Communicated on 2 December 2015

THIRD SECTION

Application no. 41680/13 Milorad ULEMEK against Serbia lodged on 19 June 2013

STATEMENT OF FACTS

1. The applicant, Mr Milorad Ulemek , is a Serbian national who was born in 1968 and is currently serving his prison sentence in Zabela prison in Po žarevac . He was represented before the Court by Mr S. Milivojević and Mr A. Kova č ević , lawyers practising in Belgrade.

A. The circumstances of the case

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

Between 2007 and 2009 the applicant was convicted as a leader of an organised criminal group of a number of grave crimes he had committed between 2000 and 2003 and sentenced to 40 years of imprisonment.

3. On 29 March 2010 the Office of the Prosecutor for Organised Crime lodged a request for the forfeiture of the applicant ’ s assets in accordance with the Law on Seizure and Confiscation of the Proceeds from Crime ( Zakon o oduzimanju imovine proistekle iz krivi čnog dela ) ( hereinafter 2008 Law ). The Law was adopted on 27 October 2008 and it came into force on 1 March 2009.

4. The subject of the Prosecutor ’ s request was the applicant ’ s house which he had bought in 1998 for 374,409.00 German Marks (DM) (approximately 190,000.00 euros (EUR)). The Prosecutor further claimed that the applicant ’ s aggregate legitimate earnings from 1992, when he started his employment in the Ministry of Interior Secret Service, until 1998 when he purchased the house, had been only DM 22,789.00 (approximately EUR 11,650.00), less than one-fifteenth of the amount he paid for the property. Since there had been an obvious discrepancy between the applicant ’ s legitimate earnings and the value of his property, and since he was convicted as a member of the organised criminal group, the Prosecutor sought the forfeiture of the above house.

5. During the proceedings, the applicant, who was serving his sentence in a maximum security prison, was not allowed to be physically present at the hearings because of the security risks of transporting him some 80 km from the prison to the court. Instead, he participated in the hearings via video link and through his legal representatives.

6. On 20 May 2010 the Belgrade High Court accepted the request of the Prosecutor and issued a forfeiture order. The court reasoned that there were obvious discrepancies between the applicant ’ s legitimate earnings and the value of his property. Since the applicant had failed to provide any feasible evidence that he acquired the impugned property with the legally earned assets, and since he had been convicted of grave crimes with the elements of organised crime through which he “acquired enormous earnings”, the court found that the forfeiture was justified under Article 2 of the 2008 Law . The court also explained that this kind of forfeiture did not require the establishment of a direct link between the crime for which the applicant was convicted and the acquisition of property as it was the case with the ordinary confiscation of criminal gains regulated by Articles 91 and 92 of the Criminal Code. The court clarified that the applicant ’ s property was forfeited under a special procedure directed against the criminal proceeds of persons convicted of organised crime, which was entirely different from ordinary criminal forfeiture.

7. On 27 July 2007 the Belgrade Appellate Court quashed the above order and ordered a remittal. The Appellate Court found that the High Court did not establish the exact time when the applicant ’ s convictions had become final and, consequently, whether the Prosecutor ’ s forfeiture request had been lodged in a timely manner. The Appellate Court further found that the High Court had not sufficiently examined all the evidence offered by the applicant.

8. On 14 February 2011 the Belgrade High Court again accepted the request for the forfeiture of the applicant ’ s property with essentially the same reasoning as in its previous order while remedying the inconsistencies found by the Appellate Court in its decision of 27 July 2007.

9. The Belgrade Appellate Court confirmed the order on 3 April 2012. Among other findings, the Appellate Court clarified the nature of the forfeiture of criminal assets procedure by distinguishing it from the ordinary seizure of criminal proceeds. The court explained that the forfeiture of criminal assets is a special legal institution directed against the property of the persons convicted for specifically grave crimes, including organised crime and that once the person has been convicted for organised crime, there is a presumption that his or her property has been illegally acquired until proven otherwise. The court further clarified that no specific link between a particular criminal offence and the acquisition of a property was necessary in order to apply the provisions on forfeiture of criminal assets and that the specific criminal offence by which the assets were acquired did not even have to be proven. The court further explained that even the assets acquired prior to the commission of the offences for which the applicant had been convicted could been seized under the 2008 Law , since no link between the criminal offence and the property was necessary. Finally, the court elaborated that the measure of forfeiture of criminal assets was not a criminal sanction but a special measure for the recovery of criminally acquired wealth. The court concluded that, for these reasons, the provisions on prohibition of retroactivity of criminal law were not applicable.

10. On 10 July 2012 the applicant lodged a constitutional appeal in which he complained against the above decision of the Appellate Court, claiming that it violated principle of non-retroactivity of criminal law as well as his procedural rights and right to property.

11. On 3 December 2012 the Constitutional Court rejected the applicant ’ s constitutional appeal and upheld the above decision of the Appellate Court. In its reasoning, the Constitutional Court accepted the Appellate Court ’ s interpretation according to which the forfeiture of criminal assets was not a criminal sanction and that it did not have penal character. For these reasons, in the opinion of the Constitutional Court, the principle of non-retroactivity of criminal law was not applicable to the applicant ’ s case. It further found that the applicant ’ s complaints regarding his procedural and property rights were of a fourth-instance nature and hence inadmissible.

B. Relevant domestic law and practice

1. The Constitution ( Ustav published in the Official Gazette of the Republic of Serbia – OG RS – no. 98/06)

12. The relevant provisions of the Constitution read as follows:

Article 34

“No person may be held guilty for any act which did not constitute a criminal offence under law or any other regulation based on the law at the time when it was committed, nor shall a penalty be imposed which was not prescribed for this act .

The penalties shall be determined pursuant to a regulation in force at the time when the act was committed, save when subsequent regulation is more lenient for the perpetrator. Criminal offences and penalties shall be laid down by the law.”

Article 58

“Peaceful tenure of a person ’ s own property and other property rights acquired by the law shall be guaranteed.

Right of property may be revoked or restricted only in public interest established by the law and with compensation which cannot be less than market value.

The law may restrict the manner of using the property.

Seizure or restriction of property to collect taxes and other levies or fines shall be permitted only in accordance with the law.”

2. Law on Seizure and Confiscation of the Proceeds from Crime ( Zakon o oduzimanju imovine proistakle iz krivi č nog dela published in the OG RS no. 97/08)

13. According to Article 1 of the Law on Seizure and Confiscation of the Proceeds from Crime, the Law lays down requirements for the procedure and for the authorities responsible for tracing, seizing, confiscating and managing the proceeds from crime. According to Article 2, the Law shall be applicable for a list of qualifying offences, which include but are not limited to organised crime, war crimes and crimes against humanity, trafficking in drugs and abuse of office.

14. According to Article 3 of the Law, “assets” are goods of any kind and instruments in any form. It shall also denote revenue or other gain generated, directly or indirectly, from a criminal offence as well as any good into which it is transformed or which it is mingled with. “Proceeds of crime” are assets of an accused, co-operative witness or de cuius manifestly disproportionate to his/her lawful income. “Owner” refers to an accused person, a co-operative witness, de cuius and a legal successor or a third party. In case of de cuius , no criminal conviction is necessary, but the facts that he or she was involved in criminal activities from Article 2 of the Law must have been established in a separate criminal case against a third person.

15. According to Article 4, the Criminal Procedure Code is applicable as subsidiary legislation on procedural matters not envisaged by the Law itself.

Articles 8 to 14 establish the Directorate for the Management of Seized and Confiscated Assets and regulate its competences and organisation . Articles 15 to 20 regulate the financial investigation. Articles 21 to 27 prescribe the conditions and the procedure for the temporary seizure of assets.

16. Articles 28 to 36 provide for the procedures for the forfeiture of assets. According to Article 28, the prosecutor may file a request before the courts 1 year after the indictment and no later than 1 year after the final judgement of the criminal case. The request is directed against the property and the “owner”. According to Article 34, the court can issue a forfeiture order once it is satisfied that there is obvious discrepancy between the owner ’ s legal income and the value of his property, and that there are no other legal grounds for the owner ’ s acquisition of the impugned property. The court can also award the confiscated property to the victims of the crimes committed by the owner if their civil claim has been recognized by a final court decision. The court can also decide to leave a part of the property to the owner if its complete confiscation would jeopardize the livelihood of the owner or his or her dependents.

3 . Practice of the Constitutional Court and the Supreme Court

17. The Constitutional Court elaborated on the nature of forfeiture of criminal assets in its decision IUz no. 1242/10 of 30 June 2011. It noted that the relevant international instruments leave to the discretion of the Contracting Parties to decide whether they will treat the forfeiture as a punishment or as a measure of control of property. It then proceeded to analyse the nature of the forfeiture in Serbian legal system by applying the case-law of this Court.

18. The court first established that forfeiture is not listed as a criminal sanction in the relevant parts of the Serbian Criminal Code, that the forfeiture proceedings are proceedings in rem , that Serbian courts do not initiate these proceedings ex officio after the conviction and that the amount of the forfeited property does not depend of the level of culpability of the owner but of the amount of the discrepancy between the owner ’ s legal earning and the value of his property. The court further found that the measure is directed against “property, regardless of who is its nominal owner, and not a person”. The Constitutional Court noted that this strongly suggests that the measure is “not applied ad personam against the owner but in rem , regardless of the owner ’ s culpability”. The court proceeded by stating that the measure of forfeiture has preventive character, but that its primary purpose is to make sure that “crime does not pay” and hence, to “restore the situation that existed prior to the commission of criminal offences”. According to the court, this is clear evidence that the measure has primarily “restorative character”. All of this led the court to conclude that “forfeiture of criminal assets in Serbian legal system does not have a character of a criminal sanction, but represents a measure sui generis for control of property”.

19. The Constitutional Court, repeated this finding in its decision UŽ no. 2805/09 of 13 March 2012, where it held that the measure of forfeiture of criminal assets did not represent a criminal sanction in Serbian legal system but a measure of control of property. According to the Constitutional Court, the primary purpose of this measure was to prevent the persons concerned from benefiting from criminal activity.

20. The Supreme Court of Serbia, in its decision KŽ II ok TOI 278/09 of 20 November 2009 also held that the criminal assets forfeiture is not a criminal sanction, as was apparent in the case before it since the confiscated property belonged to the legal successors of two deceased individuals who had never been convicted of organised crime offences. The Supreme Court concluded that the forfeiture was a measure of control of property designed to prevent enrichment through criminal activities.

COMPLAINTS

21. The applicant complains, under Article 7 § 1 of the Convention, that the forfeiture of his property was contrary to the principle of non-retroactivity of criminal law. He also complains, relying on Article 1 of Protocol No. 1 to the Convention, that the forfeiture of his house on the basis of the retroactive law amounted to an unlawful confiscation of property.

QUES TION S TO THE PARTIES

1. Can the forfeiture of criminal assets as prescribed by the 2008 Law on Seizure and Confiscation of the Proceeds from Crime ( Zakon o oduzimanju imovine proistekle iz krivi čnog dela ) be considered as a penalty within the meaning of Article 7 § 1 of the Convention?

2. If so, was a heavier penalty imposed on the applicant than the one which was applicable at the time of the commission of the offence in the present case, as proscribed by Article 7 of the Convention?

3. Has there been an interference with the applicant ’ s peaceful enjoyment of possessions, within the meaning of Article 1 of Protocol No. 1?

4. If so, was the interference in issue “in accordance with the conditions provided for by law” and justified for one of the reasons set out in the second paragraph of Article 1 of Protocol No. 1 to the Convention?