CEDH · CASELAW;JUDGMENTS;CHAMBER;ENG — 13 juillet 2021

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vertical-align:top } .sEDC5336B { margin-top:0pt; margin-bottom:0pt; page-break-inside:avoid; page-break-after:avoid; font-size:12pt }     FOURTH SECTION CASE OF TODOROV AND OTHERS v. BULGARIA (Applications nos. 50705/11 and 6 others)   JUDGMENT   Art 1 P1 • Peaceful enjoyment of possessions • Individual, reasoned assessment required to counterbalance deficiencies in legislation on forfeiture of crime proceeds • Domestic courts to provide particulars of the criminal conduct and show in reasoned manner that assets could have been the proceeds of crime • General deference to domestic courts’ assessment unless arbitrary or manifestly unreasonable • Disproportionate interference where no effort made to justify causal link, assess value of assets, and justify any finding of further offences • Proportionate interference where such efforts made, relevant Supreme Court Interpretative Decision applied, and conclusions neither arbitrary nor manifestly unreasonable STRASBOURG 13 July 2021 FINAL   13/10/2021   This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision. In the case of Todorov and Others v. Bulgaria, The European Court of Human Rights (Fourth Section), sitting as a Chamber composed of:   Tim Eicke, President,   Yonko Grozev,   Faris Vehabović,   Iulia Antoanella Motoc,   Armen Harutyunyan,   Gabriele Kucsko-Stadlmayer,   Ana Maria Guerra Martins, judges, and Ilse Freiwirth, Deputy Section Registrar, Having regard to: The seven applications against the Republic of Bulgaria lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by fourteen Bulgarian nationals, whose names and further details are indicated in the appendix (“the applicants”), on the various dates also indicated in the appendix; the fact that the applicant Ms Emilia Ruseva Zhekova passed away on 20   July 2018 and that her heirs (her husband and sons) expressed the wish to pursue the case in her stead; the decision to give notice to the Bulgarian Government (“the   Government”) of the complaints concerning the forfeiture of the applicants’ property presumed to be proceeds of crime and to declare inadmissible the remainder of the applications; the parties’ observations; Having deliberated in private on 15 June 2021, Delivers the following judgment, which was adopted on that date: INTRODUCTION 1.     The cases concern the forfeiture of alleged proceeds of crime. The applicants’ complaints mainly concern Article 1 of Protocol No. 1 to the Convention. THE FACTS 2.     The applicants were represented by lawyers, whose names and places of practice are indicated in the appendix. 3.     The Government were represented by their Agents, Ms M. Dimova, Ms I. Stancheva-Chinova and Ms R. Nikolova, of the Ministry of Justice. 4.     The facts, as submitted by the parties, may be summarised as follows. application no. 50705/11 – Todorov and Others v.   BULGARIA 5.     Mr Valeri Iliev Todorov (“the first applicant”) and Ms Vera Ilieva Todorova (“the second applicant”) are spouses. Mr Iliya Ivanov Todorov and Ms Galya Tsvetanova Ivanova (“the third and fourth applicants”) are the first applicant’s parents. 6 .     By a judgment of the Pleven Regional Court of 20 October 2002, which became final on 1 December 2004, the first applicant was convicted of unlawful deprivation of liberty of another person, committed between 5 and 9 September 1993, and attempted extortion. He received a suspended prison sentence. 7 .     Since the offence of extortion fell within the scope of the Forfeiture of Proceeds of Crime Act 2005 (hereinafter “the 2005 Act”, see paragraph 90 below), in 2007 the Commission for Uncovering Proceeds of Crime (hereinafter “the Commission”, see paragraph 92 below) filed a forfeiture application with the Vratsa Regional Court. It sought the confiscation of a number of assets of the first and second applicants (their family home was expressly excluded from the list), and a plot of land and house which the first applicant had bought in 1993 and gifted to his father, the third applicant, in 2003. 8.     The forfeiture application was the result of checks and verifications by the Commission of the first and second applicants’ income and expenditure between 1 January 1993 and 31 December 2005. 9 .     In a judgment of 1 April 2009 the Vratsa Regional Court allowed the Commission’s application in part and ordered the forfeiture of the following assets of the first and second applicants: eight immovable properties, including shops, a café and plots of land acquired by the applicants between 2001 and 2005; 99,400 Bulgarian levs (BGN), the equivalent of 50,840   euros (EUR), received by the first and second applicants between 2002 and 2005 from renting out some of these properties; BGN 67,623 (EUR 34,590) received from the sale of flats and cars acquired initially between 2000 and 2002, and company shares; and deposits in bank accounts. The total value of the forfeited assets was BGN 1,752,275 (EUR   896,300). 10 .     The court did not order the forfeiture of the plot of land and house which the first applicant had gifted to his father (the third applicant – see paragraph 7 in fine above), finding that the house served as the third and fourth applicants’ home. 11.     Similarly to the other proceedings under the 2005 Act described below, the Vratsa Regional Court examined and compared the first and second applicants’ “lawful” income and their expenditure. Furthermore, as was done in many other cases, for the purpose of comparing values during different periods it converted sums of money into their equivalent in minimum monthly salaries at the relevant time (see, for a more detailed description of that approach, paragraph 109 below). 12 .     As to the first and second applicants, the Vratsa Regional Court established that for the relevant period their expenditure had equalled 11,501.74 minimum monthly salaries. That conclusion was based on an expert report, which the parties had not contested, and in which the values of most of the properties acquired by the applicants had been taken as indicated in the relevant sales documents. An exception was made for one immovable property (discussed under point (v) in paragraph 13 below), for which the domestic court was of the view that the applicants had had to pay market value. 13 .     The Vratsa Regional Court held that during the period under examination the first and second applicants had received a legal income equalling 8,357.78 minimum monthly salaries. It refused to accept as such income the following: (i) BGN 220,000 (EUR 112,000) and 8,000 German marks (DEM) which the first applicant’s parents had allegedly given him in 1993 and 2002; while the defendants had submitted contracts of gift, they had not shown when these documents had been drawn up or provided other sufficient evidence of the gifts; (ii) BGN 420,500 (EUR 215,000) which the third applicant had allegedly taken as a bank loan and given to his son; once again, this had not been proven; (iii) loans which the first applicant had allegedly received from private individuals; this had not been sufficiently proven; (iv) sums which the first applicant had allegedly brought to Bulgaria in 1990 and 1991 after having worked abroad; while he had submitted customs declarations showing that he had had this money with him, there was no evidence as to its source; (v) about BGN 250,000 (EUR   128,000), part of a bank loan taken for the purchase of immovable property, which the first applicant had allegedly kept because the price he had paid had been significantly lower; the Vratsa Regional Court considered that the bank loan had equalled the market value of the property in question and that the first applicant had paid that price and had not kept any part of the sum borrowed for himself. 14 .     The court thus concluded that the first and second applicants’ expenditure during the period under examination had significantly exceeded their legal income. It calculated that, with their daily and other expenses taken into account, the applicants had disposed with the equivalent of 4,004.15 minimum monthly salaries to acquire assets – a sum which was largely insufficient for that end. It could thus reasonably be presumed that the assets acquired by them were the proceeds of crime. The applicants’ arguments as to the absence of a causal link between those assets and the offences of which the first applicant had been convicted were without merit. 15.     In a judgment of 3 August 2010 the Sofia Court of Appeal upheld the lower court’s judgment. 16.     In a decision of 12 May 2011 the Supreme Court of Cassation (hereinafter “the Supreme Court”) accepted for examination an appeal on points of law brought by the Commission contesting the lower courts’ refusal to order the forfeiture of the third and fourth applicants’ home. 17 .     In a final judgment of 3 January 2012 the Supreme Court ordered the forfeiture of that property. It noted that no evidence had been gathered to show that the house in question was the third and fourth applicants’ only home, since the third applicant owned other immovable properties. The house in question had to be forfeited, as under section 8 of the 2005 Act (see paragraph 97 below) it was presumed that the third and fourth applicants had known that it had been acquired with income derived from criminal activity. application no. 11340/12 – Gaich v. BULGARIA 18 .     In the early 1990s Ms Zhivka Dimitrova Gaich (“the first applicant”) and her husband, Mr Miroljub Gajic (who passed away in 2014) registered several companies. Through them they operated a deposit-taking scheme, attracting investors against the promise of high returns. By 1995 their companies had accumulated about 1,700,000,000 old Bulgarian levs (BGL) – according to the Government, a sum equivalent to 615,960 minimum monthly salaries at the time, or currently about BGN 345,000,000 (EUR   176,000,000). 19 .     The scheme eventually fell apart, with the majority of the investors being unable to receive their money back. Mr Gajic was eventually convicted of aggravated fraud, aggravated embezzlement and tax evasion in relation to these events. 20 .     By a judgment of the Kavarna District Court of 20 January 2005, which became final on 10 November 2006, the first applicant was convicted of embezzlement and received a suspended one-year prison sentence. In 2003 she had appropriated BGN 42,172, the equivalent of about EUR   21,600, from one of the above-mentioned companies owned by her and Mr Gajic. The company in question had been in liquidation and thus managed by a trustee, and the first applicant, without having the necessary authority, had sold one of its immovable properties to a third party. She had transferred the money received to another company partly owned by her and Mr Gajic. The sale had subsequently been invalidated and the sum of money returned to its owner. 21 .     Since the offence of which the first applicant had been convicted fell within the scope of the 2005 Act, in 2008 the Commission filed an application with the Dobrich Regional Court seeking the forfeiture of assets of the first applicant and Mr Gajic, as well as assets of their daughter, Ms   Zoritsa Mirolyubova Gaich (“the second applicant”). 22 .     The assets in question were: a plot of land with a house in Kavarna bought by the first applicant and Mr Gajic in 1994; another plot of land in Kavarna bought in 1995; a flat and a garage in Dobrich acquired in 1994 and 1996 respectively; a car bought in 1993; sums of money received by the first applicant and Mr Gajic from the sale of other properties initially acquired between 1992 and 1999; and sums of money placed in bank accounts, including those in the second applicant’s name. According to the Commission, the value of the above-mentioned assets totalled BGN   2,138,805 (EUR 1,094,000). 23 .     The forfeiture application was the result of checks and verifications by the Commission of the income and expenditure of the first applicant and Mr Gajic between 1986 (when the first applicant had turned 18) and 2007. 24 .     In a judgment of 13 October 2009 the Dobrich Regional Court allowed the application, ordering the forfeiture of all the above-mentioned assets. 25 .     On the basis of the documents presented by the parties, it established that the legal income of the first applicant and Mr Gajic during the period under examination had been the equivalent of 341.47 minimum monthly salaries. It refused to accept as such income the sum of DEM 200,000, which Mr Gajic, a Serbian national, claimed to have brought with him on arriving in Bulgaria in 1990, as this claim had not been supported by any written evidence (such as a customs declaration) and witness evidence could not be used to prove it. 26 .     During the period under examination the first applicant and Mr Gajic had acquired property worth more than BGN 3,146,300 (EUR 1,610,000). That amount was reached after the Dobrich Regional Court took into account the market values of the properties acquired by them and not the values indicated in the sales documents. The defendants’ total expenditure during the period under examination was thus the equivalent of 4,545.73 minimum monthly salaries. 27 .     Since the applicants and Mr Gajic had not proven such a significant legal income, in view of the presumption contained in section 4(1) of the 2005 Act (see paragraph 96 below) the assets for which forfeiture was being sought had to be considered proceeds of crime. 28 .     Following an appeal by the applicants and Mr Gajic, on 9 June 2010 the Varna Court of Appeal upheld the lower court’s judgment, confirming its conclusions. It reiterated in particular that the applicants and Mr Gajic had not established “legal income in the amount spent by them to acquire assets”, and that the 2005 Act did not require that a direct causal link be established between the properties to be forfeited and the defendant’s criminal activity, since the presumption contained in section 4(1) sufficed. 29 .     The applicants and Mr Gajic lodged an appeal on points of law, which the Supreme Court refused to accept for cassation review in a final decision of 16 August 2011. 30 .     It eventually turned out that some of the properties to be forfeited had already been sold to third parties in earlier enforcement proceedings against the first applicant and Mr Gajic. Thus, the only immovable properties actually forfeited in the procedure under the 2005 Act were the flat in Dobrich where the applicants and Mr Gajic lived and a share of the plot of land and house in Kavarna. In September 2014 the flat was put up for auction by the National Revenue Agency and sold to a third party. 31 .     None of the forfeited sums of money have been paid by the applicants or the late Mr Gajic to the State. application no. 26221/12 – Barov v. BULGARIA 32 .     In 1995 criminal proceedings were opened against the applicant (Mr   Petar Milkov Barov) on suspicion that he had been in unlawful possession of a large quantity of firearms and had, together several other individuals, committed a series of thefts and robberies in 1994 and 1995, some of which had resulted in injuries and in one case even the death of the victim. The applicant remained in pre-trial detention from 1995 to 2001. He subsequently entered into a plea agreement with the prosecution authorities, admitting that he had committed the offences in question and accepting a prison sentence equalling the duration of his pre-trial detention. The agreement was approved on 6 October 2006 by the Lovech Regional Court, which noted, in particular, that all pecuniary damage stemming from the offences committed by the applicant had been repaid. 33 .     Since the offences of which the applicant had been convicted fell within the scope of the 2005 Act, in April 2009 the Commission filed an application with the Gabrovo Regional Court seeking the forfeiture of the following assets: two plots of land with an industrial building and outbuildings, bought by the applicant in 2007; two other plots of land bought in 2008; a car and motorcycle bought in 2006; and money received by the applicant from the sale of another car, bought by him in 2005 and sold to a third party in 2006. 34.     The forfeiture application was the result of checks and verifications by the Commission of the applicant’s income and expenditure between 10   May 1987 (when he had turned 18) and 1 January 2009. 35 .     In a judgment of 9 April 2010 the Gabrovo Regional Court allowed the application and ordered the forfeiture of the above-mentioned assets, finding that the preconditions of the 2005 Act had been met. Firstly, it noted that the applicant had been convicted of offences referred to in section 3(1) of the Act (see paragraph 95 below). Secondly, during the period under examination he had acquired assets of “significant value”. Thirdly, a reasonable assumption could be made that those assets were the proceeds of crime. In this regard, it was not necessary to establish a causal link between the assets in question and the offences committed by the applicant: this was not a requirement of the 2005 Act which, in section 4(1), contained a presumption in that regard (see paragraph 96 below). 36 .     The Gabrovo Regional Court calculated that during the period under examination the applicant’s income for which a legal source had been shown to exist had amounted to BGN 60,801 (EUR 31,100), or the equivalent of 364.5 minimum monthly salaries. This came from his salary, the sale of property and from loans from banks and other institutions. The applicant had not proven that he had received any other income, most notably a loan from a friend (witness evidence could not be used to prove it; moreover, he remained liable to repay it) and remuneration under a commission contract (the contract submitted by the applicant had not been notarised, as required, and did not bear a valid date; moreover, no proof existed that he had actually received such remuneration). 37 .     For the period in question the applicant’s expenditure amounted to BGN 182,270 (EUR 92,230), or the equivalent of 1,122.2 minimum monthly salaries. That amount was reached after the Gabrovo Regional Court notably took into account the market values of the properties bought by the applicant and not the values indicated in the notarial deeds and sales contracts, which were considerably lower. Thus, the applicant’s expenditure exceeded his lawful income by 757.70 minimum monthly salaries, which meant that the Commission’s forfeiture application had to be allowed. 38 .     On 8 November 2010 the above-mentioned judgment was mostly upheld by the Veliko Tarnovo Court of Appeal. 39 .     Despite upholding the lower court’s conclusion that the applicant’s expenditure significantly exceeded his legal income, which justified the forfeiture, the Court of Appeal recalculated that income and expenditure. It thus concluded that the applicant’s legal income for the period under examination had totalled BGN 58,030 (EUR 30,000) and that his expenditure had totalled BGN 167,192 (EUR 85,520). That discrepancy between the applicant’s legal income and expenditure justified the forfeiture of most of the above-mentioned assets. Only the motorcycle bought by the applicant in 2006 (see paragraph 33 above) was not to be forfeited, since it had been transferred to a third party, but the applicant remained liable to pay the price he had received for it. 40 .     The applicant lodged an appeal on points of law. In a final decision of 24 October 2011 the Supreme Court refused to accept it for cassation review. application no. 71694/12 – Zhekovi V. BULGARIA 41 .     Mr Zhivko Zhekov Zhekov (“the first applicant”) and Ms Emilia Ruseva Zhekova (“the second applicant”, she passed away in 2018 – see appendix) were spouses, and Mr Zheko Zhivkov Zhekov (“the third applicant”) is the first applicant’s son from a previous marriage. 42 .     By a judgment of the Plovdiv Regional Court of 24 July 2008 the first and second applicants were convicted of aggravated document forgery, preparation to commit forgery and possession of the relevant equipment and materials. The first applicant was also convicted for forming and leading a criminal group, and the second applicant for being a member of that group. It was established that between January and June 2007 the two applicants and their accomplices had created false identity papers and other official documents and had forged existing documents, including those issued in other countries, with the aim of obtaining financial gain. 43 .     In 2008 the Commission opened proceedings under the 2005 Act against the first applicant, and in early 2009 filed an application with the Plovdiv Regional Court seeking the forfeiture of the following assets: a flat in Plovdiv bought by the first applicant in 2002; another flat in Plovdiv bought for the third applicant by his mother in 2007; two cars bought by the first applicant in 2002 and 2003; EUR 14,400 and 730 United States dollars (USD) in cash seized from the first and second applicants’ home during a search in 2007; sums deposited in bank accounts in the names of the first and second applicants. 44.     The forfeiture application was the result of checks and verifications by the Commission of the first applicant’s financial situation between 1   January 1985 and 31 December 2008, and that of the second applicant between 1 March 1997 and 31 December 2008. 45 .     In a judgment of 5 August 2010 the Plovdiv Regional Court dismissed the forfeiture application. It found that while the first applicant had indeed been convicted of an offence falling within the scope of the 2005   Act and that, moreover, during the period under examination the three applicants had acquired assets of considerable value, the preconditions for forfeiture had not been fulfilled, because the applicants had in fact provided proof of sufficient income from legal sources to acquire such assets. These included the first applicant’s disability pension, sums given to the second applicant by her parents, in whose farming business she had been involved, sums gifted to the first and second applicant at the time of their wedding and, most significantly, sums given to the three applicants by the first applicant’s father, who had inherited a considerable number of assets from his own father. 46 .     Following an appeal by the Commission, on 18 February 2011 the Plovdiv Court of Appeal upheld the above-mentioned judgment. It confirmed the Plovdiv Regional Court’s reasoning, adding, as to the second applicant’s involvement in her parents’ farming business, that even if the parents had not been registered as farmers and had not paid their taxes, this did not in itself mean that any income received by the second applicant was illegal. 47.     The Commission lodged an appeal on points of law. In a decision of 13   December 2011 the Supreme Court accepted it for cassation review and in a final judgment of 4 May 2012 allowed the forfeiture application, ordering the forfeiture of all the above-mentioned assets. 48.     The Supreme Court noted that the lower courts had accepted as evidence documents concerning the inheritance received by the first applicant’s father, even though they had been submitted by the applicants after the relevant time-limit for doing so had expired. Accordingly, that evidence was considered inadmissible and had to be excluded from the case file. 49 .     On the basis of the remaining evidence concerning that inheritance – in particular the witness testimony of family members, which was contradictory and also unreliable given their interest in the outcome of the case – it could not be concluded that the first applicant’s father had actually been able to provide the money necessary for the acquisition of the disputed assets, or for the applicants’ daily expenditure. As to the income allegedly received from the farming business of the second applicant’s parents and the monetary gifts made at the time of the first and second applicant’s wedding, these had not been proven by any documents but, again, the applicants had relied on the witness testimony of family members. 50 .     As to the third applicant’s flat in Plovdiv (see paragraph 43 above), this had been bought in 2004 by the first applicant’s parents who in 2007 had sold it to their grandson. He had been represented in the sale by his mother (the first applicant’s first wife). However, the applicants had not shown that the third applicant’s mother had had sufficient means to buy the flat, since she had had no declared income between 1997 and 2008. The applicants had not claimed that the sales contract had been fictitious, concealing a gift; on the contrary, the third applicant had argued that his mother had paid the full price. 51 .     Accordingly, there was no evidence that during the period under examination the applicants had had sufficient legal income to acquire the assets for which forfeiture was sought, which meant that those assets could reasonably be assumed to be the proceeds of crime. 52 .     It subsequently became clear that the EUR 14,400 and USD 730 seized from the first and second applicants’ home (see paragraph 43 above) had already been confiscated in the course of the criminal proceedings against them. The Government submitted a statement by the National Revenue Agency dated 8 July 2019 explaining that it had informed the Plovdiv Regional Court and the Supreme Court of this, and that of the two confiscations only the first, ordered in the criminal proceedings, had been enforced. 53 .     The two forfeited flats were sold to third parties by the National Revenue Agency in 2014. As to the forfeited cars, one of them was sent to a scrapyard by the first applicant and dismantled, while the other was sold by the National Revenue Agency in 2015. The Agency also received BGN   16,425 (EUR 8,400) which had been held in the first and second applicants’ bank accounts. application no. 44845/15 – Rusev V. BULGARIA 54 .     By a judgment of the Omurtag District Court of 13 June 2012 the applicant (Mr Yuliyan Vasilev Rusev) was convicted of illegal logging, on the grounds that in October 2009 he had had, without the relevant permit, timber valued at BGN 628 (EUR 321) harvested and transported by employees of his company. The conviction was upheld by the Targovishte Regional Court on 4 September 2012 and the Supreme Court on 4 March 2013. The applicant received a six-month suspended prison sentence and was fined. 55 .     Since the offence of which the applicant had been convicted fell within the scope of the 2005 Act, in November 2012 the Commission filed an application with the Dobrich Regional Court seeking the forfeiture of his assets. The application was the result of checks and verifications of the applicant’s income and expenditure between 16 April 1992 (when he had turned 18) and 28 November 2012. 56 .     In a judgment of 29 November 2013 the Targovishte Regional Court allowed the application in part. It ordered the forfeiture of some of the assets indicated in the Commission’s application, namely those whose value was equal to the difference between the applicant’s expenditure and established lawful income (see paragraph 58 below), and dismissed the remainder of the application. It thus ordered the forfeiture of the following assets: seven plots of land bought by the applicant between 2006 and 2011, one of which had a house built on it; BGN 17,473 (EUR 9,000) received by the applicant from the sale of thirteen other plots of land, the majority of which were initially acquired by him in 2006; and a car bought by the applicant in 2011. 57 .     In calculating the applicant’s legal income during the period under examination, the Targovishte Regional Court refused to accept the following: (i) BGN 22,300 (EUR 11,400) which someone had allegedly loaned the applicant in 2006 and 2007, as this had not been sufficiently proven; (ii) BGN 26,000 (EUR 13,300) which the applicant’s grandmother had allegedly gifted to him on an unspecified date after the sale of a property; even though it was established that she had received such a sum, the gift remained unproven, the only evidence in that regard being her oral statements; it was also unlikely that she would give all the money to her grandson, since she had other close relatives; (iii) income from logging allegedly received between 2005 and 2007; the applicant had submitted contracts for the sale of timber, but had not shown that these documents had actually been concluded at the relevant time, or what profit he had made; at the time, he had not declared any such profit to the tax authorities; (iv)   BGN   110,000 (EUR 56,260) which the applicant had declared as income received in 2007 from the activities of a company partially owned by him, in a tax declaration submitted at the end of 2012; according to the court, there was no evidence that the applicant had actually received that income, and the tax declaration, submitted after the initiation of the forfeiture proceedings, was evidently aimed at being used as evidence in them. 58 .     After calculating the applicant’s expenditure during the period under examination, the Targovishte Regional Court concluded that it had exceeded the applicants’ legal income by BGN 53,382 (EUR 27,300), the equivalent of 337.9 minimum monthly salaries. This warranted the forfeiture of assets equalling the same number of minimum monthly salaries, namely the ones mentioned in paragraph 56 above. 59 .     The Targovishte Regional Court was of the view that the assets to be forfeited had been acquired with income derived from criminal activity and were thus the proceeds of crime. In that regard, it referred to the following: until 1998 the applicant had had no legal income; between 2000 and 2005 he had worked for a local forestry authority and in 2006 had once again had no legal income; it had been precisely in 2006 and 2007 that he had bought numerous properties, some of which he had subsequently transferred to third parties; he had been convicted of illegal logging (see paragraph 54 above) and his whole career had been in forestry and logging. 60 .     Following an appeal by the applicant, on 9 July 2014 the Targovishte Regional Court’s judgment was upheld by the Varna Court of Appeal. Referring to the Supreme Court’s Interpretative Decision of 30 June 2014 (see paragraphs 105-106 below), it pointed out that the causal link between the assets to be forfeited and the applicant’s criminal activity could be indirect, and considered that such an indirect link had been established, for the same reasons as those put forward by the Targovishte Regional Court. Since this concerned criminal activity, it was irrelevant that the object of the specific offence of which the applicant had been convicted had been of relatively low value. The Varna Court of Appeal confirmed the Regional Court’s findings (see paragraph 59 above) that the applicant had not had any other legal income. Referring to a further expert report ordered by it, the Varna Court of Appeal found that the applicant’s expenditure during the period under examination had exceeded his legal income by BGN 61,446 (EUR 31,340), the equivalent of 451.73 minimum monthly salaries. 61 .     The applicant lodged an appeal on points of law, which the Supreme Court refused to accept for cassation review in a final decision of 5 March 2015. It considered in particular that the lower courts had correctly applied the standard set in the Interpretative Decision of 30 June 2014. 62 .     Most of the immovable properties to be forfeited were sold by the National Revenue Agency to third parties in 2016 and 2017. One of them, which had been subject to a mortgage, was put up for auction in enforcement proceedings brought against the applicant by a private party. The applicant’s car for which forfeiture was also ordered was stolen in 2015. 63.     The sums of money the applicant was ordered to pay in the forfeiture proceedings – BGN 21,309 (EUR 10,900) – have not been paid. application no. 17238/16 – Katsarov V. BULGARIA 64 .     On an unspecified date the applicant (Mr Kiril Hristov Katsarov) was charged with illegal possession of drugs, seized from his cars and flat on 25 August 2000 and 18 August 2001. The total value of the drugs seized on those occasions was about BGN 650 – the equivalent of EUR 332. 65 .     In 2007 the applicant entered into a plea agreement with the prosecution authorities, admitting to having committed three offences of illegal possession of drugs, including with intent to sell. He was given a prison sentence and ordered to pay a fine. The plea agreement was approved on 15 January 2008 by the Burgas Regional Court. 66 .     Since the offences of which the applicant had been convicted fell within the scope of the 2005 Act, in early 2010 the Commission filed an application with the Sofia City Court seeking the forfeiture of the following assets: a flat in Sofia bought by the applicant in 2008, under a preliminary contract concluded in 2002; a sum equivalent to USD 20,000 which the applicant had paid in 2002 upon the conclusion of the preliminary contract in question; two cars; and money received by the applicant from the sale of two other cars. 67.     The forfeiture application was the result of checks and verifications by the Commission of the applicant’s income and expenditure for the period from 20 October 1990 (when he had turned 18) to 31 December 2008. 68 .     The forfeiture application was allowed in full by the Sofia City Court in a judgment given on 12 March 2014. The court found that during the period under examination the applicant had had a rather small income from legal sources, and had only received a salary between 2005 and 2008. His income had thus equalled 222.58 minimum monthly salaries, whereas his expenditure had been equivalent to 3,262.63 minimum monthly salaries. The Sofia City Court did not accept the applicant’s claim that his parents had provided for him, noting that their own income had been rather low. As to expenditure, the court took into account the market values of the flat and cars acquired by the applicant, and not the values indicated in the respective sales documents. 69 .     The Sofia City Court also pointed out that it did not have to establish a causal link between the assets for which forfeiture was sought and the specific offences of which the applicant had been convicted, but a link between these assets and his “criminal activity”. Such a link was presumed under the 2005 Act, as no legal sources of income had been shown to exist equivalent to the applicant’s expenditure. As to the existence of criminal activity, it was significant that the applicant had been convicted on three counts of illegal possession of drugs, including with intent to sell (see paragraphs 64 and 65 above). This was, moreover, an activity “allowing for significant financial gain”. 70 .     Following an appeal by the applicant, on 30 January 2015 the Sofia Court of Appeal upheld the lower court’s judgment in part, dismissing the forfeiture application in relation to the USD 20,000 paid by the applicant in 2002 (see paragraph 66 above) on the grounds that this had in fact been the price of the forfeited flat. It thus accepted the applicant’s claim, corroborated by the sellers’ statements, that this had been the real price of the flat. It dismissed the Commission’s argument that what had to be taken into account in the calculation of his expenditure was the property’s market value. 71 .     The Sofia Court of Appeal confirmed the lower court’s conclusion that there was no evidence that the applicant had received money from his parents (see paragraph 68 above). They had not had income permitting them to provide for him, and even if they had, there was no evidence that they had done so. The witnesses brought by the applicant – his mother and sister – in addition to having an interest in the outcome of the case, had made contradictory statements. The applicant’s mother had stated that she had withdrawn the money for the purchase of the applicant’s flat from a bank, but had not corroborated this with any documents. Nor had it been proven that the applicant had received, as also claimed by his mother and sister, income from working as a taxi driver and in his parents’ vegetable garden. 72 .     The Sofia Court of Appeal noted that between 1990 and 2004 the applicant had had no income from a legal source, apart from the money received from the sale of two cars, and had only received a salary from 2005 to 2009. During the latter period he had also received money from the sale of land owned by the family. His income for the whole period under examination had thus amounted to the equivalent of 222.58 minimum monthly salaries, whereas his expenditure, recalculated to take into account the price of the flat as established by the Court of Appeal (see paragraph 70 above), had amounted to the equivalent of 2,971.94 minimum monthly salaries. 73 .     As to the existence of a causal link between the applicant’s criminal activity and the assets for which forfeiture was sought, the Sofia Court of Appeal pointed out that the criminal activity in question was capable of generating income. The applicant had admitted to possession of drugs with intent to sell (see paragraph 65 above), and had thus not kept them for his own personal use. Furthermore, he had paid for his flat when concluding a preliminary contract in 2002 (see paragraph 66 above), that is, at around the same time he had committed the offences of which he had been convicted. Thus, as he had had no legal income to acquire the assets to be forfeited, they had to be considered the proceeds of crime. 74 .     The applicant lodged an appeal on points of law, which the Supreme Court, in a decision of 23 September 2015, refused to accept for cassation review. Referring to its Interpretative Decision of 30 June 2014 (see paragraphs 105-106 below), it pointed out that the Sofia Court of Appeal had fully complied with the standard set therein. 75 .     The applicant’s flat was sold by the National Revenue Agency to a third party in 2017. One of the forfeited cars could not be found and the other was sent to a scrapyard. The sums of money the applicant was ordered to pay in the forfeiture proceedings have not been paid. application no. 63214/16 – Dimitrov V. BULGARIA 76.     The applicant (Mr Dimitar Genchev Dimitrov) exercised commercial activity as a sole trader. 77 .     In 2002, after a financial audit, the tax authorities ordered him to pay BGN 597,154 (EUR 305,370) in unpaid taxes. Even though enforcement proceedings were opened against him in 2002, no money was collected. In 2015 the National Revenue Agency declared that the applicant’s obligation under the 2002 tax audit had become time-barred. 78 .     In the meantime, the applicant was indicted based on the same facts and brought to court on tax evasion charges. In a judgment of 12 May 2010, which became final on 28 May 2010, the Varna Regional Court convicted him. It established that he had given false information to the authorities in several tax declarations submitted between December 2000 and May 2001, thus evading the payment of value-added tax related to his commercial activity amounting to BGN 294,897 (EUR 150,842). 79 .     Since the offence of which the applicant had been convicted fell within the scope of the 2005 Act, in July 2011 the Commission filed an application with the Varna Regional Court seeking the forfeiture of his assets. It considered that the amount of taxes the applicant had evaded paying, together with the lack of sufficient legal income, proved the existence of a causal link between the offence of which he had been convicted and the assets in question. 80 .     The forfeiture application was the result of checks and verifications of the financial situation of the applicant for the period from 1 January 1999 to 31 December 2010. 81 .     In a judgment of 24 February 2015 the Varna Regional Court dismissed the application. It reached the conclusion that the Commission had failed to prove the existence of a causal link between the offence the applicant had committed and the assets for which forfeiture was sought and, at the same time, that the applicant had had sufficient legal income to acquire those assets. In the latter regard, the court found, in particular, that the applicant had, as claimed by him, received money from his parents and from his partner and her parents, and that when he had acquired certain immovable propertie