Bulgaria has established one of the most aggressive confiscation
regimes in Europe, allowing seizure of assets without a criminal conviction and
putting the burden of proof in the procedure on the owner. Bulgarian law, as it
stands, has no specific safeguards to prevent misuse, and has been criticized
by the European Court of Human Rights (ECtHR) in cases like Dimitrovi
v Bulgaria. Furthermore, questions
have been raised as government opponents and critics seem to be prime targets
of these confiscation measures. In a
preliminary reference to the Court of Justice of the European Union (CJEU) from
Sofia’s City Court on that issue, Advocate General Eleanor Sharpston has
recently delivered her opinion which leaves the door wide open for political
abuse by Bulgarian authorities.
The Bulgarian Supreme Court, in an interpretative
decision of December 2018, which is
binding on all courts, held that assets could not be confiscated without a
final criminal conviction because the presumption of innocence applied. This safeguard
was short-lived as the Bulgarian legislator enacted amendments in a rush to
curtail the effects of this decision. In this context, it is not surprising
that the Bulgarian judiciary is seeking to verify if Bulgaria’s legislation on
confiscation is compatible with EU law. On 3rd April 2018, the Sofia
City Court lodged a request for a preliminary reference to the CJEU to clarify the
application of Directive
2014/42/EU of 3rd April 2014 on “freezing and confiscation of
instrumentalities and proceeds of crime” in the EU. On 31st
October 2019, Advocate General Eleanor Sharpston delivered her Opinion
on the case.
Which Is the Applicable EU Legislative Instrument?
AG Sharpston first considered the applicable legislation in the
case. Despite the questions raised by the national court, she concluded that
Directive 2014/42/EU was not applicable ratione
temporis since the implementation period expired on 4 October 2016 while
the case was presented to the national court on 22 March 2016. This result, however, is debatable.
AG Sharpston based her argument on settled case-law
establishing that a Directive had direct effect only after the transposition
period expired. She does not address an alternative condition, though. In joined
Cases C-468/10 and C-469/10,
the ECJ held: “Whenever the provisions of a directive appear, so far as their
subject-matter is concerned, to be unconditional and sufficiently precise, they
may be relied on before the national courts by individuals against the State
where the latter has failed to implement that directive in domestic law by the
end of the period prescribed or where it has failed to implement that directive
correctly” (para. 51). The crucial point here is that the Directive not only
entered into force in 2014, but it was implemented in national Bulgarian
legislation as early as 2015 through an amendment to the motivation of the Law
on the Confiscation of Illegally Obtained Assets of 2012.
But even if the Directive had not been applicable ratione
temporis because the transposition period was still ongoing, the principle
of loyal cooperation requires Member States during that period to refrain from
adopting measures undermining the result sought by a Directive. This is the
case when the legislator adopts a legal instrument, and it is also the case
when a national court applies the existing law by interpreting it in a way
which allows the intended effect of the EU legislation in question.
Disguised Criminal Proceedings
Under Bulgarian law, the very initiation of criminal proceedings
allows the Commission for Confiscation to initiate confiscation proceedings. Hence,
a second issue, which attracted the attention of AG Sharpston, was whether the latter
proceedings are criminal or civil in nature. In passing, AG Sharpston stated that
Directive 2014/42/EU does not apply in the case at
hand ratione materiae either because the offense described in the
preliminary reference (embezzlement) does not fall within the scope of offenses
referred to in its Article 3. Even further, she argued that while the Framework
Decision 2005/212/JHA on “confiscation of crime-related
proceeds, instrumentalities and property”, which
preceded the Directive, was potentially applicable ratione temporis and
while the offense described fell within its scope, the Framework Decision could
not be applied to the case at hand because the proceedings before the national
court are not proceedings in relation to a criminal offense within the meaning
of Article 1 of Framework Decision 2005/212/JHA (para 66 of the Opinion).
Is that so? While, as AG Sharpston properly reminds the Court, it is
for the national court to qualify the nature of proceedings, it is also
important to have a unified understanding of what a criminal proceeding/proceeding
linked to an offense at the EU level is. Reasoning in the reverse would leave
it to the sole discretion of Member States to apply a Directive or not by a
simple qualification without materiality.
To qualify the nature of confiscation proceedings under Bulgarian
law, it is necessary to analyze those provisions of national law which allow
the confiscation of property. As seen from Article 108 of the current Law
on Combating Corruption and the Confiscation of Illegally Obtained Assets
of 2018 as well as Article 21 of
the 2012 law, which preceded it, the Commission for Confiscation can start
proceedings at the condition that a person is considered an accused party for
crimes listed in the law. Without criminal charges, confiscation proceedings
are impossible. This was also established by the ECtHR in Dimitrovi
v Bulgaria where
the Court held that the purpose of the national law adopted in 2012 is to
combat corruption and organized crime by enabling the state to seize property
originating from criminal activity.
Furthermore, the law states that in performing its
duties the Commission for Confiscation interacts with the Prosecution and the
Police. It also says the Prosecution is obliged to inform the Commission of all
decrees it renders in the investigation. In other words, the Commission uses
materials from the criminal investigation for its own investigation. However,
the affected person is deprived of the procedural rights that typically apply
to criminal proceedings, such as the burden of proof resting on the
authorities, presumption of innocence, right to fair trial, etc.
In its 2018 interpretative decision, the Bulgarian Supreme Court
of Cassation recognized the issue and held that if a criminal case, on which a
claim for civil confiscation is based,
ends without a conviction, the claim for civil confiscation of property can
neither be filed, nor sustained.
A Question of Fundamental Rights
Despite the above facts, and maybe due to the imprecise explanations, which the national court provided in these proceedings, AG Sharpston asserted these proceedings were of a civil law nature, which is not a sustainable argument. Besides, she argued that the fundamental rights and safeguards provided for by the legal order of the Union would not apply as the case was outside the scope of EU law, as long as it was “civil”. She also said that “there is nothing in this Framework Decision which makes confiscation dependent on a final conviction”, her main argument being the definition of confiscation in the Framework Decision 2005/212/JHA.
Not only is Framework Decision 2005/212/JHA applicable, but the AG’s
comments are not entirely convincing because they ignore the rest of the provisions
of the Framework Decision. The recitals of the Framework Decision mention the EU
Charter of Fundamental Rights and its Article 8 explicitly refers to
fundamental rights, and specifically to the presumption of innocence. Besides,
its Articles 2 and 3 prescribe that to be confiscated, either wholly or in
part, a property should either be the proceeds or instrumentalities of a
criminal offence or belong to a person, convicted of an offense.
Finally, one of the AG’s key points is that although 2014/42/EU
does not apply ratione materiae, it nonetheless replaces certain
provisions of the Framework Decision (para. 44). These provisions are the first
four indents of Article 1 and Article 3: in particular, the Directive modifies
the definition of the confiscation as meaning “a final deprivation of property
ordered by a court in relation to a criminal offence”. Due to the ratione
temporis question, the AG considers that these provisions cannot be relied
upon directly in the case at hand. In fact, however, due to the early (and I would
dare to say incorrect) transposition of the Directive by Bulgaria, the
Directive is applicable, and therefore the confiscation definition in question
should apply. In other words, the applicable EU law provides that confiscation,
including in the case of extended confiscation, should only be subject to the
property of a person who was convicted by a court whose judgement has the force
of res judicata.
Doors Wide Open for Political Abuse
understand the Bulgarian sensitivities towards providing appropriate guarantees
in proceedings concerning confiscation, we need to consider Bulgaria’s legal
and historic background. Magistrats Européens pour la Démocratie et les
Libertés have already raised
concern regarding the powers and
political dependencies of the Commission for Confiscation (now renamed
Anti-Corruption Commission) which is the main agency responsible for
confiscation of assets in Bulgaria. Despite its great powers, there are no
explicit rules regarding its control.
The same issue applies regarding the Bulgarian prosecution authorities due to their vertical structure lacking checks and balances – an issue regularly raised by the ECtHR and the Council of Europe. Anyone could become accused upon the unilateral decision of a prosecutor who has excessive powers. In that regard, the Council of Europe has repeatedly asked for Bulgaria to reform its model of the Prosecution Office, which has not been reformed since communist times. At the same time, the Prosecution Office is in charge to open an investigation and to inform the Commission for Confiscation, which can start its own proceedings.
In that environment, it is very doubtful that AG Sharpston’s analysis will help Bulgarian courts in applying basic EU principles and values. It is more likely that her Opinion will be seen as a carte blanche for the unbridled application of the “civil” confiscation procedure against political opponents. In this regard, AG Sharpston seems to forget that the legal interpretation of EU Law should remain teleological and integrative. Her Opinion, while expertly written, is falling in the trap of technicalities instead of focusing on principles such as the presumption of innocence. Hopefully, the Court will insist on these principles at the heart of the EU.