1.

The driver of an international freight lorry travelling from Turkey to Germany was arrested in Bulgaria with a hoard of coins hidden in the vehicle, and was subsequently charged in that country and convicted of smuggling. Following the conviction, an order was made for the confiscation of the lorry’s tractor unit, amongst other property; according to the referring court, the firm that owned the unit ‘neither knew nor could or should have known that its employee was committing the offence’.

2.

That court asks about the impact of two articles of the Charter of Fundamental Rights of the European Union (‘the Charter’) on the national laws that were applied in the case. Specifically, it has doubts over the compatibility of those laws:

3.

In accordance with the indications given by the Court of Justice, I shall restrict my analysis to the first of these questions.

4.

According to Article 17(1):

‘Everyone has the right to own, use, dispose of and bequeath his or her lawfully acquired possessions. No one may be deprived of his or her possessions, except in the public interest and in the cases and under the conditions provided for by law, subject to fair compensation being paid in good time for their loss. The use of property may be regulated by law in so far as is necessary for the general interest.’

5.

Article 1 (Definitions) establishes the following:

‘For the purposes of this Framework Decision:

…

…’

6.

Article 2 (‘Confiscation’) states:

‘1.   Each Member State shall take the necessary measures to enable it to confiscate, either wholly or in part, instrumentalities and proceeds from criminal offences punishable by deprivation of liberty for more than one year, or property the value of which corresponds to such proceeds.

2.   In relation to tax offences, Member States may use procedures other than criminal procedures to deprive the perpetrator of the proceeds of the offence.’

7.

Article 4 (‘Legal remedies’) states that:

‘Each Member State shall take the necessary measures to ensure that interested parties affected by measures under Articles 2 and 3 have effective legal remedies in order to preserve their rights.’

8.

Article 2 (‘Definitions’) states that:

‘For the purpose of this Directive, the following definitions apply:

…

…’

9.

Article 4 (‘Confiscation’) states:

‘1.   Member States shall take the necessary measures to enable the confiscation, either in whole or in part, of instrumentalities and proceeds or property the value of which corresponds to such instrumentalities or proceeds, subject to a final conviction for a criminal offence, which may also result from proceedings in absentia.

2.   Where confiscation on the basis of paragraph 1 is not possible, at least where such impossibility is the result of illness or absconding of the suspected or accused person, Member States shall take the necessary measures to enable the confiscation of instrumentalities and proceeds in cases where criminal proceedings have been initiated regarding a criminal offence which is liable to give rise, directly or indirectly, to economic benefit, and such proceedings could have led to a criminal conviction if the suspected or accused person had been able to stand trial.’

10.

Article 5 (‘Extended confiscation’) provides:

‘1.   Member States shall adopt the necessary measures to enable the confiscation, either in whole or in part, of property belonging to a person convicted of a criminal offence which is liable to give rise, directly or indirectly, to economic benefit, where a court, on the basis of the circumstances of the case, including the specific facts and available evidence, such as that the value of the property is disproportionate to the lawful income of the convicted person, is satisfied that the property in question is derived from criminal conduct.

2.   For the purpose of paragraph 1 of this Article, the notion of “criminal offence” shall include at least the following:

…

…

11.

Article 6 (‘Confiscation from a third party’) provides as follows:

‘1.   Member States shall take the necessary measures to enable the confiscation of proceeds, or other property the value of which corresponds to proceeds, which, directly or indirectly, were transferred by a suspected or accused person to third parties, or which were acquired by third parties from a suspected or accused person, at least if those third parties knew or ought to have known that the purpose of the transfer or acquisition was to avoid confiscation, on the basis of concrete facts and circumstances, including that the transfer or acquisition was carried out free of charge or in exchange for an amount significantly lower than the market value.

2.   Paragraph 1 shall not prejudice the rights of bona fide third parties.’

12.

Article 53(1) stipulates as follows:

‘(1)   Irrespective of any criminal liability, the following property shall be confiscated for the benefit of the State:

(2)   The following property shall also be confiscated for the benefit of the State:

13.

Article 242(8) requires the means used to transport the smuggled goods to be confiscated for the benefit of the State even if it does not belong to the perpetrator, unless its value is clearly not commensurate with the severity of the offence.

14.

OM worked for a Turkish international freight transport company, which owns an articulated lorry used by him to make scheduled trips across various EU countries.

15.

In early June 2018, an unknown person contacted OM and proposed that he smuggle 2940 antique coins ( 5 ) to Germany in return for payment, taking advantage of the fact that he had to make a trip from the Turkish city of Istanbul to the German city of Delmenhorst.

16.

OM agreed and, after receiving the coins, he placed them in a space found as standard under the driver’s seat which is intended for storing luggage, tools and other accessories, where he hid the coins among various objects.

17.

On the morning of 12 June 2018, OM passed the Turkish border crossing point of ‘Kapakule’ and entered the territory of the Republic of Bulgaria via the border crossing point of ‘Kapitan Andreevo’. At the latter point the lorry was inspected and the customs police discovered the coins.

18.

The antique coins, the tractor unit, the trailer, the ignition key and the vehicle registration document were seized.

19.

During the pre-trial investigations, the manager of the company that owned the vehicle requested the return of the tractor unit and the trailer. The request was refused, first by the supervising public prosecutor and, on appeal, by a decision issued by the Okrazhen sad -Haskovo (Regional Court, Haskovo, Bulgaria) on 19 October 2018.

20.

By judgment of that court of 22 March 2019, OM was sentenced to a custodial sentence of three years and a fine of 20000 Bulgarian leva (BGN) as the perpetrator of an offence of aggravated smuggling of a hoard of coins, the value of which satisfied the ‘on a large scale’ element of Article 242(1)(e) of the NK.

21.

The coins that had been seized were confiscated for the benefit of the State pursuant to Article 242(7) of the NK. The tractor unit used to transport the coins was also confiscated for the benefit of the State, under Article 242(8) of the NK. The trailer, which had no direct connection with the transportation, was returned to its owner.

22.

OM lodged an appeal against the first-instance judgment with the Apelativen sad Plovdiv (Court of Appeal, Plovdiv, Bulgaria) in respect of the confiscation of the tractor unit.

23.

The court of appeal explains that the confiscation is not a penalty and that, under Article 242(8) of the NK, an order must necessarily be made for the confiscation of property used to commit an offence of smuggling.

24.

In spite of the legal underpinning for the confiscation order, the court of appeal has doubts over whether that article of the NK, which was enacted before Bulgaria joined the European Union, is compatible with Article 17(1) of the Charter.

25.

Specifically, it considers that the confiscation for the benefit of the State of the means of transport used as the instrumentality to commit an offence of smuggling in which its owner was not involved could entail an imbalance between the interests of an owner who was unaware of the crime and the interests of the State in seizing the instrumentalities used in the criminal offence.

26.

It also notes that the national law makes no provision for the owner of the means of transport to be heard during the procedure leading to the confiscation, which could compromise its compatibility with Article 47 of the Charter and with the right to an effective legal remedy.

27.

Against this background, the Apelativen sad Plovdiv (Court of Appeal, Plovdiv) refers the following questions to the Court of Justice for a preliminary ruling:

28.

The order for reference was received at the Court of Justice on 21 May 2019.

29.

Written observations were submitted by the Haskovo Public Prosecutor’s Office, the Plovdiv Public Prosecutor’s Office, the Government of Greece and the European Commission.

30.

The referring court asks the Court of Justice whether Article 17(1) and Article 47 of the Charter preclude a national provision (Article 242(8) of the NK) which permits the confiscation of property used to commit an offence of smuggling, even where the property belongs to a third party who was not involved in the offence.

31.

As the Charter is addressed to Member States ‘only when they are implementing Union law’ (Article 51), the citation of one of its articles on its own is not sufficient grounds for a reference for a preliminary ruling if there is no connection to other provisions of EU law.

32.

The order for a reference does, however, refer to recital 33 of Directive 2014/42. That directive is related to the facts of the case, in so far as: (a) it establishes minimum rules on the freezing of the instrumentalities of an offence; and (b) it provides for the establishment of judicial remedies to protect the rights of third parties.

33.

However, it is doubtful whether Directive 2014/42 applies in this case, in view of the criminal offences covered by the convention, the framework decisions and the directives contained in the exhaustive list provided in Article 3. Unless the smuggling of coins that was penalised in this case could come under one of those offences (such as those covered by Framework Decision 2008/841/JHA), ( 6 ) the reported facts would fall outside its scope.

34.

In any event, the Court of Justice may provide the referring court with elements of interpretation of EU law to which the latter court has not referred in its order for reference. ( 7 ) It did so recently, in its response to another reference for a preliminary ruling ( 8 ) in which a Bulgarian court asked it about the interpretation of Directive 2014/42. In that case, the Court of Justice opted to provide it with the interpretation of Framework Decision 2005/212, since Directive 2014/42 did not apply. ( 9 )

35.

Framework Decision 2005/212 was partially replaced by Directive 2014/42, although the change did not affect Articles 2, 4 and 5 of the decision, which remain in force. ( 10 ) As noted by the Commission, the restricted scope of Directive 2014/42 is the reason why some provisions of Framework Directive 2005/212 have not been replaced by it.

36.

According to Framework Decision 2005/212 (Article 2(1)), ‘each Member State shall take the necessary measures to enable it to confiscate, either wholly or in part, instrumentalities and proceeds from criminal offences punishable by deprivation of liberty for more than one year …’.

37.

By contrast with the approach adopted in Directive 2014/42, which restricts its scope as described above, Framework Decision 2005/212 can apply to smuggling offences committed in Bulgaria, as the NK imposes a penalty of a custodial sentence of 3 to 10 years.

38.

In short, I believe that Framework Decision 2005/212 needs to be interpreted in this case in order to resolve the issues raised by the referring court. ( 11 ) At the same time, the fact that it applies allows for the recognition of a direct connection with a rule of secondary legislation, ‘above and beyond the matters covered being closely related or one of those matters having an indirect impact on the other’, ( 12 ) thus opening the way to invoking the Charter.

39.

The referring court states that the firm that owned the tractor unit (for the lorry) ‘neither knew nor could or should have known that its employee was committing the offence’. It would therefore appear to be a bona fide third party which has been deprived of its property even though it was not involved in the commission of an offence. The perpetrator of the offence alone used that means of transport as an instrumentality in order to smuggle the hoard of coins.

40.

In order to determine whether an owner which finds itself in this position can call on Article 17(1) of the Charter, we need, firstly, to consider the content of Framework Decision 2005/212.

41.

Article 1, fourth indent, of the framework decision defines confiscation as ‘a penalty or measure, ordered by a court following proceedings in relation to a criminal offence or criminal offences, resulting in the final deprivation of property’.

42.

The provision makes no mention of the ownership of the confiscated property. In principle, it does not exclude the possibility that it may belong to a third party who is not the perpetrator or another person involved in the offence.

43.

Some passages from Framework Decision 2005/212 are helpful in determining to whom confiscation may be applied:

44.

Framework Decision 2005/212 provided sufficient grounds, therefore, for arguing that confiscation must apply, in principle, to property belonging to the perpetrator of the offence while, at the same time, allowing for the possibility of extending it to cover property belonging to third parties.

45.

The situations of those third parties may differ widely. It would be naïve not to acknowledge that, in many cases, the perpetrators of criminal offences (whether those individuals are under investigation, suspects, or have been charged) seek to interpose a third party precisely in order to avoid the confiscation of their property. ( 13 )

46.

It may be the case, therefore, that the third parties, while not the perpetrators of the offence:

47.

In these circumstances (and perhaps in other similar cases) there would be nothing to prevent the confiscation of the seized property, even though it belonged to persons other than the perpetrator of the offence.

48.

The picture changes when it comes to bona fide third parties, and a specific examination is required of the provisions that apply to them.

49.

The protection (both procedural and substantive) of the rights of bona fide third parties was taken into consideration by the EU legislature, as reflected in recital 3 of Framework Decision 2005/212 and addressed in Directive 2014/42.

50.

That protection concerns both the (substantive) right to property, enunciated in Article 17 of the Charter, and the (procedural) right to go to court in order to defend that right, in accordance with Article 47 of the Charter. I shall examine only the former. ( 14 )

51.

Although they do not apply in this case, the provisions on bona fide third parties in Directive 2014/42 can be taken into account when interpreting Framework Decision 2005/212, because both texts pursue the same objectives, which were already latent in the framework decision.

52.

Recital 33 of Directive 2014/42 acknowledges that it ‘substantially affects the rights of persons, not only of suspected or accused persons, but also of third parties who are not being prosecuted’. These third parties must have ‘the right to be heard [when they] claim that they are the owner of the property concerned, or … claim that they have other property rights (“real rights”, “ius in re”)’.

53.

Consonant with this recital, Directive 2014/42 devotes a provision (Article 6) to confiscation from a third party, which provides as follows:

54.

This provision replaces Article 3 of Framework Decision 2005/212. Although the latter article is no longer in force, it would in my view be wrong to deduce that the possibility of confiscating property belonging to third parties under Framework Decision 2005/212 has disappeared.

55.

Instead, it is my view that, while the treatment of the confiscation of property belonging to third parties contained in Directive 2014/42 is formally separate from the regulation contained in Framework Decision 2005/212, it can help us to understand the scope of the latter. ( 16 )

56.

There is, therefore, nothing to prevent Article 2(1) of Framework Decision 2005/212 being interpreted as allowing the confiscation of property from third parties, other than those acting in good faith.

57.

Having established this premiss, we note that the nature of the right to property guaranteed by Article 17(1) of the Charter has been set out in the judgment of 21 May 2019, ( 17 ) in which the Court of Justice:

58.

In the light of the above, I consider that, as a general rule, it is not possible to confiscate property that has been used as an instrumentality in an offence where it belongs to bona fide third parties.

59.

However, exceptions to that rule could be made on public interest grounds, by means of a rule of national law that pursued legitimate general interest objectives, was appropriate to achieve those objectives and did not go beyond what was required in order to achieve them. ( 20 ) In addition, it would be essential for the deprivation of property to be accompanied by fair compensation paid in good time. ( 21 )

60.

In any event, I believe it is appropriate to make an additional observation on the notion of good faith in this context. I recognise that this is an area where it is essential to examine the facts of the individual case, and that it is for the referring court to determine whether or not there was good faith (in this case, the court has confirmed the existence of good faith in the emphatic terms quoted above). ( 22 ) My point is that the absence of intent is not sufficient: good faith may also be destroyed by culpable negligence, in certain circumstances.

61.

It would be hard to regard a third party as acting in good faith where, for example, he did not know whether the vehicle he was lending to another person would be used to commit a specific smuggling (or drug-trafficking) offence, but it could readily be assumed that the person to whom he was lending the vehicle habitually engaged in such activities.

62.

Extending confiscation to the means of transport (cars, ships and aircraft) used in committing the offence is, in principle, a matter for the legislation of each State. ( 23 ) From the perspective of Framework Decision 2005/212, there is no objection to including those means of transport among the instrumentalities used in committing or attempting to commit the criminal offence.

63.

The referring court takes it as read that Article 242(8) of the NK applies in this case, meaning that the lorry’s tractor unit must be confiscated for the benefit of the State, even though it belongs to a bona fide third party.

64.

That court notes that the European Court of Human Rights (‘the ECtHR’) held, in a judgment of 2015, ( 24 ) that a confiscation ordered in Bulgaria pursuant to that provision had breached Article 1 of Protocol No 1 to the European Convention on Human Rights, the content of which is similar to that of Article 17(1) of the Charter (right to property).

65.

The Plovdiv Public Prosecutor’s Office cites that judgment in its observations and, in support of its argument regarding the validity of the confiscation, it also cites another later judgment of the ECtHR ( 25 ) concerning a confiscation carried out in Bulgaria pursuant to Article 233(6) (formerly Article 233(3) of the Zakon za mitnitsite (Law on Customs); ( 26 ) it states that the wording of this provision is similar, in respect of customs matters, to that of Article 242(8) of the NK. ( 27 )

66.

In actual fact, these two judgments are of limited relevance in providing a basis (pursuant to Article 52(3) of the Charter) for the answer to be given by the Court of Justice to the first question referred:

67.

According to the Ünsped judgment, in that case the national authorities should have considered the property owner’s degree of fault or care in respect of the confiscated property or, at least, the relationship between his conduct and the offence. ( 30 ) The failure to do so and, above all, the failure to give the owner the chance to challenge the confiscation of its property following the criminal proceedings, resulted in a breach of the right protected by Article 1 of Protocol No 1. ( 31 )

68.

As the procedural aspects of this reference are addressed in the second question referred, the debate over the first question must focus on whether the grounds for confiscating the means of transport used to smuggle the goods are sufficient and proportionate where those means belong to a bona fide third party.

69.

In the order for reference there is no mention of any such grounds, and the Bulgarian Government did not intervene in the preliminary ruling proceedings in order to justify them. The Bulgarian public prosecutors who submitted observations in those proceedings did, however, refer to them. They also invoked other arguments in support of the position maintained by them during the criminal proceedings before the first-instance and appeal courts.

70.

Of those arguments (which were put forward, in particular, by the Plovdiv Public Prosecutor’s Office), it seems to me that, prima facie, the argument that the confiscation is valid because Article 242(8) of the NK is sufficiently accessible, precise and foreseeable and pursues an objective in the general interest can be rejected. The issue raised by the referring court is, precisely, whether that legal precept, as interpreted by it, is compatible with EU law.

71.

Nor can the regulation that has been applied be defended by arguing that it reflects international commitments made by Bulgaria and that the confiscation is a form of acquisition (and corresponding loss) of property ex lege, which is outside the competence of the European Union.

72.

On this point, I shall merely note that Framework Decision 2005/212 was issued under the jurisdiction of the European Union and that respect for the right to property forms part of Article 17 of the Charter, which applies to the States in the terms described above. The international commitments mentioned do not require the confiscation of property belonging to bona fide third parties.

73.

With regard to the argument that Bulgarian law on obligations and contracts allows the company that owns the vehicle to sue the driver for damages in respect of the confiscation (and that therefore the company has not actually been deprived of its rights, because it is entitled to bring an action for the corresponding compensation against the individual who has been convicted), I need do no more than refer to the position set out by the Court of Justice in Commission v Hungary (Usufructs over agricultural land) in response to similar arguments. ( 32 )

74.

Returning, therefore, to the justification for the measure, confiscation is designed, by its very nature, to frustrate the criminal’s property incentive by depriving him of all the property, instrumentalities and effects of the offence. That justification, which is connected to the fight against crime, in principle does not apply if what is seized belongs to a bona fide third party.

75.

According to the Haskovo Public Prosecutor’s Office, the effect of abolishing that legal consequence would be to encourage organised crime to use means of transport belonging to third parties in order to commit smuggling offences. The response to this (legitimate) concern lies in investigating the links between the owners of those means of transport and the perpetrators of the offence, and even in introducing stricter criteria that must be satisfied in order for the owners to be regarded as acting in good faith. ( 33 )

76.

If national law were to opt to impose an absolute requirement for the confiscation of the means of transport used where the owners have genuinely acted in good faith (or have even suffered the loss of their vehicle: think of the case of someone whose vehicle has been stolen in order for it subsequently to be used in a smuggling offence), it would be taking advantage of an inappropriate legal instrument in order to expropriate that property.

77.

In such circumstances, turning confiscation into the compulsory deprivation of property would need to be justified by sufficient grounds and, ultimately, would need to trigger the guarantee of compensation set out in the second sentence of Article 17(1) of the Charter.

78.

In the light of the above, I suggest that the response to the first question referred by the Apelativen sad Plovdiv (Court of Appeal, Plovdiv, Bulgaria) should be as follows:

Article 2(1) of Council Framework Decision 2005/212/JHA of 24 February 2005 on Confiscation of Crime-Related Proceeds, Instrumentalities and Property, taken in conjunction with Article 17(1) of the Charter on Fundamental Rights of the European Union, must be interpreted as precluding a provision that allows a means of transport used to commit aggravated smuggling to be confiscated for the benefit of the State where that means of transport belongs to a bona fide third party who neither knew nor could or should have known that it would be used to commit the offence.