Riener versus Bulgaria

On August 28, 1997 Ms. Ianka Riener filed complaint  46343/99 against Bulgaria with the European Commission of Human Rights.  Almost 10 years later, the final judgement in the case was handed down by the European Court of Human Rights (Fifth Section).

That's a long time to wait for justice.

The story is a convoluted one that started with a tax dispute which led to a passport seizure and a travel ban that lasted for years.  The bare facts are that Bulgaria claimed that Ms. Riener owed taxes and then prevented her from leaving Bulgaria until those taxes were paid.  How you might feel about these facts depends greatly on how you feel about such things as "tax justice" versus "freedom of movement".

The irony here is that the story pretty much ended before the ECHR ruled:  Bulgaria dropped its claim against Ms. Riener for back taxes and lifted the travel ban in 2004, two years before the ECHR's judgement dated May 23, 2006.

So what was complaint  46343/99 all about?  Ms Riener, a dual Austrian/Bulgarian citizen, claimed that Bulgaria violated her rights under the Convention for the Protection of Human Rights and Fundamental Freedoms when it prevented her from leaving Bulgaria  Specifically, she alleged that she was denied her rights under Article 8, Article 13 and Article 2  (Protocol No. 4)  - Freedom of movement which says:

"Everyone lawfully within the territory of a State shall, within that territory, have the right to liberty of movement and freedom to choose his residence.
Everyone shall be free to leave any country, including his own.
No restrictions shall be placed on the exercise of these rights other than such as are in accordance with law and are necessary in a democratic society in the interests of national security or public safety, for the maintenance of ordre public, for the prevention of crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.
The rights set forth in paragraph 1 may also be subject, in particular areas, to restrictions imposed in accordance with law and justified by the public interest in a democratic society."

Ms. Riener was born in Bulgaria in 1946 but moved to Austria and became an Austrian citizen in 1989.  Her daughter and grandchildren lived in Austria but in 1991 Ms. Riener was living in Bulgaria where she ran a coffee import business registered in both Austria and Bulgaria.   The trouble began with a tax dispute.

In 1992 the Bulgarian authorities "found that the applicant owed 26,494,582 “old” Bulgarian levs (“BGL”) of unpaid excise tax and BGL 4,104,925 of interest (the total amount due having been at the time the equivalent of about 1 million United States dollars (“USD”). The applicant’s ensuing appeals were dismissed on 20 August 1992 by the Sofia fiscal authority and on 7 April 1993, after a hearing on the matter, by the Sofia City Court. On 7 October 1994 the Supreme Court dismissed the applicant’s petition for review (cassation) of the above decisions."

In 1995, the year that Bulgaria formally applied for EU membership,  the Bulgarian fiscal authorities asked the Passport Department at the Directorate of the Police to impose a travel ban on Ms. Riener until her tax debt was paid.  In the same year, when Ms. Riener attempted to leave Bulgaria for Greece, her Austrian passport was seized at the border and she was not allowed to leave the country.  Since she did not have a Bulgarian passport the seizure of her sole passport meant that she had no travel documents at all and could not leave Bulgaria.  She appealed the travel ban and in 1996 the Sofia City Court ruled against her:

"It found that the applicant’s obligation to pay a significant amount in taxes, as established by the courts, was a sufficient ground, under section 7(e) of the Passport Law, to seize any passport which is used for international travel. Unpaid tax was also a ground to impose a prohibition against leaving Bulgaria under section 29(1)(v) of the Law on Sojourn of Aliens. Although this provision did not provide expressly for a confiscation of a foreign passport, if applied in conjunction with the relevant regulations, it clearly allowed such measure in respect of a person against whom there had been a
decision prohibiting his departure from Bulgaria."

Bulgaria argued that unpaid tax obligations were sufficient to override Ms. Riener's right to leave the country.  Note that Ms. Riener did not agree with the tax assessment in the first place.  She claimed that "the Bulgarian authorities had failed to distinguish between her activities as a physical person engaged in commerce and her position as manager of the Austrian company she owned. That had resulted in wrong assessment of her tax liability. In reality she did not owe taxes."

Not surprisingly the Bulgarian government saw things a bit differently. "The Government stated that the measures against the applicant had been lawful and necessary in a democratic society for the maintenance of ordre public and the protection of the rights and freedoms of others. Emphasising that the applicant had owed significant amounts in taxes and had refused to pay, contesting her debt, the Government considered that the measure against the applicant had been imposed on an individual basis, taking into account her behaviour."

So how did the Court rule?  The right to leave a country is not unconditional and Article 2 makes that very clear. But a State does not have unlimited freedom to override the right to freedom of movement by citing public order or the interests of a democratic society.

"Any measure restricting that right must be lawful, pursue one of the legitimate aims referred to in the third paragraph of the above-mentioned Convention provision and strike a fair balance between the public interest and the  individual’s rights." 

In other words a State must have a very good reason to deny an individual freedom of movement and that reason must be in pursuit of a specific goal outlined in Article 2. And finally, fairness and proportionality must also be considered.

Tax obligations can be a reason to consider denying freedom of movement and the Court noted that there are States that do have such laws.  But it is the ultimate aim of such a denial that makes all the difference here.  A travel ban, said the Court, cannot be a de facto punishment for not meeting one's tax obligations.  The goal must be recovery of the debt. 

And here Bulgaria fell short.  The Court decided that Bulgarian tax authorities had not "actively sought to collect the debt, either before or after the entry into force for Bulgaria of Protocol No. 4 to the Convention."  The Bulgarian authorities simply renewed the travel ban year after year and ''the periodic 'confirmations' of the travel ban were not based on analysis of the applicant’s attitude, on information about her resources or any concrete indication that the chances for recovery would be jeopardised if she were allowed to leave the country."

The authorities, said the Court, have a duty "to take appropriate care that any interference with the right to leave one’s country should be justified and proportionate throughout its duration, in the

individual circumstances of the case. It notes in this context that in the domestic law of a number of member states prohibitions against leaving the country for unpaid taxes can only be imposed if there are concrete reasons to believe that the person concerned would evade payment if allowed to

travel abroad."

So it's not so simple as sending a dunning letter, revoking or seizing a passport, and then waiting until the individual suffers, complies and pays. The State must justify its decision and continue to do so with fairness and proportionality in mind:  Is the aim legitimate?  Are the means used to achieve it necessary and reasonable?

"In sum, having regard to the automatic nature of the travel ban, the
authorities failure to give due consideration to the principle of
proportionality, the lack of clarity in the relevant law and practice with
regard to some of the relevant issues and the fact that the prohibition against
the applicant leaving Bulgaria was maintained over a lengthy period, the
Court considers that it was disproportionate to the aim pursued. It follows
that has been a violation of the applicant’s right to leave any country, as
guaranteed by Article 2 § 2 of Protocol No. 4."

I like the Court's reasoning.  Travel bans and passport seizures exist or have been proposed as tools in the "war against tax evasion".  What the proponents of such measures forget is that States are powerful and they do abuse that power. That is not an anti-government stance - it is a fact.  Whatever the merits of the tax case against Ms. Riener she still had rights and the State had a responsibility to be respectful of those rights.  

Ms. Riener was awarded 10,000 Euros by the Court which is not much when one considers that she spent years as a captive citizen of a country she wanted to leave and whose citizenship she tried to renounce four times.  Bulgaria didn't come out of it too well either;  not only did the Court rule against them in 2006, in 2004  the Bulgarian fiscal authorities determined that their right to seek the collection of the debt under local law was no longer valid which meant that the only legitimate aim (recovery of the debt) was not served by keeping Ms. Riener in Bulgaria.