EUROPEAN COURT OF HUMAN RIGHTS
FORMER FIRST SECTION
CASE OF BAKLANOV v. RUSSIA
(Application No. 68443/01)
JUDGMENT <*>
(Strasbourg, 9.VI.2005)
--------------------------------
<*> This judgment will become final in the circumstances set
out in Article 44 з 2 of the Convention. It may be subject to
editorial revision.
In the case of Baklanov v. Russia,
The European Court of Human Rights (Former First Section),
sitting as a Chamber composed of:
Mr C.L. Rozakis, President,
Mr P. Lorenzen,
Mr G. Bonello,
Mrs F. Tulkens,
Mrs N. {Vajic} <*>,
--------------------------------
<*> Здесь и далее по тексту слова на национальном языке набраны
латинским шрифтом и выделены фигурными скобками.
Mr A. Kovler,
Mr V. Zagrebelsky, judges,
and Mr S. Nielsen, Section Registrar,
Having deliberated in private on 16 September 2004 and on 19
May 2005,
Delivers the following judgment, which was adopted on the last-
mentioned date:
PROCEDURE
1. The case originated in an application (No. 68443/01) against
the Russian Federation lodged with the Court under Article 34 of
the Convention for the Protection of Human Rights and Fundamental
Freedoms ("the Convention") by a Latvian national, Mr Viktor
Mikhaylovich Baklanov ("the applicant"), on 23 March 2001.
2. The applicant was represented by Mr A. N. Gurov, a lawyer
practising in Moscow. The Russian Government ("the Government")
were represented by Mr P.A. Laptev, the Representative of the
Russian Federation at the European Court of Human Rights.
3. The applicant alleged that he was deprived of his money by a
judgment which contained no legal grounds for the forfeiture.
4. The application was allocated to the First Section of the
Court (Rule 52 з 1 of the Rules of Court). Within that Section,
the Chamber that would consider the case (Article 27 з 1 of the
Convention) was constituted as provided in Rule 26 з 1.
5. By a decision of 6 May 2003, the Court declared the
application admissible.
6. On 1 November 2004 the Court changed the composition of its
Sections (Rule 25 з 1), but this case remained with the Chamber
constituted within Former First Section.
7. The applicant and the Government each filed observations on
the merits (Rule 59 з 1). The Chamber having decided, after
consulting the parties, that no hearing on the merits was required
(Rule 59 з 3 in fine), the parties replied in writing to each
other's observations. In addition, third-party comments were
received from the Latvian Government, which had exercised its
right to intervene (Article 36 з 1 of the Convention and Rule 44 з
1 (b)). The respondent Government replied to those comments (Rule
44 з 5).
THE FACTS
I. The circumstances of the case
8. The applicant was born in 1957 and lives in Riga.
9. In 1997 he decided to move from Latvia to Russia. He
negotiated a real estate deal with a Moscow-based agent.
10. On 20 March 1997 the applicant withdrew from his bank
accounts 250,000 US dollars ("USD") in cash and asked his
acquaintance, B., to deliver the money to Moscow.
11. B. arrived in the Sheremetyevo-1 airport later the same
day. He failed to declare the money at the customs checkpoint and
was charged with smuggling.
12. On 13 September 2000, the Golovinskiy District Court of
Moscow found B. guilty of smuggling under Article 188-1 of the
Criminal Code and sentenced him to two years' suspended
imprisonment. With regard to the money, the court said in the
operative part of the judgment:
"USD 250,000, deposited with the Sheremetyevo Customs Board,
are to be forfeited to the Treasury as an object of smuggling."
13. In his appeal against the judgment, B.'s lawyer submitted
that the Golovinskiy District Court had failed to indicate any
legal ground for the confiscation order. He argued that the money
had been included in the case-file as evidence and that no
relevant law provided for its confiscation. Moreover, lawfully
obtained assets were to be returned to their owners. B.'s lawyer
also claimed that Article 188-1 of the Criminal Code did not
provide for such a sanction as confiscation.
14. On 25 October 2000, the Moscow City Court refused the
appeal. With regard to the money, the court said:
"USD 250,000, which was the object of the smuggling, was
rightfully forfeited to the Treasury."
15. On 1 July 2002 a Deputy President of the Supreme Court
lodged an application for supervisory review against the
judgments. He claimed that the smuggled money could only be
confiscated if proven to have been acquired criminally.
16. On 18 July 2002 the Presidium of the Moscow City Court
refused the application on the ground that a Ruling of the Plenary
Supreme Court of the USSR issued in 1978 permitted the
confiscation of smuggled goods which had been attached to case-
files as exhibits.
17. On 15 August 2002 the Deputy President of the Supreme Court
lodged another application for supervisory review claiming, among
other things, that the Ruling of 1978 was inconsistent with later
superseding legislation. However, on an unspecified date the
Deputy President of the Supreme Court withdrew his application.
II. Relevant domestic law
18. Article 169-1 of the Criminal Code of 1960, as in force
from 15 July 1994 to 31 December 1996, provided:
"The carrying across the [State] border of considerable amounts
of goods or other items... in evasion of customs controls... or
without declaring [them] or with untrue declarations... shall be
penalised by imprisonment of up to five years... and by forfeiture
of the goods and other items carried across the border..."
18. Article 188-1 of the Criminal Code of 1996 ("CrC")
provides:
"Smuggling, i.e. transportation across the customs border of
the Russian Federation of considerable amounts of goods and other
items... without due customs control, or in evasion of such
control, or with fraudulent use of documents or identification
means, or in violation of rules of declaration, shall be penalised
by imprisonment of up to five years."
19. Article 279 of the Customs Code of 1993, as in force at the
material time, provided:
"Failure to declare or an inadequate declaration of goods...
carried across the customs border... which disclose no appearance
of smuggling... shall be punished by a fine of 100 to 200 per cent
of the cost of the goods which are the object of the offence, with
or without their forfeiture..."
20. The Code of Criminal Procedure of 1960 ("CCrP"), in force
at the relevant time, provided as follows:
Article 83. Exhibits
"Exhibits include items which served as instruments of crime,
or which have retained traces of the crime, or against which the
crime was directed. [Exhibits also include] criminally acquired
money and other valuables earned by crime, and any other items
which can help detect the crime, establish factual circumstances,
reveal the guilty or refute the charges or lessen the
responsibility."
Article 86. Destiny of exhibits in criminal proceedings
"The destiny of exhibits used in criminal proceedings must be
determined in a judgment..., and:
1. instruments of the crime which belong to the accused shall
be confiscated and passed to a competent agency or destroyed;
2. items prohibited for circulation shall be passed to a
competent agency or destroyed;
3. items of no value or use shall be destroyed or returned to
interested persons or agencies if they so wish;
4. criminally acquired money and other assets shall be
forfeited; other items shall be returned to their lawful owners,
or, if the owners are not established, shall become the State's
property. In the event of a dispute concerning the ownership of
such items, the dispute shall be resolved in civil proceedings;
5. documents which serve as exhibits shall be kept in the case
file as long as the case file is archived or shall be passed to
interested agencies".
21. The Ruling of the Plenary Supreme Court of the USSR No. 2
of 3 February 1978 ("the Ruling of the Supreme Court", "the
Ruling") provides:
"...With a view to ensure a uniform and correct application of
laws in proceedings concerning smuggling, the Plenary Supreme
Court decides [that]:...
7. In accordance with the legislation in force, smuggled items
must be forfeited as exhibits..."
22. Article 243-1 of the Civil Code of 1994 ("CivC") provides:
"In cases established by law, a person may be deprived of his
property without compensation pursuant to a court judgment as a
sanction for a crime or other offence (confiscation)..."
23. On 10 June 1998 the Presidium of the Supreme Court
exercised supervisory review of the criminal case against a
certain Mr Petrenko, who had been convicted of smuggling a
considerable amount of foreign currency into Russia. After
conviction, the trial court returned the money - which had been
included in the file as evidence - to its owner, Mr Petrenko. The
Supreme Court overturned the judgment having found that the money
should have been considered as an instrument of the crime and, as
such, it should have been confiscated pursuant to Article 86-1 of
the CCrP.
24. On 8 July 2004, the Constitutional Court held that Article
86-1 of the Code of Criminal Procedure was constitutional, even
though it permitted to confiscate instruments of crime, for
example smuggled money, belonging to other than the accused. In
particular, the Constitutional Court said:
"The rule set out in... Article 86-1 of the Code of Criminal
Procedure... helps Russia implement its international-law
obligations in criminal proceedings, does not overrule criminal
laws which permit confiscation as a punishment, and, hence, allows
the procedural law to regulate confiscation with regard to
[international instruments on money laundering and crime control].
...
It is a [criminal] court... who may determine the procedural
status of [smuggled items] under Article 86-1 of the Code of
Criminal Procedure...."
THE LAW
I. Alleged violation of Article 1 of Protocol No. 1
25. The applicant complained under Article 1 of Protocol No. 1
to the Convention that the Golovinskiy District Court forfeited
his, an innocent party's, money without any basis in law. Article
1 of Protocol No. 1 reads as follows:
"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."
A. Arguments of the parties
1. The Government
26. In their pre-admissibility submissions on the admissibility
and merits of the case, the Government made no comments on either
admissibility or merits, but informed the Court that the Deputy
President of the Supreme Court had "taken steps towards the
restoration of the applicant's rights presumably violated" and
that the domestic proceedings had been resumed.
In the proceedings on the merits, the Government submitted that
the applicant's money was seized pursuant to the laws which made
smuggling a criminal offence. The Government referred to the case
of AGOSI v. the United Kingdom (judgment of 24 October 1986,
Series A No. 108) claiming that such laws may be regarded as a
legitimate control of the use of the property. The balance between
the means employed by the State in exercising such control and the
interests of the applicant was not upset. Furthermore, when
handing the money over to B., the applicant knew perfectly well,
or should have known, that moving large amounts of cash across the
border was subject to special regulations. Hence, he was at least
guilty of negligence.
27. The Government maintained that the applicant's money was
attached to the case-file as an exhibit, pursuant to Article 83 of
the CCrP. The Golovinskiy District Court found that the money had
been smuggled and was the object of the offence. Therefore the
court reasonably forfeited the money to the Treasury as an object
of smuggling. Such a practice was confirmed by the recommendations
contained in the Ruling of the Supreme Court of 1978, according to
which, objects of smuggling, as evidence, should be forfeited to
the Treasury. The Ruling should be regarded as "law" for the
purposes of the Convention.
28. Furthermore, the applicant's money should be considered as
"criminally acquired" within the meaning of Article 86-4 of the
CCrP because it found itself in the territory of Russia as a
result of B.'s offence. Owners of criminally imported items lose
their rights to them.
29. The Government referred to the case of the Russian
Federation v. Petrenko (paragraph 22 above) claiming that the
confiscation of smuggled items used as evidence in criminal
proceedings is an established judicial practice.
30. Last, the Government asserted that the Constitutional
Court's judgment of 8 July 2004 supported their arguments.
2. The applicant
31. The applicant accepted that forfeiture of smuggled items
may be regarded as a control of the use of property. However, such
a control must have a basis in law. Russian law in force at the
time of B.'s offence and the forfeiture of the applicant's money
did not provide for such a measure. Indeed, the judgment of the
Golovinskiy District Court did not specify on what legal basis the
money was to be confiscated.
32. The applicant accepted furthermore that the money was
included in the case-file as an exhibit. Under Article 86 of the
CCrP, criminally acquired money and other assets must be
forfeited; other items must be returned to their lawful owners.
The court did not find that the money had been criminally
acquired. Hence, it should have been considered as "other items"
and returned to the applicant, its lawful owner.
33. The applicant claimed that the Government's reference to
the Ruling of the Supreme Court was misplaced. According to him,
Soviet criminal laws in force in 1978 did provide for the
forfeiture of smuggled items. However, Russian criminal laws in
force at the time of B.'s offence contained no such provision.
Furthermore, the Plenary Supreme Court is not a law-making body.
It may only clarify existing laws without distorting their
substantive meaning. Therefore, the Ruling of the Supreme Court
may not be considered as grounds for the forfeiture.
34. The applicant argued, lastly, that the civil legislation,
namely Article 243 of the CivC, only permits confiscation as
punishment for a crime. Since B.'s offence of smuggling could not,
pursuant to Article 188-1 of the CrC, be punished by confiscation,
this measure was unlawful.
B. The third party's comments
35. The Latvian Government opined that the applicant's rights
were violated.
36. In particular they asserted that at the material time
Russian law did not provide for confiscation such as happened in
the present case. Thus, Article 188-1 of the CrC did not list
confiscation as a sanction for smuggling.
37. As for the Ruling of the Supreme Court, it could not be
regarded as "law" for the following reasons. First, in a country
governed by the rule of law, decisions of the Plenary Supreme
Court may not equal or substitute Acts adopted by the Parliament.
Still less may the Supreme Court give decisions which contradict
such Acts. Next, Parliament itself passed no rule providing for
confiscation of smuggled items, nor did it delegate the power to
pass such a rule to any other authority. Lastly, according to the
Ruling of 1978, read in conjunction with the criminal laws in
force in the 1970s, smuggled items could only be confiscated if
proven to have been criminally acquired. The Russian authorities
never asked the Latvian authorities whether the applicant had
gained the money by crime.
C. The Court's assessment
38. It is not in dispute between the parties that the seizure
of the applicant's money constituted an interference with his
property rights within the meaning of Article 1 of Protocol No. 1
to the Convention. The Court is accordingly called upon to
determine whether this interference was justified in accordance
with the requirements of that provision.
39. The first and most important requirement of Article 1 of
Protocol No. 1 is that any interference by a public authority with
the peaceful enjoyment of possessions should be lawful: the second
sentence of the first paragraph authorises a deprivation of
possessions only "subject to the conditions provided for by law"
and the second paragraph recognises that the States have the right
to control the use of property by enforcing "laws". Moreover, the
rule of law, one of the fundamental principles of a democratic
society, is inherent in all the Articles of the Convention. It
follows that the issue of whether a fair balance has been struck
between the demands of the general interest of the community and
the requirements of the protection of the individual's fundamental
rights becomes relevant only once it has been established that the
interference in question satisfied the requirement of lawfulness
and was not arbitrary (see Iatridis v. Greece, judgment of 25
March 1999, Reports of Judgments and Decisions 1999-II, з 58).
40. When speaking of "law", Article 1 of Protocol No. 1 alludes
to the same concept to be found elsewhere in the Convention (see
{Spacek}, s.r.o. v. the Czech Republic, No. 26449/95, з 54, 9
November 1999).
41. This concept requires firstly that the impugned measures
should have a basis in domestic law. It also refers to the quality
of the law in question, requiring that it be accessible to the
persons concerned, precise, and foreseeable (see Beyeler v. Italy
[GC], No. 33202/96, з 109, ECHR 2000-I).
42. In assessing the requirement of lawfulness in the present
case the Court recalls that Article 169-1 of the Criminal Code of
1960, as in force until 31 December 1996, clearly provided for the
"forfeiture of the goods and other items carried across the
border..." Likewise Article 279 of the Customs Code of 1993
provided for the possibility of forfeiting goods carried across
the border in circumstances which cannot be classified as
smuggling. In addition the Plenary of the Supreme Court had in its
Ruling of 1978 clarified that in accordance with the legislation
in force, smuggled items presented as exhibits must be forfeited.
43. However, the Court recalls that with the entry into force
of the Criminal Code of 1996 the confiscation of forfeited goods
is no longer provided for in the Code itself. It is not for the
Court to speculate in the legislator's intentions when redrafting
the Criminal Code, but Article 188-1 of the Criminal Code, which
was the basis for the conviction of B. in the present case, would
not appear to be able to serve as the legal basis for the
forfeiture of the applicant's money.
44. As regards the provisions of the Code of Criminal Procedure
of 1960 of relevance to the present case (see з 20 above) the
Court recalls that instruments of the crime which belong to the
defendant (Article 86 з 1) and criminally acquired money and other
assets shall be forfeited whereas other items shall be returned to
their lawful owner (Article 86 з 4). It has not been argued, nor
is there any evidence to that effect, that the applicant's money
was "criminally acquired" and it does not appear that the national
courts relied thereon when deciding to forfeit the sum in
question. Thus, it remains unclear what legal basis served as the
basis therefore other than a Ruling of the Supreme Court which,
however, appears to relate to legislation no longer in force. It
is true that the Government have referred to a decision of the
Presidium of the Supreme Court of 10 June 1998 following which
certain amounts of foreign currency was forfeited after the owner
had been convicted of smuggling. Leaving aside the fact that this
decision relates to later period of time the Court notes that such
forfeiture appears to be clearly provided for in Article 86 з 1 of
the Criminal Code of Procedure which refers to instruments of the
crime which belongs to the accused, a situation different from
that of the present case.
45. Finally, as regards the Russian Constitutional Court's
judgment of 8 July 2004 to which the Government have also
referred, the Court recalls that the forfeiture of the applicant's
money took place several years prior to that judgment. Thus, it
cannot serve as an established interpretation of domestic
legislation on the basis of which the forfeiture could be
effected.
46. The Court accepts that its power to review compliance with
domestic law is limited as it is in the first place for the
national authorities to interpret and apply that law. However,
having regard to the national courts' lack of reference to any
legal provision as a basis for the forfeiture of an important sum
of money and to the apparent inconsistencies of case-law compared
to the national legislation, the Court considers that the law in
question was not formulated with such precision as to enable the
applicant to foresee, to a degree that is reasonable in the
circumstances, the consequences of his actions. It follows that
the interference with the applicant's property cannot be
considered lawful within the meaning of Article 1 of Protocol No.
1 to the Convention. This conclusion makes it unnecessary to
ascertain whether a fair balance has been struck between the
demands of the general interest of the community and the
requirements of the protection of the individual's fundamental
rights.
47. There has, accordingly, been a breach of Article 1 of
Protocol No. 1.
II. Application of Article 41 of the Convention
48. Article 41 of the Convention provides:
"If the Court finds that there has been a violation of the
Convention or the Protocols thereto, and if the internal law of
the High Contracting Party concerned allows only partial
reparation to be made, the Court shall, if necessary, afford just
satisfaction to the injured party."
A. Non-pecuniary damage
49. The applicant claimed 100,000 euros by way of non-pecuniary
damage. He submitted that, because his money was forfeited, he
could not buy a flat in Moscow. If he had moved to Moscow, he
would have been able to reunite with his ill, aged father before
he died in a home in June 2003.
50. The Government dismissed this claim as "fabulous".
51. The Court takes the view that the applicant has suffered
some non-pecuniary damage as a result of the violation found which
cannot be made good by the Court's mere finding of a violation.
The particular amount claimed is, however, excessive. Making its
assessment on an equitable basis, as required by Article 41 of the
Convention, the Court awards the applicant the sum of 3,000 euros.
B. Pecuniary damage
52. The applicant did not include the sum unlawfully forfeited,
that is USD 250,000 in his claims under Article 41.
53. However, he claimed USD 57,988.88. This amount, according
to the applicant's calculations, was the profit which the State
had gained by unlawfully retaining his money for the period until
1 July 2003.
54. In the Government's contention, this claim was also
"fabulous".
55. In the Court's opinion, this claim is linked to the
restitution of the sum unlawfully forfeited which the applicant
has not yet claimed. Accordingly, the Court cannot entertain this
claim.
56. Consequently, the Court makes no award under this head.
C. Costs and expenses
57. The applicant made no claims under this head. Accordingly,
the Court will make no award under this head.
FOR THESE REASONS, THE COURT
1. Holds by six votes to one that there has been a violation of
Article 1 of Protocol No. 1 to the Convention;
2. Holds by six votes to one
(a) that the respondent State is to pay the applicant, within
three months from the date on which the judgment becomes final
according to Article 44 з 2 of the Convention, EUR 3,000 (three
thousand euros) in respect of non-pecuniary damage, to be
converted into Latvian lati at the rate applicable at the date of
settlement, plus any tax that may be chargeable;
(b) that from the expiry of the above-mentioned three months
until settlement simple interest shall be payable on the above
amount at a rate equal to the marginal lending rate of the
European Central Bank during the default period plus three
percentage points;
3. Dismisses the remainder of the applicant's claims for just
satisfaction.
Done in English, and notified in writing on 9 June 2005,
pursuant to Rule 77 зз 2 and 3 of the Rules of Court.
Christos Rozakis
President
{Soren} Nielsen
Registrar
In accordance with Article 45 з 2 of the Convention and Rule 74
з 2 of the Rules of Court, the dissenting opinion of Mr Kovler is
annexed to this judgment.
C.L.R.
S.N.
DISSENTING OPINION OF JUDGE KOVLER
To my big regret I cannot agree with the conclusion of the
majority of the Chamber that there has been a violation of Article
1 of Protocol No. 1 on the ground that the interference (the
forfeiture order) was not "lawful".
The Court recalled on many occasions the importance of a legal
basis for interferences with the rights guaranteed by the
Convention. Only without a basis in the domestic law the
interference will not comply with the basic requirements of
"lawfulness" and the question of its justification will not arise.
As regards the present case, I would note that the penalty for
the substantive offence of a non-declaration of goods under
Article 279 of the Customs Code of 1993 as in force at the
material time made clear provision for the forfeiture of goods
concealed from customs control. The problem of the Court seems to
be that the articles of the Criminal Code of 1996 concerning
smuggling, as opposite to the Article 169-1 of the Criminal Code
of the RSFSR of 1960, do not contain such a provision. At the same
time Article 86-4 of the CCrP provided for the forfeiture of the
criminally acquired exhibits.
However, the Court's competence to review compliance with
domestic law is limited. It is in the first place for the national
authorities to interpret and apply this law (see Tre Traktorer
Aktiebolag v. Sweden, judgment of 7 July 1989, Series A No. 159, з
58).
I agree with the Court's opinion that the above mentioned
provisions of the national law left a certain ambiguity as to the
destiny of smuggled money in cases similar to the applicant's.
Under such circumstances it was only appropriate for the Supreme
Court to give its own interpretation of the law by issuing the
Ruling of 2 February 1978, since the Supreme Court may interpret
statutes to fill legal lacunas and such interpretation should be
considered as "law". As to the decision of the Presidium of the
Supreme Court of 10 June 1998 in the Petrenko case cited in з 23,
the convicted person himself had recourse to domestic remedies
available to him under the national law, which is not the case of
Mr. Baklanov. For instance, Article 429 of the Code of Civil
Procedure of the RSFSR offered him as a third person the
possibility to challenge the court judgment regarding confiscation
of his property (regretfully, this provision is not mentioned in
our Judgment). The applicant failed to exhaust the domestic
remedies available to him and did not appeal against the trial
court judgment.
As to the third party's comments that the smuggled items could
only be confiscated if proven to have been criminally acquired, I
am satisfied that the Judgment cites the Decision (Opredelenije)
of the Constitutional Court of the Russian Federation of 8 July
2004 where money smuggling is qualified as a criminal offence in
the light of the Council of Europe Convention on Laundering,
Search, Seizure and Confiscation of the Proceeds from Crime (8
November 1990) and of the UN Convention against Transnational
Organised Crime (15 November 2000). According to the Article 1 of
the CE Conventions the term "confiscation" means not only
punishment, but also "a measure ordered by a court following
proceedings in relation to a criminal offence or criminal offences
resulting in the final deprivation of property". Article 12 of the
UN Convention recognises "the possibility of confiscation of
proceeds from crimes, as well as of property, equipment or other
means used or intended for use in committing crimes".
Taking into account both national and international aspects of
the case I have decided not to join the majority of the Chamber in
its reasoning.
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