Article 50 - Right not to be tried or punished twice in criminal proceedings for the same criminal offence
Key facts of the case:
1) The case originated in two applications (nos. 24130/11 and 29758/11) against the Kingdom of Norway lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 28 March 2011 and 26 April 2011 respectively, by two Norwegian nationals, Mr A and Mr B (“the applicants”). The President of the Grand Chamber acceded to the applicants’ request not to have their names disclosed (Rule 47 § 4 of the Rules of Court).
4) The applicants alleged, in particular, that, in breach of Article 4 of Protocol No. 7 to the Convention, they had been both prosecuted and punished twice in respect of the same tax offence.
11) The first applicant, Mr A, was born in 1960 and lives in Norway. The second applicant, Mr B, was born in 1965 and lives in Florida, United States of America.
12) The applicants and Mr E.K. owned a Gibraltar-registered company Estora Investment Ltd. (“Estora”). Mr T.F. and Mr G.A. owned the Samoa/Luxembourg-registered company Strategic Investment AS (“Strategic”). In June 2001 Estora acquired 24% of the shares in Wnet AS. Strategic acquired 46% of the shares in Wnet AS. In August 2001 all the shares in Wnet AS were sold to Software Innovation AS, at a substantially higher price. The first applicant’s share of the sale price was 3,259,341 Norwegian kroner (NOK) (approximately 360,000 euros (EUR)). He transferred this amount to the Gibraltar-registered company Banista Holding Ltd., in which he was the sole shareholder.
The second applicant’s share of the sale price was NOK 4,651,881 (approximately EUR 500,000). He transferred this amount to Fardan Investment Ltd., in which he was the sole shareholder.
Mr E.K., Mr G.A. and Mr T.F. made gains on similar transactions, while Mr B.L., Mr K.B. and Mr G.N. were involved in other undeclared taxable transactions with Software Innovation AS.
The revenue from these transactions, amounting to approximately NOK 114.5 million (approximately EUR 12.6 million), was not declared to the Norwegian tax authorities, resulting in unpaid taxes totalling some NOK 32.5 million (approximately EUR 3.6 million).
13) In 2005 the tax authorities started a tax audit on Software Innovation AS and looked into the owners behind Wnet AS. On 25 October 2007 they filed a criminal complaint against T.F. with Økokrim (the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime) with regard to matters that later led to the indictment of the first applicant, along with the other persons mentioned above and the second applicant, for aggravated tax fraud.
The persons referred to in paragraph 12 above were subsequently prosecuted, convicted and sentenced to terms of imprisonment for tax fraud in criminal proceedings. It may also be noted that:
Outcome of the case:
For these reasons, the Court
Paragraphs referring to the EU Charter in the dissenting Opinion of Judge Pinto de Albuquerque:
11) Within the European Union, the exhaustion-of-procedure principle (Erledigungsprinzip) was affirmed by Article 1 of the 1987 Convention between the Member States of the European Communities on Double Jeopardy (“not be prosecuted”), Article 54 of the 1990 Convention implementing the Schengen Agreement (CISA – “not be prosecuted”), Article 7 of the 1995 Convention on the protection of the European Communities’ financial interests (“not be prosecuted”), Article 10 of the 1997 Convention on the Fight against Corruption involving Officials of the European Communities or Officials of the Member States of the European Union (“not be prosecuted”), Article 2 § 1 of the European Central Bank Regulation no. 2157/1999 on the powers of the European Central Bank to impose sanctions (“No more than one infringement procedure shall be initiated”), Article 50 of the 2000 Charter of Fundamental Rights of the European Union (“the Charter” – “tried or punished”) and the 2003 Initiative of the Hellenic Republic with a view to adopting the Council Framework Decision concerning the application of the “ne bis in idem” principle (“cannot be prosecuted for the same acts”).
12) The Charter radically changed the legal obligations of those member States of the European Union to which it is applicable. Since the right not to be tried or punished twice in criminal proceedings for the same offence is set out in Article 54 of the CISA and in Article 50 of the Charter, Article 54 must be interpreted in the light of Article 50. In the light of Article 52 § 3 of the Charter, when implementing Charter rights and freedoms which correspond to rights and freedoms guaranteed by the European Convention on Human Rights (“the Convention”) and the Protocols thereto, member States of the European Union are bound by the meaning and scope of those rights and freedoms laid down by the Convention and Protocols, as interpreted by the Court, even when they have not ratified these Protocols. This is also the case for Article 50 of the Charter and consequently Article 54 of the CISA, which evidently must be interpreted and applied in the light of the Court’s case-law on Article 4 of Protocol No. 7, even in the case of those European Union member States which have not ratified this Protocol.
14) In the judicial arena, the Court of Justice of the European Union held, in Walt Wilhelm and others v. Bundeskartellamt, that concurrent sanctions could be imposed in two parallel sets of proceedings pursuing different ends. In competition law, the possibility that one set of facts could be submitted to two parallel procedures, one at Community level and the other at national level, followed from the special system of the sharing of jurisdiction between the Community and the Member States with regard to cartels. If, however, the possibility of two procedures being conducted separately were to lead to the imposition of consecutive sanctions, a general requirement of natural justice would demand that any previous punitive decision must be taken into account in determining any sanction which is to be imposed. Later on, the Court of Justice further developed its case-law within the ambit of the third pillar on bis (Gözütok and Brügge, Miraglia, Van Straaten, Turanský, M., Kussowski), on “idem” (Van Esbroeck, Van Straaten, Gasparini, Kretzinger, Kraaijenbrink and Gasparini) and on the enforcement clause (Klaus Bourquain, Kretzinger and Spasic). In the tax law domain, the landmark judgment was Hans Åkeberg Fransson, which reached the following conclusion: “It is only if the tax penalty is criminal in nature for the purposes of Article 50 of the Charter and has become final that that provision precludes criminal proceedings in respect of the same acts from being brought against the same person.” By refusing the Advocate General’s proposal based on the accounting principle, the Luxembourg Court decided, in a remarkable move towards convergence with the Strasbourg Court, that a combination of tax penalties with a criminal nature according to the Engel criteria and criminal penalties would constitute an infringement of Article 50 of the Charter.