EHRM, 18-12-2008, nr. 69917/01

On 12 March 1998 the Vienna Regional Criminal Court (Landesgericht für Strafsachen), as an interim measure, ordered the confiscation of the applicant's assets, of a total value of about 80,000,000 Austrian schillings (ATS — approximately 5,800,000 euros), in cash, bearer bonds and a bank account, for the purpose of securing the enforcement of the final forfeiture order of 7 November 1997. It referred to the above request and noted that enforcement proceedings under the Extradition and Legal Assistance Act (Auslieferungs- und Rechtshilfegesetz — ‘the ELAA’) were pending.

The applicant appealed on 26 March 1998, submitting in particular that the Regional Court's decision amounted to an unlawful interference with his right to property, as it lacked a legal basis. Moreover, an enforcement of the forfeiture order for the benefit of the United States was not admissible in Austria as section 64(7) of the ELAA provided that any fines or forfeited assets obtained by executing a foreign decision fell to the Republic of Austria.

Further, the applicant claimed that the final forfeiture order also included ‘substitute assets’, i.e. assets not connected to or derived from criminal activity. Thus the measure requested did not correspond in any way to forfeiture (Verfall) or withdrawal of enrichment (Abschöpfung der Bereicherung) within the meaning of the Austrian Criminal Code (Strafgesetzbuch). In any event these penalties could not be applied in his case, as the relevant provisions had not been in force at the time he committed the offences. Furthermore, he had been convicted of money laundering in the United States, an offence which had not been punishable under Austrian law at the time of its commission.

Relying on section 64(1) of the ELAA, the applicant also argued that the forfeiture proceedings had failed to comply with the requirements of Article 6 of the Convention, since the proceedings had not been public and he had not been heard. Moreover, his defence rights had been violated in the underlying criminal proceedings, his defence lawyer having been caught in a conflict of interests.

Lastly, the applicant claimed that there was a lack of reciprocity as decisions of Austrian courts were not enforceable in the United States.

Meanwhile, on 12 March 1998, the Vienna Regional Criminal Court had made a formal request to the United States authorities to hear the applicant in connection with the request for execution of the final forfeiture order. On 16 April 1998 the United States Department of Justice transmitted the applicant's submissions to the Austrian Ministry of Justice.

On 22 May 1998 the United States Department of Justice addressed a note to the Austrian Ministry of Justice concerning reciprocity in providing legal assistance in forfeiture proceedings. The applicant denies that this note contains assurances of reciprocity.

On 1 August 1998 the Treaty between the Government of the Republic of Austria and the Government of the United States of America on Mutual Legal Assistance in Criminal Matters (‘the 1998 Treaty’) entered into force.

On 12 October 1998 the Vienna Court of Appeal (Oberlandesgericht) dismissed the applicant's appeal against the Regional Court's decision of 12 March 1998.

The Court of Appeal found that the Regional Court's decision was based on Article 144a of the Code of Criminal Procedure (Strafprozeßordnung). In this connection, the court noted that pursuant to section 9(1) of the ELAA, the provisions of the Code of Criminal Procedure had to be applied mutatis mutandis unless explicitly provided otherwise.

As to the applicant's assertion that a forfeiture for the benefit of the United States would be contrary to section 64(7) of the ELAA, the court observed that the letters rogatory requested first and foremost that any measures required under Austrian law for the execution of the final forfeiture order be taken. Only as an additional point did they ask for the transfer of the assets, provided that this was admissible under Austrian law or any bilateral treaty. In this connection it referred to Article 17(3) of the 1998 Treaty.

As regards the applicant's assertion that the final forfeiture order covered substitute assets which could not be subject to forfeiture under Austrian law, the court observed that it followed from the judgment concerning the applicant's conviction that he had led an organisation which had laundered large sums of money derived from drug dealing and had usually received a 10% commission for each amount laundered. Between 1 January 1990 and 2 April 1991 he had transferred more than USD 136 million of drug-related money from the account of a sham company to various foreign bank accounts. Thus, there were good reasons to assume that the applicant's Austrian assets were monies received for or derived from the commission of a crime and subject to withdrawal of enrichment under Article 20 of the Criminal Code, or monies directly obtained through drug dealing, subject to forfeiture under Article 20b of the Criminal Code, in the version in force since its 1996 amendment. The final forfeiture order made a clear link between the offence of money laundering of which the applicant had been convicted and the forfeiture of all monies obtained thereby.

Articles 20 and 20b in the version in force since the 1996 amendment of the Criminal Code were not regarded as penalties under Austrian law, but as measures sui generis. The fact that they had not been in force at the time of the commission of the offences was therefore not material.

Even if one applied the law in force at the time of the commission of the offences, the requirements for withdrawal of enrichment were met. Article 20a(1) of the Criminal Code, in the version in force at that time, provided that an offender who had unjustly enriched himself could be ordered to pay an amount equivalent to the enrichment if the latter exceeded ATS 1 million. Although there had been no offence of money laundering under Austrian law at the time, the facts constituted the offence of receiving stolen property (Hehlerei) under Article 164(1)(4) of the Criminal Code, which made it an offence to assist the perpetrator of an offence (here, the drug dealers) in concealing assets derived from or received for the commission of the offence or to acquire such assets.

As to the applicant's allegation that both the criminal proceedings against him and the proceedings resulting in the final forfeiture order had failed to comply with Article 6 of the Convention, the court referred to the documents of those proceedings contained in its file and noted the following. In the criminal proceedings, the applicant had been present and had been represented by two counsel. It noted that it was the applicant who had insisted on being represented by counsel H. although the latter had voiced concerns, albeit without substantiating them, that he might himself be charged. In any case, the applicant had been represented by a second counsel, who was free from any potential conflict of interests. In the forfeiture proceedings he waived his right to a public hearing before a jury since they only concerned questions of law. On 26 March 1993 the judge had heard the case in the presence of the applicant's counsel but without the applicant being present. The applicant's lawyer had requested that the applicant be heard but had refused the court's offer to hold a further hearing in the presence of the applicant before the delivery of the judgment. In sum, the Vienna Court of Appeal found no indication that the proceedings before the United States courts had failed to comply with Article 6 of the Convention.

As regards the alleged lack of reciprocity, the court noted that when the request for enforcement of the final forfeiture order had been made, there had been no bilateral treaty between the United States and the Republic of Austria. Thus, only the provisions of the ELAA had to be applied, section 3(1) of which required reciprocity. The Regional Court had duly investigated the issue in that it had required the United States Department of Justice to submit information as to the possibilities of enforcing an Austrian forfeiture order in the United States. Meanwhile, however, the 1998 Treaty had entered into force. Under Article 20(3) of that Treaty, it applied irrespective of whether the underlying offences were committed before or after its entry into force. Article 17 provided for mutual legal assistance in forfeiture proceedings.

On 25 August 1999 the United States central authority, relying on the 1998 Treaty, made a new request for enforcement of the final forfeiture order of 7 November 1997. According to the applicant, this second request for legal assistance was not served on him.

The applicant made submissions on 22 December 1998, on 11 March 1999 and on 11 May 2000.

On 14 June 2000 the Vienna Regional Criminal Court, without holding a hearing, decided to take over the enforcement of the final forfeiture order of 7 November 1997 and ordered the forfeiture of the applicant's Austrian assets for the benefit of the United States.

Having regard to the 1998 Treaty, the requirement of reciprocity was fulfilled. The submissions by the applicant which disputed this were no longer relevant as they referred to the legal position before the entry into force of the 1998 Treaty. As to the question of the beneficiary of the forfeiture, it noted that Article 17(3) of the 1998 Treaty provided optionally that each State party could hand over forfeited assets to the other party.

Referring to the Court of Appeal's decision of 12 October 1998, it noted that the applicant's conduct had been punishable under Austrian law. Thus, the forfeiture was not contrary to Article 7 of the Convention. Finally, the court noted that the applicant had been given an opportunity to comment on the request for legal assistance.

The applicant appealed on 7 July 2000. He asserted that the 1998 Treaty provided for legal assistance in pending criminal proceedings, but did not contain a legal basis for mutual execution of final decisions. Even assuming that the 1998 Treaty applied in the present case, the enforcement of the final forfeiture order would violate Article 7 of the Convention as the said Treaty had not been in force in 1997 when the forfeiture order was issued. Moreover, money laundering had not been punishable under Austrian law at the time of the commission of the offences. Consequently, his assets could not be subject to forfeiture or withdrawal of enrichment under Austrian law.

Furthermore, the applicant repeated his argument that his Austrian assets were substitute assets and claimed that, at the time of the commission of the offences, such assets had not been subject to forfeiture or withdrawal of enrichment under Austrian law.

Relying on expert opinions submitted by him, the applicant maintained that the condition of reciprocity required by section 3(1) of the ELAA was not fulfilled, as United States constitutional law did not permit the enforcement of decisions given by foreign criminal courts. He further submitted that the five-year limitation period for enforcement had started running on 30 August 1993, when the preliminary forfeiture order was issued (as it was, despite its name, a final and enforceable decision), and not only on 7 November 1997, when the final forfeiture order was issued.

In addition the applicant alleged that the criminal proceedings and the forfeiture proceedings before the United States courts had not complied with the requirements of Article 6 of the Convention. He submitted the same arguments as in the proceedings relating to the preliminary confiscation of his assets. Moreover, he referred in general terms to the fact that the United States still applied the death penalty.

The applicant also complained about a number of procedural shortcomings as regards the proceedings in Austria. He alleged in particular that the Regional Court had refused to take into account the aforesaid expert opinions submitted by him, which showed that United States constitutional law excluded any enforcement of decisions of foreign criminal courts. Moreover, he had not been given sufficient opportunity to advance his arguments as, in his view, that would have required his personal presence in court. Finally, he complained that the Regional Court had failed to hold a public oral hearing and requested that such a hearing be held by the appellate court.

The Public Prosecutor's Office also appealed. Its appeal was served on the applicant for comments, which he submitted on 21 September 2000.

On 7 October 2000 the Vienna Court of Appeal, sitting in camera, dismissed the applicant's appeal. Upon the public prosecutor's appeal, it amended the Regional Court's decision and ordered the forfeiture to the benefit of the Republic of Austria.

The court noted at the outset that, pursuant to its Article 20(3), the 1998 Treaty applied irrespective of whether the underlying offences were committed before or after its entry into force. It dismissed the applicant's argument that the said Treaty did not provide a basis for the mutual enforcement of decisions. Article 1, paragraphs (1) and (2)(h) of the Treaty, in conjunction with Article 17, governed legal assistance in forfeiture proceedings. As to the alleged lack of reciprocity, it was sufficient to refer to those provisions. It was therefore not necessary to examine questions of United States constitutional law.

Moreover, referring to its decision of 12 October 1998, the court reiterated that the facts underlying the applicant's conviction for money laundering would have been punishable as receiving stolen property under Article 164(1)(4) of the Criminal Code at the time of the commission of the offences. Further, it reiterated that withdrawal of enrichment pursuant to Article 20 of the Criminal Code and forfeiture pursuant to Article 20b, both in the version in force since 1996, were not regarded as penalties, but served the purpose of neutralising proceeds of criminal activities. These measures covered any proceeds of an offence, irrespective of whether they were directly derived from the offence or given for its commission or whether they had already been converted into other assets.

With regard to the applicant's complaint that the proceedings in the United States had not complied with the requirements of Article 6 of the Convention, the court referred to the reasons given in its previous decision of 12 October 1998.

The court dismissed the applicant's plea that the enforcement of the final forfeiture order was time-barred, noting that the United States Supreme Court, on 25 March 1996, had refused leave to appeal against the provisional forfeiture order, whereupon the final forfeiture order had been issued on 7 November 1997. Consequently, the five-year limitation period pursuant to section 59 of the Criminal Code had not expired.

As to the applicant's procedural rights, the court noted that he had been represented by counsel throughout the proceedings and had had the opportunity to submit extensive written pleadings.

Finally, the court considered that the public prosecutor's appeal was well-founded in that section 64(7) of the ELAA provided that forfeited assets fell to the Republic of Austria. Thus, forfeiture to the benefit of the United States under Article 17(3) of the 1998 Treaty was not admissible.

The decision was served on the applicant on 30 October 2000.

The applicant complained that neither the Vienna Regional Criminal Court nor the Vienna Court of Appeal had held a public hearing although there were no special circumstances that justified forgoing a hearing. Moreover, he submitted that he should have been heard in person in order to show that the assets stemmed from lawful business activities.

The Government contended that the right to a public hearing or any hearing at all was not absolute. In the present case, the courts had been justified in dispensing with a hearing, since the exequatur proceedings had exclusively concerned questions of law.

Moreover, a personal appearance by the applicant had neither been necessary, as the issues to be resolved had not required the court to gain a personal impression of him, nor had it been feasible, as he was serving his prison term in the United States. A requirement of personal attendance would severely hamper international cooperation in cases such as the present one.

Lastly, the Government argued that the applicant had been sufficiently involved in the proceedings in that he had been informed of all steps taken and had submitted comprehensive statements through counsel.

The Court reiterates that the holding of court hearings in public constitutes a fundamental principle enshrined in paragraph 1 of Article 6. This public character protects litigants against the administration of justice in secret with no public scrutiny; it is also one of the means whereby confidence in the courts can be maintained. By rendering the administration of justice transparent, publicity contributes to the achievement of the aim of Article 6 § 1, namely a fair trial, the guarantee of which is one of the fundamental principles of any democratic society, within the meaning of the Convention (see, for example, Diennet v. France, 26 September 1995, § 33, Series A no. 325-A, and Werner v. Austria, 24 November 1997, § 45, Reports 1997-VII).

According to the Court's case-law, the right to a ‘public hearing’ under Article 6 § 1 entails the right to an ‘oral hearing’ unless there are circumstances which justify dispensing with such a hearing (see Allan Jacobsson v. Sweden (no. 2), 19 February 1998, § 46, Reports 1998-I, with reference to Fredin v. Sweden (no. 2), 23 February 1994, §§ 21–22, Series A no. 283-A, and Stallinger and Kuso v. Austria, 23 April 1997, § 51, Reports 1997-II).

In the present case neither the Vienna Regional Court nor the Vienna Court of Appeal held a hearing before taking over the execution of the Rhode Island District Court's forfeiture order (see paragraphs 33 and 42 above). The Court notes that section 67 of the ELAA does not envisage the holding of a hearing in proceedings concerning the execution of a foreign decision. The fact that the applicant did not request a hearing before the Vienna Regional Criminal Court cannot therefore be interpreted as a waiver of his right to a hearing (see Werner, cited above, § 48). Moreover, in his appeal against the Regional Court's decision he complained about the lack of a hearing and requested the appellate court to hold one (see paragraph 40 above).

The Court must therefore examine whether there where circumstances of such a nature as to dispense the courts from holding a hearing. The Court has accepted that a hearing may not be required where there are no issues of credibility or contested facts which necessitate a hearing and the courts may fairly and reasonably decide the case on the basis of the parties' submissions and other written materials (see, as a recent authority, mutatis mutandis, Jussila v. Finland [GC], no. 73053/01, § 41, ECHR 2006-XIV, with further references).

It follows from the Court's case-law that the character of the circumstances that may justify dispensing with an oral hearing essentially comes down to the nature of the issues to be decided by the competent national court, not to the frequency of such situations. It does not mean that refusing to hold an oral hearing may be justified only in rare cases (ibid., §42). The overarching principle of fairness embodied in Article 6 is, as always, the key consideration.

In particular the Court has had regard to the technical nature of disputes over social-security benefits, which are better dealt with in writing than by means of oral argument. It has repeatedly held that in this sphere the national authorities, having regard to the demands of efficiency and economy, could abstain from holding a hearing since systematically holding hearings could be an obstacle to the particular diligence required in social-security proceedings (see, for instance, Schuler-Zgraggen v. Switzerland, 24 June 1993, § 58, Series A no. 263; Döry v. Sweden, no. 28394/95, § 41, 12 November 2002; and Pitkänen v. Sweden (dec.), no. 52793/99, 26 August 2003). In addition the Court has sometimes noted that the dispute at hand did not raise issues of public importance such as to make a hearing necessary (see Schuler-Zgraggen, ibid.).

Furthermore, the Court has accepted that forgoing a hearing may be justified in cases raising merely legal issues of a limited nature (see Allan Jacobsson (no.2), cited above, §§ 48–49, and Valová and Others v. Slovakia, no. 44925/99, § 68, 1 June 2004) or of no particular complexity (Varela Assalino v. Portugal (dec.), no. 64336/01, 25 April 2002, and Speil v. Austria (dec.), no. 42057/98, 5 September 2002).

Turning to the circumstances of the present case, the Court observes that the courts had to examine whether the conditions laid down in the relevant provisions of the ELAA and the 1998 Treaty for execution of the forfeiture order were met. The issues to be examined included questions of reciprocity, the question whether the acts committed by the applicant were punishable under Austrian law at the time of their commission, compliance with statutory time-limits and whether the proceedings before the Rhode Island District Court, which had issued the confiscation order, had been in conformity with the standards of Article 6 of the Convention.

In the Court's view, the present proceedings concerned rather technical issues of inter-State cooperation in combating money-laundering through the enforcement of a foreign forfeiture order. They raised exclusively legal issues of a limited nature. All the Austrian courts had to establish was whether the conditions set out in the ELAA and the 1998 Treaty for granting the execution of the confiscation order were met. As has already been established (see paragraphs 63–64 above), the proceedings did not involve any review of the merits of the forfeiture order issued by the Rhode Island District Court.

The present proceedings did not require the hearing of witnesses or the taking of other oral evidence. Furthermore, the Court agrees with the Government that the courts were not called upon to hear the applicant in person. The proceedings did not raise any issue of his credibility, nor did they concern any circumstances which would have required the courts to gain a personal impression of the applicant. In these circumstances, the courts could fairly and reasonably decide the case on the basis of the parties' written submissions and other written materials. They were therefore dispensed from holding a hearing.

Consequently, there has been no violation of Article 6 § 1.