PIRAS v. SAN MARINO
Inadmissible
Aleš Pejchal;Kristina Pardalos;Krzysztof Wojtyczek;Linos-Alexandre Sicilianos;Pauliine Koskelo
1. The applicant, Mr Fabrizio Stefano Piras, is an Italian national who was born in 1965 and lives in Moscow. He was represented before the Court by Mr A. Pagliano, a lawyer practising in Naples. 3. On 9 February 2015 the Financial Intelligence Agency (Agenzia di Informazione Finanziaria, hereinafter “the AIF”), the national authority responsible for combatting money laundering, ordered the temporary freezing of bank accounts (mentioned below at paragraph 5) at three named San Marinese banks, which were traced back to the applicant. 4. Pursuant to the relevant law, the AIF informed the investigating judge (Commissario della Legge Inquirente) of the freezing order and provided him with all the information in its possession. A criminal investigation was thus opened against the applicant and eleven others for the continuous offence of money laundering under Articles 50, 73 and 199 bis of the Criminal Code. 5. By a decision of 19 February 2015, served on the applicant’s counsel on 20 April 2015, the investigating judge, relying on Article 58 bis and ter of the Code of Criminal Procedure (see relevant domestic law below) preventively seized, inter alia, the following assets, which were all traced back to the applicant: (i) bank account No. 11/0111344; (ii) bank account No. 11/01/11677; (iii) securities portfolio (dossier titoli amministrati) No. 11/71/00042; (iv) bank account No. 11/81/02166; (v) the financial product (prodotto finanziario) No. 11/46/01034; and (vi) the insurance product (prodotto assicurativo) No. 11/84/00147. The judge also ordered the seizure of any credit balance or other assets (including any safe deposit boxes) traced back to the accused persons. A judicial notice was issued on the same day by the investigating judge and served on the applicant’s legal counsel. 6. According to the prosecution, the accused persons had between 2008 and 2011 laundered assets which were the product of fraudulent bankruptcy committed by a certain G. (one of the co-accused) to the detriment of various Italian companies (company P., company C. and others), which had been traced back to G. and of which he had been the director and liquidator. Other laundered assets were the product of other offences (such as embezzlement, fraud and tax fraud), also committed by G. The laundering had been carried out in twenty-two different episodes (all set out precisely in the judicial notice) and the applicant had taken part in fifteen of them. In particular, the accused persons had carried out several bank operations, consisting, inter alia, of repeated withdrawals and deposits of money, the issuing and cashing of cheques on behalf of fictitious persons or the other co-accused persons and the use of bank accounts (sometimes held by other co-accused persons, by relatives or foreign companies) to transfer money within the country or abroad for the purposes of concealing its criminal origin. 7. Except for the assets related to the alleged fraudulent bankruptcy by G., the alleged criminal origin of the other assets was indicated in the seizure decision by means of references to the legal classification of some of the offences allegedly committed by G. The second page of the decision specified offences such as “bankruptcies, embezzlement, fraud and tax fraud”, while page 42 gave more generic indications such as “acts of fraud and tax offences”. The decision gave no further details regarding the factual basis for such predicate offences. 8. In the detailed seizure decision, the investigating judge reconstructed in precise terms all the above-mentioned bank operations and expressly referred, inter alia, to the applicant’s financial situation. He noted that a customer due diligence test carried out on 19 September 2008 by one of the banks involved had shown that the applicant did not have any administrative role or shareholdings in any Italian companies which could produce any income. According to the judge, after that period, from 15 February 2013, the applicant had been a partner and advisor in a named management consultancy firm. He had not carried out any other business or professional activities and was not on the list of professionals who had received legitimate payments from the bankrupt companies, P. and C. In the light of that information, the judge considered that the applicant’s financial resources were not consistent with the financial, business or professional activities he had declared he carried out. 9. Furthermore, the investigating judge considered that there had existed a periculum in mora (danger in delay) in not issuing a seizure order, as the consequences of the offence could have been aggravated or prolonged. Indeed, the assets could have been withdrawn and/or concealed by the accused persons, thus frustrating the possibility for confiscation at the end of the proceedings. Moreover, the laundering was allegedly still ongoing at the time of the AIF’s temporary freezing order. By the same decision the judge also summoned the applicant for questioning. 10. On 4 May 2015 the applicant and two other accused persons represented by the same counsel lodged a complaint against the seizure decision with the Judge of Criminal Appeals (Giudice d’Appello Penale) under Article 56 of the Code of Criminal Procedure. 11. The applicant primarily requested the lifting of the decision in toto or alternatively a reduction in the amount of money seized to 280,000 euros (EUR). The grounds he gave included the fact that: (i) the judge had violated the principle of nullum crimen sine lege since he had applied a wording of Articles 58 bis and ter of the Code of Criminal Procedure which had been introduced only in 2013 and had therefore not yet been in force at the material time. According to the applicant, prior to the amendments introduced by Law No. 100 of 2013, the domestic law had not provided for a precautionary seizure with the aim of the future confiscation of items other than the price, product or profit of a crime or which had been used to commit a crime – the seizure had therefore been disproportionate; (ii) the alleged offences at the origin of the laundered money had been indicated by the investigating judge in a very generic way – he argued that such a lack of specifics was not sufficient to provide one of the prerequisites for the seizure, namely the fumus delicti (the presumption of a sufficient legal basis); (iii) the only predicate offence which had been mentioned in sufficiently precise terms in the seizure decision had been that of fraudulent bankruptcy to the detriment of company P., for which G. had been found guilty, at first-instance, in Italian criminal proceedings. However, in that connection and in relation to his alternative request, the applicant noted that the Italian court, in Udine, had found that G. had taken EUR 670,000 from the assets of company P. (which had then gone bankrupt) and that only a part of that money (EUR 280,000) had then been transferred to San Marino. Thus, there was a disproportion between the money seized (approximately EUR 1,650,000) and the money having an ascertained (or at least a precisely indicated) criminal origin (EUR 280,000). The applicant argued that the judge had failed even to give a summary description of the alleged actions or factual background constituting such offences and that such lacunas had made it impossible for him to adequately defend himself. 12. By a decision of 25 May 2015, served on the applicant on 28 May 2015, the Judge of Criminal Appeals rejected his requests. 13. In particular, the judge held that there had been no violation of the principle of nullum crimen sine lege since that rule was applicable only to substantive criminal provisions not procedural ones. The latter were subject, instead, to the tempus regit actum principle (the legality of an act can only be judged according to the law in effect at the time of the act). 14. According to the judge, preventive seizure (either probative or preventive with the aim of eventual permanent confiscation) could be ordered regardless of a final finding of guilt concerning an offence. Such a measure was aimed at preventing the commission of further offences or making sure that future measures were not frustrated. Moreover, contrary to the opinion of the defence, preventive seizure had been applicable at the material time (before the amendment of 2013) as section 39 of Law No. 134 of 2010 had expressly provided for it. 15. As to the difference between the sums seized and the alleged product of the offence, the court stated that Articles 58 bis and ter of the Code of Criminal Procedure did not set any limits on seizures or state that the seized amount had to be limited to funds belonging to the accused, or to the price, product, or profit of an offence. According to the judge, a proportionality test had to be carried out only at the stage of applying permanent confiscation following a finding of guilt, not at the stage of precautionary measures, given the different purpose of the measures. 16. With regard to the alleged general nature of the reference to the offences which had been at the origin of some of the assets, it had already been established in domestic case-law that in order to find someone guilty of money laundering it was not necessary to determine the type of predicate offence, the perpetrator, or the victim. It sufficed instead to have evidence of the criminal origin of assets which had been transferred, concealed or substituted – thus the burden of proving the illicit origin was satisfied if such an origin emerged clearly from a logical and coherent interpretation of the evidence. Hence, the investigating judge’s reasoning had sufficed for applying the seizure order since he had described in detail the bank operations carried out by the accused – the suspicious and unreasonable complexity of the operations, the relevant amount and their lack of transparency – elements which had spoken for themselves. Moreover, the investigating judge had highlighted the close relations between G. (the person who had allegedly collected the funds) and all the other accused persons and indicated the respective role of each in carrying out the laundering. 17. On 24 June 2015 the applicant lodged a complaint with the ThirdInstance Criminal Judge (Terza Istanza Penale), reiterating his earlier submissions and requests. In addition, he complained that the judge had reversed the burden of proof in connection with the lack of a precise indication of the fumus delicti in the seizure decision. 18. On 7 September 2015 the Attorney General (Procuratore del Fisco) filed submissions against the applicant’s appeal. 19. By a decision of 4 November 2015, served on 12 November 2015, the judge rejected both of the applicant’s requests. The judge stated that third-instance criminal proceedings were only interim proceedings aimed solely at reviewing the legality of precautionary measures and not the merits of a case. They could not be regarded as a sort of preliminary assessment of an accused’s guilt on criminal charges (since such an assessment was for trial courts). When a Third-Instance Criminal Judge was called on to review the legality of a precautionary measure, the judge had to assess the existence of fumus delicti, namely the plausibility of the investigator’s suspicions (ipotesi investigativa) concerning the commission of an offence and the possibility to trace it to the accused. The judge also had to review whether the substantive provisions that had been applied reflected the factual circumstances described in the notice of the offence (notizia di reato) and whether there had been a correct application of the procedural provisions concerning the admissibility and the assessment of evidence. In addition, the judge had to check whether the rights and duties of the parties had been adhered to; ensure that the requirements and limits of the measure had been correctly applied; and ascertain the existence of adequate reasoning justifying the measure. 20. The judge found that the submissions related to the existence of the fumus delicti, the reversal of the burden of proof and the problem of the assessment of the criminal origin of the assets were inadmissible on the grounds that they concerned the merits of the case and not the legality of the procedure. 21. After a detailed examination of the evolution of the provisions concerning seizures in the domestic law, the judge found no violation of the nullum crimen sine lege principle in the case or, in particular, of the principle of the non-retroactivity of criminal provisions. Moreover, the judge had not had to find any periculum in mora or make any other consideration concerning the accused’s wealth, his personal situation or financial needs, in order to apply a seizure order with the aim of future confiscation. 22. As to any lack of proportion in the seizure, the judge reiterated that the relevant Articles of the Code of Criminal Procedure applied by the investigating judge (Article 58 bis and ter) did not set any limits and the seizure order had therefore been in accordance with the law. 23. The judge also dismissed all the other grounds of appeal. In conclusion, he held that the investigating judge had not made any mistakes in applying or interpreting the relevant laws or in using his powers of discretion in his assessment. The seizure had therefore been necessary, inevitable and proportionate. 24. The offence of money laundering, Article 199 bis of the Criminal Code, reads, in so far as relevant, as follow: “(1) A person is guilty of money laundering where, except in cases of aiding and abetting, he conceals, substitutes, transfers or co-operates with others to so do, money which he knows was obtained as a result of crimes not resulting from negligence or contraventions (misfatto), and with the aim of hiding its origins. (2) or whosoever uses, or cooperates or intervenes with the intention of using, in the area of economic or financial activities, money which he knows was obtained as a result of crimes not resulting from negligence or contraventions (misfatto).” 25. Sections 38 and 39 of Law No. 134 of 26 July 2010, which were applicable until amendments to the Code of Criminal Procedure in 2013 (see paragraph 26 below), in so far as relevant, read as follows: “(1) The Commissario della Legge shall by a reasoned decision order the seizure of the corpus delicti and of items pertaining to a crime (cose ad esso pertinenti) which he deems necessary for the establishment of the facts. (2) Items on which or through which the crime has been committed, and items which constitute the product, profit or price of the crime, shall be considered corpus delicti. (3) The judicial authority or the judicial police (Polizia Giudiziaria) can examine and make a copy of acts, documents, mail, data and information contained in the computer software of financial institutions and seize acts, documents, mail, securities, funds, sums of money and all other items, even if they are contained in safe deposit boxes, when they have good reason to believe that such things pertained to the crime even if [such things] do not belong to the accused or are not registered in his name.” “(1) The Commissario della Legge shall by a reasoned decision order the seizure of items pertaining to a crime if the consequences of such a crime could be aggravated or prolonged or where the commission of other crimes could be facilitated. (2) The Commissario della Legge may also order the seizure of items for which confiscation is allowed, as well as things to which those items may have been transformed or converted, and of things with which they may have been merged (delle cose a cui sono state mescolate) and [the seizure] of the profits obtained therefrom.” 26. The provisions of Law No. 134/2010 were replaced by Articles 58 bis and 58 ter of the Code of Criminal Procedure by means of section 13 of Law No. 100 of 29 July 2013. Article 58 bis and ter, concerning probative and precautionary seizures, are virtually identical to sections 38 and 39 of Law No. 134 of 26 July 2010. The only difference concerns precautionary seizure: whereas Law No. 134/2010 stated that the application of a preventive seizure with the aim of confiscation was not mandatory and depended on the judge’s discretion (“may order” - puo’ disporre), Law No. 100/2013 considered it as mandatory (“shall order” - dispone). Moreover, the latter provision also stated that judges must not only order seizure in cases that have a view to a “direct” confiscation, but also in those aimed at “confiscation by equivalent means” (confisca per equivalente). 27. Article 56 of the Code of Criminal Procedure, in so far as relevant, reads as follows: “Decisions concerning coercive measures or seizures against persons or assets and their subsequent confirmation may be challenged before the Judge of Criminal Appeals by the accused or the Attorney General within ten days of notification or enforcement of the measure ...” 28. According to established domestic case-law (for example, the decision of 25 October 1993 by the Judge of Criminal Appeals in criminal proceedings no. 771/1993; decision of 21 June 1995 by the Judge of Criminal Appeals in criminal proceedings no. 771/1993; decision of 21 November 2000 by the Judge of Criminal Appeals in criminal proceedings no. 1186/1998; and the decision of 4 April 2001 by the Judge of Criminal Appeals in proceedings concerning letter of request no. 68/2000), a complaint under Article 56 of the Code of Criminal Procedure is inadmissible if the Judge of Criminal Appeals is asked to review in general terms all the activities carried out by the investigating judge during the investigation. A Judge of Criminal Appeals can only intervene during an investigation in the specific cases expressly provided for by law, namely in order to review decisions applying precautionary measures, searches and seizures or in the case of aberrant decisions. 29. Law No. 55 of 25 April 2003 sets out the procedure to challenge the legitimacy of precautionary measures, such as seizures. 30. According to section 24 (in the light of section 3 of Constitutional Law No. 144 of 2003), a third-instance judge is competent to decide such challenges and such a challenge does not suspend the enforcement of the measure. Section 25 states that such a challenge can be lodged by interested parties or the Attorney General within thirty days of notification of the seizure decision to the parties. The appeal is then sent to the relevant body, which allows the parties to make submissions within ten days.