth applicant, as far as they related to facts which had not been the subject of the above judgment, were joined to the proceedings against the other suspects.

On 21 December 1988 the Vienna Regional Criminal Court questioned the first applicant as a suspect and opened preliminary investigations on suspicion of tax evasion against him. Subsequently, he was questioned by the Vienna Customs Office, upon the Regional Court’s request.

On 16 October 1991 the Vienna Public Prosecutor’s Office filed the indictment, comprising some 250 pages, against thirteen co-accused including the four applicants. All four applicants were charged with tax evasion under section 33 § 2 (a) of the Tax Offences Act, which concerns the breach of the obligation to make correct monthly declarations estimating the amount of turnover tax due, and the related evasion of advance payments of turnover tax. They were also charged with smuggling under section 35 § 1 of the Tax Offences Act and with a breach of foreign exchange regulations under section 24 of the Foreign Exchange Act. The first and the fourth applicant were further charged with forging documents under section 223 § 2 of the Criminal Code ( Strafgesetzbuch ). In these and the subsequent proceedings all four applicant’s were represented by counsel.

On 1 June 1994 the trial before the Vienna Regional Criminal Court started. It lasted a total of twenty-nine days during June, September, October, November and December 1994 in the presence of the applicants and their counsel. The applicants pleaded not guilty, while some of their co-accused made confessions. Further, the court heard dozens of witnesses, including bank employees who had carried out an audit at the K. bank, and employees of the Austrian National Bank. The court also took extensive documentary evidence, including numerous files and reports from the finance authorities, the investigation report of the Vienna Customs Office and a report filed by the Austrian National Bank.

On 16 November 1994 the second and third applicant filed requests for the taking of evidence. They both requested that V., a member of the board of directors of the M. company, be heard as a witness and that an expert accountant be heard in order to show that the involvement of the K. bank did not serve to conceal the breaches of foreign exchange regulations but corresponded to an economic necessity. In addition, the third applicant requested that an expert accountant also be heard on two further issues. Finally, the third applicant requested that an expert in banking and bank note trading be heard. At the hearing on 17 November 1994 the Regional Court dismissed all these requests.

On 22 December 1994 the Vienna Regional Criminal Court gave its judgment comprising some 500 pages. It convicted all four applicants of having partly committed and partly aided and abetted tax evasion under section 33 § 2 (a) of the Tax Offences Act, smuggling under section 35 § 1 of the Tax Offences Act and a breach of foreign exchange regulations under section 24 of the Foreign Exchange Act. In addition it convicted the first and the fourth applicants of forging documents under section 223 § 2 of the Criminal Code.

The Regional Court found that the applicants had, together with their co-accused, between 1980 and 1986 run a sophisticated network engaged in large scale exports of gold coins to Switzerland, mostly to the M. company but also to several banks, declaring these exports and claiming refunds for turnover tax, which is not due upon export, and then bringing the coins back to Austria without declaring them, thus avoiding the turnover tax due upon import. Consequently, they breached foreign exchange regulations by exporting Austrian schillings to Switzerland without the permission of the Austrian National Bank, or by manipulating bank accounts falsifying a flow of money from Switzerland. The amount of taxes thus evaded were some ATS 205 million in the case of the first applicant, some ATS 916 million in the case of the second applicant, some ATS 632 million in the case of the third applicant and some ATS 545 million in the case of the fourth applicant. The relevant amounts under the Foreign Exchange Act were some ATS 570 million in the case of the first applicant, some ATS 2200 million in the case of the second applicant, some ATS 1,500 million in the case of the third applicant and some ATS 2,000 million in the case of the fourth applicant.

As to the sentence, the court had regard to the relevant provisions of the Tax Offences Act and the Foreign Exchange Act, which both provide for terms of imprisonment and fines ( Geldstrafe ), as well as for fines in lieu of confiscation ( Wertersatzstrafe ). For the offences at issue, fines of up to four times the amount of evaded tax are to be imposed under the Tax Offences Act and up to ten times the relevant amount under the Foreign Exchange Act. Under both Acts, fines in lieu of confiscation have to correspond to the common value of the items which would be subject to confiscation. Under the Tax Offences Act, each term of imprisonment in default may not exceed one year, while under the Foreign Exchange Act terms of imprisonment in default for fines, and fines in lieu of confiscation, may not exceed eighteen months altogether. In some cases regard was also to be had to prior convictions by finance authorities or criminal courts.

The Regional Court pronounced the following sentences under the Tax Offences Act:

- for the first applicant, twenty months’ imprisonment and a fine of ATS 409 million, or one year’s imprisonment in default, plus a fine in lieu of confiscation of ATS 1 million or five months’ imprisonment in default;

- for the second applicant, two years’ imprisonment and a fine of ATS 1,800 million, or eleven months and five days’ imprisonment in default, and a fine in lieu of confiscation of ATS 8,7 million or nine months and ten days’ imprisonment in default;

- for the third applicant, two years’ imprisonment and a fine of ATS 1,200 million, or one year’s imprisonment in default, and a fine in lieu of confiscation of ATS 6,3 million or one year’s imprisonment in default; and

- for the fourth applicant, fourteen months’ imprisonment, a fine of ATS 1,200 million or one month’s imprisonment in default, and a fine in lieu of confiscation of ATS 9,8 million or one year’s imprisonment in default.

Under the Foreign Exchange Act, the Regional Court pronounced the following sentences:

- for the first applicant, eighteen months’ imprisonment and a fine of ATS 1,100 million, or four months’ imprisonment in default, and a fine in lieu of confiscation of ATS 190 million or four months’ imprisonment in default;

- for the second applicant, three years’ imprisonment and a fine of ATS 4,500 million, or one year’s imprisonment in default and a fine in lieu of confiscation of ATS 730 million or six months’ imprisonment in default;

- for the third applicant, three years’ imprisonment, a fine of  ATS 4,700 million and a fine in lieu of confiscation of ATS 410 million, or six months’ imprisonment in default; and

- for the fourth applicant, two years’ imprisonment and a fine of ATS 4,500 million, or one year’s imprisonment in default, and a fine in lieu of confiscation of ATS 940 million or six months’ imprisonment in default.

Subsequently, the applicants each filed a plea of nullity and an appeal ( Nichtigkeitsbeschwerde und Berufung ). On 14 November 1996 the Supreme Court ( Oberster Gerichtshof ) dismissed the applicants’ pleas of nullity and their appeals.

The Supreme Court noted the complaint raised by the first, second and fourth applicants that the offence of tax evasion under section 33 § 2 (a) of the Tax Offences Act, concerning the breach of the obligation to make a correct monthly declaration estimating the amount of turnover tax due and the related evasion of advance payments, was in a relationship of subsidiarity to the offence of tax evasion under section 33 § 1 of the said Act, concerning the final evasion of turnover tax due per year. They claimed that they should have been charged with the latter offence for which section 55 of the Tax Offences Act contained a prohibition on holding a criminal trial before the termination of the tax assessment proceedings. The Supreme Court observed that section 55 of the said Act had meanwhile been abolished. Further, it recalled that the subject of criminal proceedings was delimited by the indictment. In the present case, the Public Prosecutor had confined the charges to offences under section 33 § 2 (a)  of the Tax Offences Act which were less serious than those under  section 33 § 1 of the said Act. Thus, the limitation of the indictment was not to the applicants’ detriment.

The Supreme Court noted the request made by all four applicants to refer the case to the Court of Justice of the European Communities for a preliminary ruling under Article 177 of the EEC Treaty. They relied on section 61 of the Criminal Code, which provides inter alia that the criminal law is to be applied retroactively if it is more favourable than the law which was in force at the time the offence was committed, and argued that they should not have been convicted under section 24 of the Foreign Exchange Act. According to the applicants, this offence had already been invalidated at the time of the first instance judgment, as the Austrian National Bank had liberalised the foreign exchange market in 1991. Moreover, Austria’s accession to the European Economic Area on 1 January 1994 and to the European Union on 1 January 1995 had invalidated the Foreign Exchange Act as a whole.

The Supreme Court found that the question concerned first and foremost the interpretation of section 61 of the Criminal Code. Further it noted that the offence under section 24 of the Foreign Exchange Act consisted in breaching foreign exchange regulations, for instance those issued by the Austrian National Bank. According to its constant case-law, there was no room for the application of section 61 of the Criminal Code in relation to section 24 of the Foreign Exchange Act. The reason lay in the particular nature of the offence which - by referring to the respective regulations - provided a flexible instrument for achieving the changing aims of monetary policy. The Supreme Court also dismissed the applicants’ argument that the Foreign Exchange Act as a whole had been invalidated by Austria’s accession to the European Economic Area and its subsequent accession to the European Union. It found in particular that there was still a need for the offence under section 24 of the Foreign Exchange Act. Member States of the European Economic Area could, under certain conditions, take adequate measures in order to control their foreign exchange market. The law of the European Union, which had only entered into force after the first instance judgment had been given, and was therefore not directly relevant in the context of the case, also allowed the member States to take common measures of foreign exchange control.

As to the second and third applicants’ complaint about the refusal of their requests for the taking of evidence, the Supreme Court confirmed the Regional Court’s decision. Both applicants had requested that V., a member of the board of directors of the M. company, be heard in order to show that part of the gold coins bought by the M. company had been sold to a bank in Luxembourg. Given that the second applicant had throughout the trial either refused to disclose the names of purchasers of the gold coins, or simply claimed not to remember at all, and had not been able to furnish any documents, such as invoices or customs papers, as proof for the alleged sales, the Regional Court had rightly found that the request was not relevant for the proceedings, but rather aimed at delaying them. Both applicants’ further request to hear an expert accountant, in order to show that the involvement of the K. bank in the export of the gold coins was necessary for economic reasons, disregarded the other results of the evidentiary proceedings. The third applicant’s further request to hear an expert accountant to show that he had acted with due diligence when carrying out large scale trading with gold coins, was irrelevant as the charges against him were founded on the manipulation of bank accounts. The evaluation of whether or not the report of the Austrian National Bank was conclusive was for the first instance court to make, and not for a further expert, as requested by the third applicant. Finally, his request to hear a banking expert on the  specific conditions of the Zurich money market was also not relevant for the proceedings. In conclusion, the Supreme Court found that the Regional Court, which advanced detailed reasons for its refusal of the applicants’ requests, had not unduly limited their defence rights.

The judgment was served on the second and third applicants on 17 January and on the first and fourth applicants on 21 January 1997.

COMPLAINTS

1. All four applicants complain under Article 6 § 1 of the Convention about the length of the criminal proceedings against them.

2. All four applicants also complain under Article 6 § 1 of the Convention that their conviction under section 24 of the Foreign Exchange Act was unfair as the Supreme Court refused to refer the case to the Court of Justice of the European Communities for a preliminary ruling under Article 177 of the EEC Treaty on the question whether the Austrian Foreign Exchange Act had been invalidated by Austria’s accession to the European Union. The second and the third applicants also claim that, thus, the Supreme Court cannot be regarded as a tribunal established by law. The first and the fourth applicants also invoke Article 7 of the Convention.

3. The first and the fourth applicants complain under Articles 6 § 1 of the Convention that they were charged with offences under section 33 § 2 (a) of the Tax Offences Act, and not with offences under section 33 § 1 of the said Act. They claim that section 33 § 2 (a) is subsidiary to section 33 § 1 and that the Supreme Court should thus have acquitted them. They also invoke Article 7 of the Convention.

4. The first and the fourth applicants further complain under Article 6 § 1 of the Convention that the fines imposed on them were excessive. Therefore, it was clear from the beginning that they would be irrecoverable and that they would have to serve the prison term applicable in case of default. The courts thus applied the law in an unfair manner, as they deprived them of the possibility to pay the fine in order to avoid their imprisonment.

5. Finally, the second and the third applicants complain under Article 6 § 3 (d) of the Convention that the Vienna Regional Criminal Court dismissed their requests for the taking of evidence filed on 16 November 1994.

THE LAW

1. The applicants invoke Article 6 of the Convention which, so far as relevant for the present case, reads as follows:

“1. In the determination of ... any criminal charge against him, everyone is entitled to a fair ... hearing within a reasonable time ... by [a] ... tribunal established by law. …

3. Everyone charged with a criminal offence has the following minimum rights: …

d. to examine or to have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him; … .”

2. All four applicants complain under Article 6 § 1 of the Convention about the length of the criminal proceedings against them.

The Court considers it cannot, on the basis of the file, determine the admissibility of this complaint and that it is, therefore, necessary, in accordance with Rule 54 § 3 (b) of the Rules of Court, to give notice of this complaint to the respondent Government.

3. The applicants also complain under Article 6 § 1 of the Convention that their conviction under section 24 of the Foreign Exchange Act was unfair as the Supreme Court refused to refer the case to the Court of Justice of the European Communities for a preliminary ruling under Article 177 of the EEC Treaty on the question whether the Austrian Foreign Exchange Act had been invalidated by Austria’s accession to the European Union. The second and the third applicants also claim that, thus, the Supreme Court cannot be regarded as a tribunal established by law. The first and the fourth applicants also invoke Article 7 of the Convention.

a. As to the complaint under Article 6 § 1, the Court recalls that the Convention does not guarantee, as such, any right to have a case referred to the Court of Justice of the European Communities for a preliminary ruling under Article 177 of the EEC Treaty. Nevertheless, refusal of a request for such a referral may infringe the fairness of proceedings if it appears to be arbitrary (cf. no. 15669/89, Dec. 28.6.93, D.R. 75, p. 39; no. 20631/92, Dec. 12.5.93, D.R. 74, p. 275).

The Court finds that there is no such arbitrariness in the present case. The Supreme Court examined the applicants’ arguments at length and gave detailed reasons for its finding that the present case did not raise any preliminary question of EEC law. There is, thus, no appearance of a violation of Article 6 of the Convention.

b. The first and the fourth applicants also invoke Article 7 of the Convention, which, so far as relevant, reads as follows:

“1. No one shall be held guilty of any criminal offence on account of any act or omission which did not constitute a criminal offence under national or international law at the time when it was committed. Nor shall a heavier penalty be imposed than the one that was applicable at the time the criminal offence was committed.”

The Court notes at the outset that the foreign exchange transactions carried out by the applicants constituted offences under section 24 of the Foreign Exchange Act at the time they were committed. This is not disputed by the applicants. Their claim that Austria’s accession to the European Economic Area, and subsequently to the European Union, had invalidated the Foreign Exchange Act, concerns the interpretation of section 61 of the Criminal Code, according to which any criminal law applies retroactively if it is more favourable than the law which was in force at the time the offence was committed. The domestic courts dismissed the applicant’s line of argument in accordance with the Supreme Court’s constant case ‑ law. The Court finds that these facts do not disclose any appearance of a violation of Article 7 of the Convention.

It follows that this part of the application is manifestly ill-founded within the meaning of Article 35 § 3 of the Convention.

4. The first and the fourth applicants complain under Articles 6 § 1 of the Convention that they were charged with offences under section 33 § 2 (a) of the Tax Offences Act, and not with offences under section 33 § 1 of the said Act. They claim that section 33 § 2 (a) is subsidiary to section 33 § 1 and that the Supreme Court should thus have acquitted them. They also invoke Article 7 of the Convention.

The Court recalls that, according to Article 19 of the Convention, its duty is to ensure the observance of the engagements undertaken by the Contracting Parties of the Convention. In particular it is not its function to deal with errors of fact or law allegedly committed by a national court unless and in so far as they may have infringed rights and freedoms protected by the Convention (Eur. Court HR, Garcia Ruiz v. Spain judgment of 21 January 1999, § 28, to be published in Reports of Judgments and Decisions 1999).

In the present case the applicants were charged with and convicted of offences under section 33 § 2 (a) of the Tax Offences Act, concerning the failure to make correct monthly declarations estimating the amount of turnover tax due and the related evasion of advance payments of turnover tax. They do not deny that their acts constituted this offence at the time they were committed. The Court finds that the applicants’ complaint does not disclose any appearance of a violation of either Articles 6 or 7 of the Convention.

It follows that this part of the application is manifestly ill-founded within the meaning of Article 35 § 3 of the Convention.

5. The first and the fourth applicants further complain under Article 6 § 1 of the Convention that the fines and the fines in lieu of confiscation imposed on them were excessive. Therefore, it was clear from the beginning that they would be irrecoverable and that they would have to serve the prison term applicable in case of default. The courts thus applied the law in an unfair manner as they deprived them of the possibility to pay the fine in order to avoid their imprisonment.

It appears that the applicants did not explicitly raise this complaint in their plea of nullity and appeal to the Supreme Court. In any case, even assuming exhaustion of domestic remedies, this complaint again concerns an error of law allegedly committed by a national court, which is not for the Court to review unless and in so far as it may have infringed rights and freedoms protected by the Convention (see point 4. above). The Court notes that the fines, and the fines in lieu of confiscation, imposed on the applicants in the present case were extremely high. However, there is no appearance of arbitrariness, the default sentences being imposed in accordance with the clear provisions of the Tax Offences Act and the Foreign Exchange Act. The Court, therefore, finds that the applicant’s complaint does not disclose any appearance of a violation of Article 6 of the Convention.

It follows that this part of the application is also  manifestly ill-founded within the meaning of Article 35 § 3 of the Convention.

6. Finally, the second and the third applicants complain under Article 6 § 3 (d) of the Convention that the Vienna Regional Criminal Court dismissed their requests for the taking of evidence filed on 16 November 1994.

The Court recalls that while Article 6 of the Convention guarantees the right to a fair hearing, it does not lay down any rules on the admissibility of evidence or the way it should be assessed, which are therefore primarily matters for regulation by national law and the national courts. The Court’s role is to ascertain whether the proceedings as a whole were fair (Eur. Court HR, Garcia Ruiz v. Spain judgment, loc. cit ; Schenk v. Switzerland judgment of 12 July 1988, Series A no. 140, p. 29, § 46).

In the present case, the applicants’ trial lasted twenty-nine days before the Vienna Regional Criminal Court in 1994. That court heard numerous witnesses and took extensive documentary evidence. When the second and third applicants filed their requests for the taking of further evidence towards the end of the trial, the Regional Court dismissed them as being irrelevant and partly as being made in order to delay the proceedings. The Supreme Court, noting that the Regional Court had given detailed reasons for its refusal, confirmed this decision. The Court finds that there is no indication that the applicants, represented by counsel, could not duly put forward their defence or that the proceedings were otherwise unfair. There is thus no appearance of a violation of Article 6 of the Convention.

It follows that this complaint is also manifestly ill-founded within the meaning of Article 35 § 3 of the Convention.

For these reasons, the Court, unanimously,

DECIDES TO JOIN the applications;

DECIDES TO ADJOURN the examination of the applicants’ complaint about the length of the criminal proceedings against them;

DECLARES INADMISSIBLE the remainder of the applications.

S. Dollé N. Bratza

Registrar President