CEDH · CASELAW;CLIN;ENG — 23 juillet 2009

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France - 1946/06 Judgment 23.7.2009 [Section V] Article 1 of Protocol No. 1 Article 1 para. 2 of Protocol No. 1 Control of the use of property Confiscation by customs with no recourse for bona fide owner whose goods were used to conceal fraud by third parties: violation   Facts : The applicant company, a forwarding agent, commissioned the company M. to transport a shipment of 276 boxes of dolls from Spain to the United Kingdom. In 1998 the French customs authorities searched the lorry carrying the consignment, the driver of which was a British national. Amongst the boxes of toys, they found 17 boxes of cannabis resin which, together, weighed over 500   kilos. The 276 boxes of dolls were seized under the Customs Code on the grounds that they had served to conceal the fraud. The applicant company applied to the customs authorities to have its merchandise released, only to be told that the release of seized goods was subject to the provision of a bank guarantee or the payment of a deposit. The criminal court found the lorry driver guilty of transporting, importing and trafficking in drugs and sentenced him to, inter alia , three years’ imprisonment and a customs fine equal to the value of the drugs seized. It also ordered the confiscation of the drugs, as well as the 276 boxes of dolls, which had “evidently served to conceal the fraud because the boxes of drugs had been hidden amongst them”. The court also allowed the applicant company’s application to join the proceedings as a civil party and ordered the lorry driver to pay it damages. The company’s request to have its merchandise returned to it was rejected. The court of appeal modified the sentence imposed by the lower court concerning the seizure of the 276 boxes of dolls and ordered the customs authorities to return them and to pay the applicant company compensation in the amount of 1% per month of the value of the goods wrongfully seized, calculated from 1998 until the effective return of the goods to their owner. In 2000 the dolls were returned to the applicant company and the customs authorities paid the stipulated compensation. The Court of Cassation quashed the appeal court’s judgment and referred the case to another court of appeal, which upheld the judgment of the criminal court in so far as it had validated the seizure of the 276 boxes of dolls and ordered them to be confiscated and handed over to the customs authorities. The applicant company appealed on points of law. The Court of Cassation dismissed the appeal, finding that in sentencing the applicant company, after the goods had been returned to it, to pay a sum in lieu of confiscation of the merchandise, the appeal court had stated that the confiscation was a charge against property, intended to indemnify the Treasury for the loss suffered as a result of the offence, and that under the Customs Code confiscated items could not be reclaimed by their owner. Law : The goods had been confiscated under the Customs Code, which stipulated that “confiscated items could not be claimed by their owners”. Furthermore, the release of the merchandise had been conditional on a bank guarantee or the payment of a deposit. Following an initial, favourable decision, the applicant company had been sentenced by the second court of appeal to pay a sum “corresponding to the value of the goods at the time they were seized, in lieu of confiscation” of the goods. This amounted to an effective deprivation of property and not just a temporary measure of seizure and restitution against payment. In addition, the Government’s report concerning the lack of a remedy enabling the owner to apply to recover its property by demonstrating its good faith suggested that confiscation meant the outright transfer of ownership of the property and not a temporary restriction on its use.However, although there had been a transfer of ownership, the confiscation of property did not necessarily fall within the scope of the second sentence of the first paragraph of Article 1 of Protocol No. 1. The applicable legislation showed that the confiscation of the merchandise that had served to commit the fraud had pursued the legitimate aims of combating international drug-trafficking and making owners more responsible in their choice of transporters, which the parties did not dispute. As such, the interference concerned the control of the use of property. While confiscation could be considered to have been provided for by law and to have pursued the legitimate aim of combating international drug-trafficking, the argument that it was a purely preventive measure intended to indemnify the Treasury did not appear relevant. That purpose had already been served by the sentencing of the offender to a large fine. Furthermore, the confiscation of the merchandise that had served to conceal the fraud appeared to be a harsh penalty when, as in this case, the merchandise concerned did not consist of dangerous or prohibited substances. As to the possibility for a bona fide owner to seek redress in such a situation, it is limited by law to an action against the principal offender. The problem was therefore a general legislative issue. However, in view of the size of the fines offenders were made to pay to the customs authorities, the preferred creditor under French law, and the risk of insolvency of the offenders, that remedy could not be considered to afford this category of owners a reasonable opportunity of putting their case to the responsible authorities. The applicant company had thus been deprived of its property then, after its property had been returned, sentenced to pay a sum equal to the value of the property, without having any effective remedy against the interference, even though the courts had acknowledged its good faith. French law did provide for such a remedy, however, for bona fide owners of means of transport. Consequently, the interference with the applicant company’s peaceful enjoyment of its possessions had not struck the requisite fair balance between the demands of the general interests of the community and the requirements of the protection of the individual’s fundamental rights, as there had been no direct means of remedying it. The introduction of the type of exceptions provided for in other cases under French law where the owner’s good faith was not in dispute would not harm the interests of the State. Conclusion : violation (unanimously). Article 41 – EUR 15,000 for pecuniary damage.   © Council of Europe/European Court of Human Rights This summary by the Registry does not bind the Court. Click here for the Case-Law Information Notes