CEDH · PRESS;CHAMBERJUDGMENTS;ENG — 3 novembre 2009

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Bosnia and Herzegovina (application no. 27912/02)     STRUCTURAL PROBLEM RELATING TO BOSNIA AND HERZEGOVINA’S REPAYMENT SCHEME FOR FOREIGN CURRENCY DEPOSITED BEFORE THE DISSOLUTION OF YUGOSLAVIA     Violation of Article 1 of Protocol No. 1 (protection of property) to the European Convention on Human Rights   Under Article 41 (just satisfaction) of the Convention, the Court awarded the applicant 5,000 euros (EUR) in respect of non-pecuniary damage and EUR 729 for costs and expenses.   Principal facts   The applicant, Mustafa Suljagic, is a citizen of Bosnia and Herzegovina who was born in 1935. Working abroad in the 1970s and 1980s, he had deposited foreign currency with a bank in Tuzla during the era of the Socialist Federal Republic of Yugoslavia (SFRY).   The bank was nationalised after Bosnia and Herzegovina became independent and subsequently sold to a commercial bank in Slovenia. Following a complaint by the applicant about his inability to withdraw his funds, the Human Rights Commission of Bosnia and Herzegovina in 2005 found the relevant legislation, which did not allow withdrawal of “old” foreign-currency savings but only gave savers the possibility to use their deposits to purchase the state-owned flats in which they lived, to be in breach of the Convention.   In April 2006 the Old Foreign-Currency Savings Act entered into force, providing for the recompense of original deposits. Interest accrued by 1991 was to be calculated at the original rate, whereas interest accrued from January 1992 until 15 April 2006 was to be cancelled and recalculated at an annual rate of 0.5%. The Constitutional Court considered this reduction to be justified given the need to reconstruct the national economy following the war in Bosnia. The assessment of the amounts due to each claimant was to be carried out by verification agencies. Claimants having obtained verification certificates were entitled to a cash payment of up to 1,000 convertible marks (BAM; the equivalent of EUR 500) and any remaining amount was to be reimbursed in government bonds.   However, in the Federation of Bosnia and Herzegovina, one of the administrative entities of the State, bonds due in March 2008 have not yet been issued and the first instalment of the amortisation plan for the bonds was paid almost eight months after it was due.     Complaints, procedure and composition of the Court   The original application was lodged with the European Court of Human Rights on 2 July 2002.   The applicant alleged that the legislation of Bosnia and Herzegovina governing foreign-currency savings deposited before the dissolution of the SFRY failed to strike a fair balance between the public interest and his property rights as guaranteed by Article 1 of Protocol No. 1 to the Convention.   With regard to the 2006 legislation, having come into effect after the application was lodged, the applicant complained in particular that he would receive no cash payment other than the initial BAM 1,000 and that for further cash payments he would have to sell the government bonds at the end of the amortisation period in 2015, most likely for a fraction of their nominal value. He also complained about the low interest rate for the period from 1 January 1992 until 15 April 2006 and maintained that the current legislation lacked guarantees that the necessary funds would indeed be allocated on time.   Judgment was given by a Chamber of seven judges, composed as follows:   Nicolas Bratza (United Kingdom), President, Lech Garlicki (Poland), Giovanni Bonello (Malta), Ljiljana Mijović (Bosnia and Herzegovina), David Thór Björgvinsson (Iceland), Ledi Bianku (Albania), Mihai Poalelungi (Moldova), judges,   and Fatoş Aracı, Deputy Section Registrar.   Decision of the Court   The Court first noted that, notwithstanding the fact that the application had been lodged in 2002, it would limit its analysis to the current legislation on “old” foreign-currency savings.   Concerning the applicant’s complaint about the limited cash payments, the Court observed that in addition to the initial payment, according to the amortisation plan for the government bonds, he was entitled to receive his entire old foreign-currency savings in eight instalments. Given the effects of the war and the ongoing reforms of the economic structure the Court considered that the State could limit access to savings. The Court did not see any reason why the applicant would not be able to sell the bonds for anything near their nominal value. Moreover he was not required to sell them, but could instead opt for the cash payments in eight instalments, one of which he had already received.   Regarding the interest rate for the period from January 1992 to April 2006, the Court took note of the fact that the neighbouring countries, in which similar repayment schemes were set up, had agreed to pay considerably higher interest rates. Nevertheless, the Court did not consider this factor sufficient to render the current legislation contrary to Article 1 of Protocol No. 1, thereby following the argument of the Constitutional Court of Bosnia and Herzegovina regarding the need to reconstruct the national economy following the war.   The Court agreed with the applicant, however, that the implementation of the legislation was unsatisfactory. As a result of the fact that the bonds due in March 2008 had not been issued the applicant was still unable to sell them on the Stock Exchange and thus obtain early cash payments. Moreover there had been a delay in paying the instalments.   Notwithstanding the fact that the “old” foreign currency savings inherited from the SFRY constituted a considerable burden on the successor States, the rule of law underlying the Convention required the Contracting Parties to consistently apply the laws they had enacted. The Court therefore held unanimously that in view of the deficient implementation of the legislation there had been a violation of Article 1 of Protocol No. 1.   The Court moreover unanimously decided to adjourn, for six months from the date on which the judgment becomes final, the proceedings in any cases concerning “old” foreign-currency savings in the Federation of Bosnia and Herzegovina and in the administrative entity of the Brčko District in which the applicants have obtained verification certificates (like the applicant in the present case).   Under Article 46 (binding force and execution of judgments), the Court noted that the case concerned a systemic problem, namely the shortcomings of the repayment scheme for foreign currency deposited before the dissolution of the SFRY. This problem lay behind more than 1,350 similar applications currently pending before the Court.   The Court held unanimously that Bosnia and Herzegovina had to ensure, within six months from the date on which the judgment becomes final, that in the Federation of Bosnia and Herzegovina government bonds are issued, outstanding instalments are paid and that, in the case of late payments of forthcoming instalments, default interest is paid at the statutory rate.   Judge Mijović expressed a concurring opinion, which is annexed to the judgment.   ***   The judgment is available only in English. This press release is a document produced by the Registry. It does not bind the Court. The judgments are available on its website ( http://www.echr.coe.int ).   Press contacts Nina Salomon (tel + 33 (0)3   90 21 49 79) Stefano Piedimonte (tel : + 33 (0)3 90 21 42 04) Tracey Turner-Tretz (tel : + 33 (0)3 88 41 35 30) Kristina Pencheva-Malinowski (tel : + 33 (0)3 88 41 35 70) Céline Menu-Lange (tel : + 33 (0)3 90 21 58 77) Frédéric Dolt (tel : + 33 (0)3 90 21 53 39)   The European Court of Human Rights was set up in Strasbourg by the Council of Europe Member States in 1959 to deal with alleged violations of the 1950 European Convention on Human Rights. [1] Under Article 43 of the Convention, within three months from the date of a Chamber judgment, any party to the case may, in exceptional cases, request that the case be referred to the 17 ‑ member Grand Chamber of the Court. In that event, a panel of five judges considers whether the case raises a serious question affecting the interpretation or application of the Convention or its protocols, or a serious issue of general importance, in which case the Grand Chamber will deliver a final judgment. If no such question or issue arises, the panel will reject the request, at which point the judgment becomes final. Otherwise Chamber judgments become final on the expiry of the three-month period or earlier if the parties declare that they do not intend to make a request to refer.