OLSSON v. SWEDEN
Inadmissible
Nicolas Bratza
The applicant, Daniel Olsson, is a Swedish national, who was born in 1971 and lives in Orsa. The respondent Government were represented by Ms I. Kalmerborn, Ministry for Foreign Affairs. The facts of the case, as submitted by the parties, may be summarised as follows. In its tax return for value-added tax for the period January – June 1993, Dondolare AB, a limited liability company owned by the applicant, claimed a right to deduct value-added tax (VAT) in the amount of 599,125 Swedish kronor (SEK) which had allegedly been paid in connection with the purchase of certain computer software rights. By a decision of 30 May 1994 the Tax Authority (skattemyndigheten) of the County of Kronoberg refused the deduction, considering that it was based on a fictitious transaction. The Authority also ordered the company to pay a tax surcharge (skattetillägg) amounting to 20% of the increased tax liability, claiming that the company had submitted incorrect information in its tax return. On the basis of this decision the Authority, on 3 January 1995, reported the applicant to the police authorities in Växjö on suspicion that he had committed a tax crime (hereinafter referred to as “case A”). As a consequence of the report, a preliminary investigation was opened on 10 January 1995. The applicant was questioned on 19 January 1995. The Växjö police authorities completed its investigation on 2 February 1995 and the applicant received, on that date, a copy of the file. Another preliminary investigation, initiated in 1994 and involving, inter alia, the applicant, was being conducted by the special department for economic crimes of the Public Prosecutor’s Office (åklagarmyndigheten) in Malmö (hereinafter referred to as “case B”). As the two investigations were considered to have much in common, they were joined and, as from 23 February 1995, directed by the prosecutor in Malmö. In the tax proceedings, the applicant’s company appealed against the imposition of a tax surcharge. By a judgment of 28 February 1995 the County Administrative Court (länsrätten) of the County of Kronoberg found that, although there were circumstances in the case which justified the calling into question of the right to the claimed VAT deduction, there was not sufficient evidence to show that the transaction in question had been fictitious or that the information submitted in the tax return in this respect had been incorrect in any other sense. The court noted that the mere rejection, under taxation law, of the arguments made in support of a claim for deduction of tax could not in itself lead to the conclusion that incorrect information had been submitted. Consequently, the court quashed the Tax Authority’s decision in so far as it concerned the imposition of a tax surcharge. The Authority did not appeal against the judgment. The applicant alleges that, following the County Administrative Court’s judgment, he and his legal counsel requested both the Tax Authority and the Public Prosecutor’s Office in Malmö to observe it and to take action accordingly. During the criminal investigations it emerged that, in case A, the applicant, as representative of Dondolare AB, had bought computer software and certain related sales rights from Media Mic Software AB, a company which had previously been owned by the applicant’s brother, M.O., and in which the brother was considered to have a continuing deciding influence. The latter company had, in its turn, bought the software from another company owned by M.O, Bo Michael Trade AB. Moreover, Dondolare AB’s purchase had been financed by M.O. In case B, M.O. had financed the purchase by an Indonesian company of certain licensing rights to computer software from a Swedish company, Svenska Dataintressenter AB. That company had, in its turn, bought the rights from another Swedish company, PE & BE Reklam AB, of which, inter alia, the applicant was a representative. The latter company had claimed to have purchased the rights from a Polish company which later turned out to be non-existent. A third Swedish company, Svenska Dataintressenter i Malmö AB, thus having a similar name as the one that had bought the licensing rights from PE & BE Reklam AB, had claimed in its tax return for the period January – June 1993 a deduction for VAT paid on the basis of that sales agreement, although it had not been a partner to the agreement and therefore not entitled to claim the deduction. It was suspected that the transactions in case B had been initiated by M.O. and that he had had a deciding influence over the various Swedish companies. Moreover, the computer software to which the licensing rights applied had been of insignificant value, according to an expert opinion, and it was suspected that the transactions had been carried out in order to fraudulently obtain VAT refunds. The applicant, M.O. and a third person were suspected of tax crimes in relation to the VAT claim in case B. The Public Prosecutor’s Office concluded that the persons involved, the mode of action and the relevant time-periods were essentially the same in cases A and B and considered that the possibilities of indicting both the applicant and M.O. were good. It was further considered that, in regard to both cases and thus in regard also to the suspicions against the applicant, it was necessary to hear M.O., who was living in Jakarta, Indonesia. In the beginning of the investigation into case B, M.O. had expressed his readiness to be interviewed by the Swedish police. M.O. having later changed his mind, the prosecutor had, via the Swedish Ministry for Foreign Affairs and the Swedish Embassy in Jakarta, in June 1994 requested legal assistance from the Indonesian authorities in obtaining information from a bank concerning certain documents submitted by M.O which were suspected to be forgeries. No information was forthcoming from the Indonesian police authorities in charge of the matter and further contacts via diplomatic channels were therefore taken in November 1994 and in February and March 1995. By a decision of the public prosecutor of 13 September 1995 M.O. was ordered to be detained on remand in his absence and a Swedish warrant for his arrest was issued. In early 1996 and in June the same year the public prosecutor again contacted the Ministry for Foreign Affairs in relation to the mentioned request for legal assistance. At the time of the latter contact, the District Court had upheld the decision on detention on remand and, as a consequence, an international warrant for M.O.’s arrest was issued. The prosecutor also asked the Ministry for Foreign Affairs to examine the possibilities of having M.O. extradited from Indonesia. The efforts to get legal assistance from the Indonesian authorities continued. In January 1997 there was a further contact between the prosecutor and the Ministry for Foreign Affairs concerning both the request for legal assistance and the extradition issue. At about this time, a Swedish liaison officer temporarily staying in Indonesia and an employee of the Swedish Embassy had paid a visit to some high-ranking Indonesian police officers and had raised the problem of receiving legal assistance from Indonesia. The outcome of this meeting was considered positive and it was hoped that the requested information would arrive within a month or two. Apparently, however, this did not happen. On 9 June 1997 the Swedish Embassy reported that the local police authorities were waiting for permission from the Indonesian Ministry of Finance to put questions to the Indonesian bank. The next day, it submitted information from Interpol in Jakarta, according to which M.O. had moved and his new address was unknown. In addition to the above-mentioned measures, the Swedish police was continuously searching for M.O., having received indications on several occasions that he would come to Sweden. On 19 June 1997 the Public Prosecutor’s Office decided to terminate the criminal proceedings in cases A and B on the ground that it could not be proved that a crime had been committed. The applicant was informed thereof on 4 September 1997. On 30 January 1998 the Parliamentary Ombudsman (Justitieombuds-mannen), examining a complaint made by the applicant, concluded that there was nothing calling for further action and therefore decided not to make any inquiries in the matter. On 22 December 1999 the Chancellor of Justice (Justitiekanslern), in reply to a request for damages made by the applicant, decided that there was no reason to assume that a crime had been committed by any public official and the applicant was therefore not entitled to damages. His request was consequently rejected.