Judgment;Abstract — ECLI:EU:C:2021:864
Date: 2021-10-21
Language of the case: Bulgarian
Court formation: Third Chamber
Subject matter: Judicial cooperation in criminal matters;Area of freedom, security and justice;Fundamental rights;Charter of Fundamental Rights
Procedure: Reference for a preliminary ruling
Origin: Bulgaria

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Translation C-845/19 — 1 
Case C-845/19 
Request for a preliminary ruling 
Date lodged: 
19 November 2019 
Referring court: 
Apelativen sad Varna (Bulgaria) 
Date of the decision to refer: 
7 November 2019 
Prosecuting authority: 
Okrazhna prokuratura Varna 
Convicted person: 
DR 
  
APELATIVEN SAD   
Varna      
… 
REQUEST FOR A PRELIMINARY RULING 
TO THE COURT OF JUSTICE OF THE EUROPEAN UNION 
… 
REFERRING COURT: 
Apelativen sad Varna (Court of Appeal, Varna), … 
PARTIES TO THE MAIN PROCEEDINGS: 
EN 
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Prosecuting authority: Okrazhna prokuratura — Varna (Varna Public Prosecutor’s 
Office) … . 
In the appeal proceedings before the referring court, the Public Prosecutor’s 
Office is represented by a public prosecutor … of the Apelativna prokuratura — 
Varna (Public Prosecutor’s Office attached to the Court of Appeal, Varna); 
Convicted person: DR …, currently held in the prison of Varna, where he is 
serving a prison sentence 
Defence lawyers: … 
… 
SUBJECT MATTER OF THE CRIMINAL PROCEEDINGS AND RELEVANT 
FACTS: 
(1) By final judgment, DR was found guilty of possessing, on 21 February 2019, in 
the city of Varna, alone and together with two other persons, TS and NM (who 
also reached a plea bargain agreement and were convicted), without the 
appropriate authorisation, for the purpose of distribution, highly dangerous 
narcotics: methamphetamine of a total weight of 125.61 grams and with a [Or.2] 
total value of BGN 3 140.25, 3.4-Methylenedioxymethamphetamine (MDMA) of 
a total weight of 3.20 grams and with a total value of BGN 128.00, marijuana of a 
total weight of 2 072.30 grams and with a total value of BGN 12 433.80, and 
cocaine weighing 0.03 grams and with a total value of BGN 6.60. DR was 
sentenced to one year’s imprisonment under a general regime and a fine 
amounting to BGN 2 500. The judgment became final on 28 June 2019. 
(2) After DR was convicted, the Public Prosecutor’s Office made an application to the 
Varnenski okrazhen sad (Regional Court, Varna) pursuant to Article 306(1), 
point 1 of the Nakazatelno-protsesualen kodeks (Code of Criminal Procedure; ‘the 
NPK’) for the confiscation for the benefit of the State of a sum of money 
amounting to a total of BGN 4 447.06, namely: 
• banknotes in the following denominations — 1 x BGN 50, 1 x 
BGN 20, 2 x BGN 5, in total — BGN 80; 
• coins — 1 x BGN 0.10, 1 x BGN 0.02, in total — BGN 0.12; 
• coins — 5 x BGN 0.20, 6 x BGN 0.10, 3 x BGN 0.02, 2 x BGN 0.01, 1 
x BGN 0.05, in total — BGN 1.73; 
• coins — 5 x BGN 2, 8 x BGN 1, 5 x BGN 0.50, 6 x BGN 0.02, 17 x 
BGN 0.20, 9 x BGN 0.10, 5 x BGN 0.05, 4 x BGN 0.01, in total 
BGN 25.21; 
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• banknotes in the following denominations — 24 x BGN 100, 22 x 
BGN 50, 37 x BGN 20, 2 x BGN 10, 16 x BGN 5, in total — 
BGN 4 340.00. 
(3) The cash was found and confiscated in the prescribed manner by the competent 
court authorities within the context of the pre-trial stage — during a search and 
seizure at the home where the convicted person, his mother, grandmother and 
grandfather lived, and of the car used by the convicted person; part of the sum of 
money was found in a small bag, which DR admits belongs to him. 
(4) The Okrazhen sad Varna (Regional Court, Varna) examined the application at a 
public hearing, in which the convicted person and his two defence lawyers as well 
as a public prosecutor took part. Within the context of those proceedings, the 
convicted person claimed that the cash was the property of his grandmother, who 
had taken out a bank loan. Documentary evidence was submitted in the case, 
which shows that in December 2018, Mrs ED withdrew the sum of BGN 7 000.06 
from her bank account. 
(5) Mrs ED did not take part in the court proceedings at first instance, in accordance 
with Article 306(1), point 1 of the NPK — the procedural law does not allow that 
she take part as a party to the proceedings in her own right; she was not examined 
as a witness, either. 
[Or.3] 
(6) The court of first instance refused to confiscate the cash, taking the view that the 
criminal offence for which DR was convicted was not such as to generate any 
economic benefits. The reasoning of the court was that, even though there is 
evidence — witness statements — in the case that DR was selling narcotics, since 
the Public Prosecutor’s Office did not charge him with such an offence and the 
subsequent conviction did not encompass those sales, either, there are no grounds 
under Article 53(2) of the Nakazatelen kodeks (Criminal Code; ‘the NK’) for 
confiscation for the benefit of the State. It was stated that ‘… The offence 
pursuant to the first alternative of Article 354a(1) of the NK is of a formal nature 
and is completed by establishing actual control over the narcotic substance. It is 
true that a specific purpose is provided in relation to the objective elements of that 
offence; however, in so far as that purpose was not realised, and he was not 
charged with distribution, it cannot be accepted that that criminal offence 
generated any economic benefit.’ 
(7) The matter subject to verification by the referring court is the correctness of those 
conclusions on the part of the Okrazhen sad Varna (Regional Court, Varna). In the 
appeal of the Varna Public Prosecutor’s Office, it is claimed that the order of the 
Okrazhen sad Varna (Regional Court, Varna) is unlawful since it does not apply 
the provision of Article 53 of the NK ‘in the light of’ Directive 2014/42/EU of the 
European Parliament and of the Council on the freezing and confiscation of 
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instrumentalities and proceeds of crime in the European Union (OJ 2014 L 127, 
p. 39). 
(8) The defence lawyers of the convicted person do not share the view of the 
prosecution, taking the view that only such pecuniary benefit as is the direct and 
immediate consequence of the offence for which the person has been convicted 
may be subject to confiscation. 
RELEVANT NATIONAL LAW 
(9) Nakazatelen kodeks na Republika Balgariya (Criminal Code of the Republic 
of Bulgaria) 
Article 354a. (New — State Gazette, No 95 of 1975, amended, No 28 of 1982, 
No 10 of 1993, No 62 of 1997, No 21 of 2000, No 26 of 2004, No 75 of 2006) (1) 
A person who, without the appropriate authorisation, produces, processes, 
acquires or possesses narcotics or analogues thereof for the purpose of 
distribution, or who distributes narcotics or analogues thereof, shall be sentenced, 
in the case of highly dangerous narcotics or analogues thereof, to a term of 
imprisonment of two to eight years and a fine of BGN 5 000 to BGN 20 000, and, 
in the case of dangerous narcotics or analogues thereof — to a term of 
imprisonment of one to six years and a fine of BGN 2 000 to BGN 10 000. Where 
the offence concerns precursors or equipment or materials for the production of 
narcotics or analogues thereof, the sentence shall be imprisonment for [Or.4] 
three to twelve years and a fine of BGN 20 000 to BGN 100 000. 
(2) (Amended — State Gazette, No 26 of 2010) Where the narcotics or the 
analogues thereof are in large quantities, the sentence shall be imprisonment for 
three to twelve years and a fine of BGN 10 000 to BGN 50 000. In the case of a 
person, who, without the appropriate authorisation and in a public place, acquires 
or possesses, for the purpose of distribution, or distributes narcotics or analogues 
thereof, and where the narcotics or the analogues thereof are in particularly large 
quantities, or where the act has been committed: 
1. by a person acting on the orders or carrying out a decision of an organised 
criminal group; 
2. by a medical doctor or a pharmacist; 
3. by a trainer, teacher, head teacher of an educational establishment or a 
public official during or on the occasion of the performance of his duties; 
4. upon repeated commission of a particularly serious offence,  
the sentence shall be imprisonment for five to fifteen years and a fine of 
BGN 20 000 to BGN 100 000. 
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(3) A person who, without the appropriate authorisation, acquires or possesses 
narcotics or analogues thereof shall be sentenced: 
1. in the case of highly dangerous narcotics or analogues thereof — to a term of 
imprisonment of one to six years and a fine of BGN 2 000 to BGN 10 000; 
2. in the case of dangerous narcotics or analogues thereof — to a term of 
imprisonment of up to five years and a fine of BGN 1 000 to BGN 5 000. 
(4) Anyone who infringes the applicable rules on producing, acquiring, keeping, 
accounting for, dispensing, transporting or carrying narcotics shall be sentenced to 
a term of imprisonment of up to five years and a fine of up to BGN 5 000; the 
court may also order a deprivation of the rights under Article 37(1), points 6 and 
7. 
(5) In less serious cases under Article 354a(3) and (4), the punishment shall be a 
fine of up to BGN 1 000. 
(6) In cases under Article 354a(1) to (5), the object and instrumentalities of the 
offence shall be confiscated for the benefit of the State. 
(10) Article 53. (1) Notwithstanding any criminal liability, the following shall be 
confiscated for the benefit of the State: 
(а) (supplemented — State Gazette, No 7 of 2019) the items that belong to the 
guilty person and were intended or served for the perpetration of an intentional 
crime; where the items are not available or have been disposed of, the equivalent 
value shall be recovered; 
(b) the items that belong to the guilty person and were the object of an intentional 
[Or.5] crime — in the cases expressly provided for in the Special Part of the 
present code. 
(2) (New — State Gazette, No 28/1982) The following shall also be confiscated 
for the benefit of the State: 
(a) the items that are the object or instrumentality of the crime, whose possession 
is prohibited, and 
(b) (amended — State Gazette, No 7 of 2019) the direct or indirect proceeds 
derived from the criminal offence, where those do not have to be returned or 
restored; where the proceeds are not available or have been disposed of, the 
equivalent value shall be recovered. 
(3) (New — State Gazette, No 7 of 2019) Within the meaning of paragraph 2(b): 
1. direct proceeds shall mean any economic benefit resulting as a direct 
consequence of the offence; 
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2. indirect proceeds shall mean any economic benefit resulting from a disposal 
of the direct proceeds, as well as of any property acquired as a result of a 
subsequent transformation, in whole or in part, of direct proceeds, including where 
those have been intermingled with property acquired from legitimate sources; 
property of a value up to that of the included direct proceeds shall be subject to 
confiscation, including any increases in the property, where those are directly 
linked to the disposal or transformation of the direct proceeds and the inclusion of 
the direct proceeds in the property. 
Nakazatelno-protsesualen kodeks (Code of criminal procedure; ‘the NPK’) 
(11) Article 306. (1) The court may also rule by way of an order on the following 
matters: 
1. the imposition of an aggregate sentence pursuant to Articles 25 and 27 as well 
as the application of Article 53 of the Criminal Code; 
2. (supplemented — State Gazette, No 27 of 2009, in force from 1 June 2009, 
amended, No 13 of 2017, in force from 7 February 2017) the initial conditions for 
serving the sentence of imprisonment, where it has failed to do so in the judgment; 
3. (supplemented — State Gazette, No 32 of 2010, in force from 28 May 2010) 
whether the conditions laid down in Articles 68, 69, 69a and Article 70(7) of the 
Criminal Code are met, and what sentence the accused person is to serve; the 
court of first instance which ordered the suspension of the sentence of 
imprisonment shall rule on the application of Article 68(3) of the Criminal Code, 
and the regional court that granted the conditional early release from prison shall 
rule on the application of the second alternative in the first sentence of 
Article 70(7) of the Criminal Code;  
4. the material evidence and the costs of the proceedings. 
(2) In cases under Article 306(1), points 1 to 3, the court shall rule at a hearing 
[Or.6] at which the sentenced person shall be summoned to appear. 
(3) An order under Article 306(1), points 1 to 3 may be appealed against in 
accordance with Chapter 21, and an order under Article 306(1), point 4, in 
accordance with Chapter 22. 
RELEVANT EU LAW: 
(12) Directive 2014/42/EU of the European Parliament and of the Council on the 
freezing and confiscation of instrumentalities and proceeds of crime in the 
European Union 
Recital 11: There is a need to clarify the existing concept of proceeds of crime to 
include the direct proceeds from criminal activity and all indirect benefits, 
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including subsequent reinvestment or transformation of direct proceeds. Thus 
proceeds can include any property including that which has been transformed or 
converted, fully or in part, into other property, and that which has been 
intermingled with property acquired from legitimate sources, up to the assessed 
value of the intermingled proceeds. It can also include the income or other 
benefits derived from proceeds of crime, or from property into or with which such 
proceeds have been transformed, converted or intermingled. 
Recital 20: When determining whether a criminal offence is liable to give rise to 
economic benefit, Member States may take into account the modus operandi, for 
example if a condition of the offence is that it was committed in the context of 
organised crime or with the intention of generating regular profits from criminal 
offences. However, this should not, in general, prejudice the possibility to resort to 
extended confiscation. 
Recital 33: This Directive substantially affects the rights of persons, not only of 
suspected or accused persons, but also of third parties who are not being 
prosecuted. It is therefore necessary to provide for specific safeguards and judicial 
remedies in order to guarantee the preservation of their fundamental rights in the 
implementation of this Directive. This includes the right to be heard for third 
parties who claim that they are the owner of the property concerned, or who claim 
that they have other property rights (‘real rights’, ‘ius in re’), such as the right of 
usufruct. 
(13) Article 2 
For the purpose of this Directive, the following definitions apply: 
(1) ‘proceeds’ means any economic advantage derived directly or indirectly 
[Or.7] from a criminal offence; it may consist of any form of property and 
includes any subsequent reinvestment or transformation of direct proceeds and 
any valuable benefits; 
Charter of Fundamental Rights of the European Union 
(14) 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. 
(15) Article 47. Everyone whose rights and freedoms guaranteed by the law of the 
Union are violated has the right to an effective remedy before a tribunal in 
compliance with the conditions laid down in this Article. Everyone is entitled to a 
fair and public hearing within a reasonable time by an independent and impartial 
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tribunal previously established by law. Everyone shall have the possibility of 
being advised, defended and represented. 
NECESSITY OF THE REFERENCE 
(16) The main dispute in the national proceedings is whether the sums of money found 
in the home of the convicted person represent an economic benefit acquired as a 
result of the offence under Article 354a(1) of the NK. With the Zakon za 
izmenenie i dopalnenie na Nakazatelniya kodeks (Law amending and 
supplementing the Criminal Code) (State Gazette, No 7 of 2019), the provisions of 
Directive 2014/42/EU of the European Parliament and of the Council of 3 April 
2014 on the freezing and confiscation of instrumentalities and proceeds of crime 
in the European Union (OJ 2014 L 127, p. 9, corrigendum OJ 2014 L 138, p. 114) 
were transposed. That, in accordance with the principle of procedural autonomy, 
requires the national courts to apply national law. 
(17) However, the referring court considers that that transposition is not complete and 
accurate, since, unlike Article 2(1) of the directive, the provision of Article 53 of 
the NK does not provide for the possibility of the confiscation, for the benefit of 
the State, of an ‘economic advantage derived […] indirectly from a criminal 
offence’. That is because the Bulgarian legislature defines as ‘direct proceeds’ any 
economic benefit resulting as a direct consequence of the offence, whereas any 
economic benefit resulting from disposal of the direct proceeds or their [Or.8] 
subsequent transformation, in whole or in part, is defined as ‘indirect proceeds’. 
(18) The referring court is not aware of any relevant binding national case-law, in the 
light of the relatively short time for which the provision of Article 53 of the NK in 
the version currently in force has applied. 
(19) At the same time, however, the referring court has doubts as to whether it can 
apply the directive and interpret its national law in the light of that directive, since 
in the present case, there is no cross-border element present in the commission of 
the criminal offence, the damage to assets has occurred exclusively in the territory 
of the Republic of Bulgaria and is within the remit of the Bulgarian judicial 
authorities. At first sight, this is a purely ‘domestic situation’. 
(20) On the other hand, however, one of the aims of the directive is to lead to the 
approximation of the laws of the Member States in the areas of freezing and 
confiscation and [thus] the facilitation of mutual trust and effective cross-border 
cooperation. For that reason, the referring court, in order to correctly rule on the 
dispute before it, first needs to know whether the directive is applicable to the 
particular case.  
(21) If the answer to the first question is in the affirmative, there is also a need to 
interpret the meaning of ‘economic advantage derived […] indirectly from a 
criminal offence’, set out in Article 2(1) of the directive, as envisaged by the EU 
legislature, so that the referring court can comply with its obligation to interpret its 
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national law in conformity with EU law. It is not clear from the wording of the 
provision of Article 2(1) of the directive whether indirect proceeds differ from 
converted or transformed direct proceeds, or whether the two concepts are 
identical. The clarification provided in recital 11 of the directive does not provide 
a clear and definitive answer to that question, either. The Bulgarian legislature has 
opted for the second approach, considering indirect proceeds to be direct proceeds 
that have been converted or transformed.  
(22) The applicability of the directive would also determine the applicability of the 
Charter and in particular Article 47 thereof, in a situation such as the one at issue, 
where it is claimed that the proceeds subject to potential confiscation belong to a 
third party. 
(23) QUESTIONS REFERRED 
1. Are Directive 2014/42/EU of the European Parliament and of the Council of 
3 April 2014 on the freezing and confiscation of instrumentalities and 
proceeds of [Or.9] crime in the European Union (OJ 2014 L 127, p. 39, 
corrigendum OJ 2014 L 138, p. 114) and the Charter of Fundamental Rights 
of the European Union applicable with respect to a criminal offence 
consisting of possession of narcotics for the purpose of distribution thereof, 
committed by a Bulgarian citizen in the territory of the Republic of Bulgaria, 
and where the potential economic proceeds are also realised and located in 
the Republic of Bulgaria? 
2. Should the answer to the first question be in the affirmative, how should the 
concept of ‘economic advantage derived […] indirectly from a criminal 
offence’ in Article 2(1) of the directive be understood, and can a sum of 
money, found in and confiscated from the home of the convicted person and 
his family and from a car driven by him, constitute such an advantage? 
3. Is Article 2 of the directive to be interpreted as precluding a legal provision 
such as that of Article 53(2) of the Nakazatelen kodeks (Criminal Code) of 
the Republic of Bulgaria, which does not provide for the confiscation of an 
‘economic advantage derived […] indirectly from a criminal offence’? 
4. Is Article 47 of the Charter of Fundamental Rights of the European Union to 
be interpreted as precluding a national legal provision such as that of 
Article 306(1), point 1 of the Nakazatelno-protsesualen kodeks (Code of 
Criminal Procedure) of the Republic of Bulgaria, which allows for the 
confiscation for the benefit of the State of a sum of money in respect of 
which it is claimed that it belongs to a person other than the person who 
committed the criminal offence, without that third party being able to take 
part in those proceedings in his or her own right and having direct access to 
the courts? 
…