European Court of Human Rights

FIRST SECTION

CASE OF KOSURNYIKOV AND OTHERS v. HUNGARY

(Application no. 59017/14)

JUDGMENT

STRASBOURG

21 January 2021

This judgment is final but it may be subject to editorial revision.

In the case of Kosurnyikov and Others v. Hungary,

The European Court of Human Rights (First Section), sitting as a Committee composed of:

          Alena Poláčková, President,
          Péter Paczolay,
          Gilberto Felici, judges,
and Renata Degener, Deputy Section Registrar,

Having regard to:

the application (no. 59017/14) against Hungary lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by three Hungarian nationals, Mr Igor Kosurnyikov, Ms Simon Katalin Zsuzsanna Kosurnyikovné and Ms Dorottya Natália Kosurnyikov (“the applicants”), on 21 August 2014;

the decision to give notice to the Hungarian Government (“the Government”) of the complaint concerning Article 1 of Protocol No. 1 and to declare inadmissible the remainder of the application;

the parties’ observations;

Having deliberated in private on 16 December 2020,

Delivers the following judgment, which was adopted on that date:

INTRODUCTION

1.  The application concerns the attachment, in criminal proceedings on charges of money laundry, of all the applicant family’s bank accounts. The measure has been in place since 2010.

THE FACTS

2.  The applicants were born in 1954, 1956 and 1987 respectively and live in Budapest. They were represented by Ms A. Falusi, a lawyer practising in Budapest.

3.  The Government were represented by their Agent, Mr Z. Tallódi, of the Ministry of Justice.

4.  The facts of the case, as submitted by the parties, may be summarised as follows.

5.  The City of London Police opened criminal proceedings against a British national on charges of embezzlement and money laundry. On 5 February 2010 the Southwark Crown Court ordered the attachment of the bank accounts where money had been transferred from the defendant’s bank account.

6.  Relying on the European Convention on Cooperation in Criminal Matters, the London Crown Attorney’s Office requested from the Hungarian authorities the attachment of the applicants’ personal bank accounts and the bank account of the companies owned by one of the applicants, all held by Hungarian banks.

7.  On 31 May 2010 the Budapest Central District Court ordered the attachment of the bank accounts. On appeal, the Budapest Regional Court quashed the first-instance decision and remitted the case to the District Court. By its decision of 20 October 2010, the District Court ordered the attachment of the bank accounts anew.

8.  The court established that the offence under investigation in the United Kingdom was also punishable under the Hungarian Criminal Code (section 318). Furthermore, the criminal proceedings were conducted in connection to a criminal offence where forfeiture of property might be applied. It also found that although the amounts on the bank accounts were not in the possession of the defendant but in that of the applicants, it had been transferred from the defendant’s bank account and thus might be subject to forfeiture. Thus, it concluded that the conditions of attachment under section 159 of the Criminal Procedure Code were met.

9.  The court also established that no less stringent measure was applicable, given that one of the bank accounts in question had already been unlawfully emptied and closed, the criminal proceedings ongoing.

10.  This decision was upheld on appeal by the Budapest Regional Court on 15 December 2010.

11.  On 4 November 2013 the applicants requested the discontinuation of the attachment. The request was dismissed by the Buda Central District Court on 24 February 2014. The decision was upheld on appeal by the Budapest High Court on 21 March 2014. Both courts found that their role was not to evaluate how the British prosecution authorities conducted the proceedings.

12.  According to the latest information obtained from the parties on 3 July 2018, the measure is still in place.

THE LAW

I.       ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1 TO THE CONVENTION

13.  The applicants complained that the prolonged application of attachment amounts to an unjustified interference with the property rights, in breach of Article 1 of Protocol No. 1 of the Convention, which provides 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.”

14.  The Government argued that - because the Hungarian authorities only assisted the British ones in the matter - the applicants could, and should, have appealed against the attachment directly before the British authorities. Moreover, the money attached had not been the applicants’ own; rather, it was the proceeds of crime of another person. Either way, the Hungarian authorities’ responsibility under the Convention was limited in that they hardly did more than extending international legal assistance to the British authorities.

15.  The applicants disagreed in general terms.

16.  The Court notes that the Government failed to point to any specific remedies available in Hungarian law which the applicants should have used. It follows that the application cannot be rejected for non–exhaustion of domestic remedies. Furthermore, this complaint is neither manifestly ill‑founded nor inadmissible on any other grounds listed in Article 35 of the Convention.

17.  As to the merits, the Court observed that it was not disputed between the parties that there has been an interference with the applicants’ right to the peaceful enjoyment of their possessions as enshrined in Article 1 of Protocol No. 1. The Court has no reason to hold otherwise. It follows that the provision is applicable in the present case.

18.  The Court reiterates that Article 1 of Protocol No. 1 comprises three rules: the first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property; the second rule, contained in the second sentence of the first paragraph, covers the deprivation of property and subjects it to conditions; the third rule, stated in the second paragraph, recognises that the States are entitled, amongst other things, to control the use of property in accordance with the general interest. The second and third rules, which are concerned with particular instances of interference with the right to peaceful enjoyment of property, must be read in the light of the general principle laid down in the first rule (see, among many other authorities, Hábenczius v. Hungary, no. 44473/06, § 27, 21 October 2014).

19.  The Court notes that the attachment of the applicants’ bank accounts was a provisional measure intended to ensure that assets which appeared to be the instrument of unlawful activities carried out to the detriment of the community could subsequently be confiscated if necessary. The impugned measure, which did not entail a transfer of ownership, thus constituted a control of the use of property within the meaning of the second paragraph of Article 1 of Protocol No. 1. For the Court, it is immaterial, from this perspective, whether the money on these accounts originated from, or was intended for, a third party - there remains the fact that, at the time of the attachment, it was in the applicants’ possession.

20.  The Court reiterates that in order for an interference to be compatible with Article 1 of Protocol No. 1 it must be lawful, be in the general interest and be proportionate, that is, it must strike a “fair balance” between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights. The requisite fair balance will not be struck where the person concerned bears an individual and excessive burden (see, among many other authorities, Hábenczius, cited above, § 29).

21.  In the present case, it was not disputed between the parties that the interference was prescribed by law and in the general interest of the community. However, the applicants argued that the measure was unnecessary and disproportionate, notably given its duration.

22.  The Court notes that the attachment took place in 2010 and has not been lifted ever since. The Government have not pointed to any rule in the domestic law requiring the authorities to discontinue the measure by a certain deadline or after a certain time has elapsed. Indeed, it would appear that the impugned measure can be maintained for an indefinite duration.

23.  These circumstances are sufficient to enable the Court to conclude that the attachment of the applicants’ bank accounts for over ten years constituted an individual and excessive burden on them, upsetting the “fair balance” which should be struck between the protection of the right of property and the requirements of the general interest (see, mutatis mutandis, Hábenczius, cited above, § 36). In this connection, the Court is unable to attribute much relevance to the fact that the measure was applied at the request of the British authorities, since the applicants suffered the direct consequences of the Hungarian authorities’ decisions, for which the respondent State must bear the responsibility under international law.

There has therefore been a violation of Article 1 of Protocol No. 1 to the Convention.

II.    APPLICATION OF ARTICLE 41 OF THE CONVENTION

24.  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.”

25.  On 6 August 2018 and 16 January 2019 the Registry invited the applicants to submit their claims for just satisfaction. However, they did not do so. In these circumstances, the Court is unable to consider the matter (Rule 60 of the Rules of Court).

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

1.      Declares the application admissible;

2.      Holds that there has been a violation of Article 1 of Protocol No. 1 to the Convention.

Done in English, and notified in writing on 21 January 2021, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Renata Degener                                                                    Alena Poláčková
Deputy Registrar                                                                        President

APPENDIX

List of applicants: