Published on 25 April 2022

FOURTH SECTION

Application no. 10599/14 Sotir Zhivkov YANKOV and Others against Bulgaria lodged on 23 January 2014 communicated on 8 April 2022

STATEMENT OF FACTS

A list of the applicants is set out in the appendix. The applicants are represented before the Court by Mr M. Ekimdzhiev and Ms S. Stefanova, lawyers practicing in Plovdiv.

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

The first and second applicants are spouses and the third applicant is their daughter. The fourth applicant is a company owned by the first and second applicants.

On 21 September 2012 the first, second and third applicants were charged with tax evasion, committed on multiple occasions between 2009 and 2012.

Since that offence fell within the scope of the Forfeiture of Proceeds of Crime Act 2005 (hereinafter “the 2005 Act”), the Commission for Uncovering Proceeds of Crime (hereinafter “the Commission”) opened an inquiry into the first and second applicants’ income and expenditure between 1988 and 2012. It established that the first and second applicants had set up several companies, including the fourth applicant, through which they were carrying out different business activities. Those companies, and the first and second applicants in their private capacity, had acquired numerous immoveable properties; some of them had been transferred to other parties, including the third applicant. The expenses of the first and second applicants during the period under examination, including for the acquisition of the properties above, for daily expenses and paid into the capital of their companies, amounted to 109,817,863 Bulgarian levs (BGN), the equivalent of about 56,173,000 euros (EUR), or also equivalent of 63,246 minimum monthly salaries. During the same period, the first and second applicants’ income which could be considered “lawful” was in the amount of BGN 3,227,938 (EUR 1,651,000), equalling 3,942 minimum monthly salaries.

The Commission considered that the shares of the first and second applicants in several of their companies, numerous immoveable properties of the four applicants and sums received from the sale of further properties could be the subject of forfeiture as proceeds of crime.

On the basis of the findings of its inquiry, in May 2013 the Commission applied for orders freezing a number of assets of the applicants. It pointed out that the applicants had acquired assets of significant value, whereas no sufficient lawful income had been established. This meant that the prospective forfeiture claim, concerning assets with a global value of BGN 16,395,031 (EUR 8,386,200), was potentially well-founded.

Since the measures applied for concerned real properties situated in the Plovdiv, Burgas and Sofia regions, the Commission initiated three sets of proceedings.

In a decision of 30 May 2013 the Plovdiv Regional Court dismissed the Commission’s application for interim measures, finding it unclear. That decision was upheld on 5 June 2013 by the Plovdiv Court of Appeal.

Upon an appeal by the Commission, in a final decision of 25 July 2013 the Supreme Court of Cassation quashed the lower courts’ decision and ordered the freezing of the assets indicated by the Commission, namely: numerous flats, offices, garages and industrial buildings owned by the four applicants, as well as by another of the first and second applicants’ companies which is not an applicant in the present proceedings; the first and second applicants’ shares in several companies; bank accounts of the first and second applicants. Referring to the statements of the Commission mentioned above, the Supreme Court of Cassation noted that the assets at issue could be reasonably presumed to be the proceeds of crime, which justified the imposition of interim measures.

In a decision of 31 May 2013 the Burgas Regional Court froze the following assets: a flat owned by the third applicant and a plot of land with a building owned by the fourth applicant. It considered the Commission’s application for such measures well-founded, in light of the alleged criminal activity of the first and second applicants, the fact that they had acquired considerable assets, and the lack of sufficient lawful income; all this rendered the Commission’s prospective forfeiture claim potentially meritorious.

Upon an appeal by the applicants, who argued most notably that the assessment of their income and expenses on the part of the Commission had been erroneous, in a final decision of 26 July 2013 the Burgas Court of Appeal upheld the lower court’s decision. It pointed out that the issue raised by the applicants fell to be examined in the ensuing forfeiture proceedings.

In a decision of 31 May 2013 the Sofia City Court found the Commission’s application for interim measures well-founded. It noted that “as a result of their criminal activity” the first and second applicants had acquired substantial assets, which “fell to be forfeited and would be concerned by the prospective forfeiture claim”. It thus ordered the freezing of four real properties in Sofia owned by the first and second applicants.

Upon an appeal by the applicants, in a final decision of 11 October 2013 the Sofia Court of Appeal upheld the above decision. It observed that the applicants had referred most of all to irregularities in the criminal proceedings, but these matters were not to be examined in preliminary proceedings under the 2005 Act concerning interim measures.

In a letter dated 14 December 2021 the first, second and third applicants stated that the criminal proceedings against them remained pending before the Plovdiv Regional Court. The freezing orders have not been lifted. No forfeiture claim has yet been brought.

RELEVANT LEGAL FRAMEWORK AND PRACTICE

The relevant provisions of the 2005 Act and the practice of the national courts have been summarised in Todorov and Others v. Bulgaria (nos. 50705/11 and 6 others, §§ 90-114, 13 July 2021).

In addition, the provisions of the 2005 Act concerning freezing of assets with a view of their forfeiture have been described in Nedyalkov and Others v. Bulgaria (dec.) (no. 663/11, §§ 46-57, 10 September 2013).

COMPLAINTS

The applicants complain, relying on Article 1 of Protocol No. 1 and Articles 6 § 1 and 13 of the Convention, of the freezing of their assets under the 2005 Act. They consider the interim measures arbitrary and take issue with their lengthy duration.

QUESTIONS TO THE PARTIES

Was the freezing of the applicants’ assets under the Forfeiture of Proceeds of Crime Act 2005 compliant with Article 1 of Protocol No. 1? In particular, could the authorities’ failure to show, even with a view of the preliminary character of the measures complained of, any suspected link between the assets concerned and any criminal activity of the first, second or third applicants, pose a problem in that regard (see, mutatis mutandis , the approach in Todorov and Others v. Bulgaria , nos. 50705/11 and 6 others, §§ 200-216, 13 July 2021)? Could, in addition, the duration of the measures against the applicants disrupt the fair balance under Article 1 of Protocol No. 1?

The parties are invited to specify what is the current state of the forfeiture proceedings against the applicants.

APPENDIX

No.

Applicant’s Name

Year of birth/registration

Nationality

Place of residence

1.Sotir Zhivkov YANKOV

1956Bulgarian

Plovdiv

2.Elena Atanasova YANKOVA

1961Bulgarian

Plovdiv

3.Maria Sotirova YANKOVA

1984Bulgarian

Plovdiv

4.YANKOV I SIE OOD

1992Bulgarian

Plovdiv