THIRD SECTION
CASE OF PASQUINI v. SAN MARINO (No. 2)
(Application no. 23349/17)
 
 
JUDGMENT
 
 
Art 6 § 2 • Presumption of innocence • Judge of Criminal Appeals’ remarks while deciding compensation to the victim after having discontinued charges as time-barred • Statements not merely use of unfortunate language and amounting to imputation of criminal liability • Extra care to be exercised when formulating reasoning in a civil judgment after discontinuation of criminal proceedings
 
 
STRASBOURG
20 October 2020
 
FINAL
 
08/03/2021
 
 
This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision. In the case of Pasquini v. San Marino (no. 2),
The European Court of Human Rights (Third Section), sitting as a Chamber composed of:
 Paul Lemmens, President,
 Georgios A. Serghides,
 Alena Poláčková,
 María Elósegui,
 Gilberto Felici,
 Erik Wennerström,
 Ana Maria Guerra Martins, judges,
and Olga Chernishova, Deputy Section Registrar,
Having deliberated in private on 8 September and 22 September 2020,
Delivers the following judgment, which was adopted on the last-mentioned date:
PROCEDURE
1. The case originated in an application (no. 23349/17) against the Republic of San Marino lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by an Italian national, Mr Enrico Maria Pasquini (“the applicant”), on 20 March 2017. 2. The applicant was represented by Mr A. Pagliano and Ms L. Conti, lawyers practising in Naples and San Marino, respectively. The Government of San Marino (“the Government”) were represented by their Agent, Mr L. Daniele. 3. The applicant alleged that the presumption of innocence had been violated in his respect, in so far as in the absence of a finding of guilt, the judgment of the Judge of Criminal Appeals nevertheless reflected the judge’s conviction that he was guilty. Moreover, he was made to pay damages precisely on the basis of this declaration of criminal responsibility without this having been ascertained in the criminal proceedings. 4. On 4 September 2017 notice of the complaint concerning Article 6 § 2 was given to the Government and the remainder of the application was declared inadmissible pursuant to Rule 54 § 3 of the Rules of Court. 5. The Italian Government, who had been notified of their right to intervene in the proceedings (Article 36 § 1 of the Convention and Rule 44), did not indicate that they intended to do so. THE FACTS
THE CIRCUMSTANCES OF THE CASE
6. The applicant was born in 1948 and lives in San Marino. The first-instance proceedings
7. On 1 June 2011, following an inspection of the headquarters of company S.M.I. (a fiduciary company operating in San Marino), the Central Bank of San Marino (Banca Centrale) submitted to the investigating judge (Commissario della Legge Inquirente) a report concerning, inter alia, some suspicious financial operations carried out by the applicant (at the material time the chairman and sole shareholder of company S.M.I.) and another person, B. (at the material time the director of company S.M.I.), in their respective roles in the company. The report alleged the commission of various offences on the part of the applicant and B. 8. On an unspecified date criminal proceedings were instituted against the applicant and B. In particular, the applicant was charged with: i) the offence of “exercising fiduciary activity without a licence”; ii) three counts of the offence of “obstruction of surveillance”; iii) the offence of “misreporting to shareholders and supervisory boards”; and iv) the continuing offence of embezzlement (aggravated because of his role as administrator). As to the latter charge, according to the prosecution the applicant, between April 2009 and 10 March 2010, had personally withdrawn 2,633,055.77 euros (EUR) from a fiduciary account opened by company S. and administered by company S.M.I. According to the prosecution the applicant was the beneficial owner (titolare effettivo) of company S., and he had withdrawn those funds in order to pay invoices issued for non-existent services notionally provided to company S.M.I. by company S. and other named foreign companies. In that way, in the prosecution’s opinion, the applicant had embezzled the above-mentioned sums of money, to the detriment of company S.M.I. 9. On an unspecified date company S.M.I., represented by its liquidators, as it had meanwhile gone into compulsory liquidation (liquidazione coatta amministrativa), joined the criminal proceedings as a civil party. 10. By a judgment of 8 April 2014 the first-instance judge (Commissario della Legge Decidente) found the applicant (and B.) guilty of all the offences as charged, and sentenced the applicant to four years’ imprisonment and a fine, and also ordered him to compensate company S.M.I. by paying it a sum of money to be quantified in separate civil proceedings. However, the judge issued an interim compensation order (provvisionale) of EUR 2,633,055.77 in favour of the civil party. 11. As to the aggravated embezzlement, according to the first‑instance judge the investigation carried out by the Central Bank had shown that the accused persons had established a complex system consisting in the creation of multiple foreign companies (acting as brokers) through which they had misappropriated funds [belonging to company S.M.I.] by means of simulated business brokerage operations. All those irregular operations were traceable back to the representatives of company S.M.I. in their capacity as natural persons, as clearly shown by the fact that the payments had been repeated each year, whereas normally, business brokerage services were payable as a lump sum paid all at once, not in parts over a period of time. According to the judge, the payments had not been [real] commissions as claimed by the applicant, given that, on the one hand, company S.M.I. had paid large amounts of money and, on the other hand, there had been no real and documented business relationships between the brokers and company S.M.I. According to the judge, [the payment of] such large amounts of money would have required the services to be carried out by well-organised and, most importantly, active broker companies. This had not been the case, in the light of the fact that the brokerage companies involved had their headquarters in countries which were known to be tax havens (paesi a fiscalita’ privilegiata) and that they did not have the corresponding administrative structure. Moreover, the evidence had shown that the applicant and B. had deposited the money (which they had obtained through the payment of undue commissions) in bank accounts that, despite being formally registered in the broker companies’ names, were actually traceable back to the applicant and B., and the latter had repeatedly withdrawn money from them. 12. According to the judge, the Central Bank had indicated in detail in its report the amount of the illicit movements [of money], the bank transfers, their reasons (causali), the dates on which they had been made, and the individual role of the applicant and B. In the judge’s view, those elements had shown both the commission of the crime of embezzlement and the existence of the aggravating circumstances (the latter, in the light of the management role of the accused person in company S.M.I., which was indisputable). 13. In the judge’s opinion, the justification put forward by the applicant (according to whom, given that he was the sole shareholder of company S.M.I. he had in fact appropriated his own funds) derived from an erroneous understanding of the term company as a separate legal person. As a shareholder, the applicant could have appropriated such funds via the collection of dividends. But on the contrary, he had opted to pay fictitious commissions in order to pauperise company S.M.I.’s patrimony, namely the patrimony of a different legal person [separate from the applicant as a natural person], having an economic patrimony which was distinct from the one that the shareholders held in their own name. Fictitious invoices and fictitious reasons for payment (causali) had been used in order to manipulate and abuse the patrimony of the company, so as to obtain benefits to the exclusive advantage of the applicant and B. The interest of the company had been made completely subject to the interests of the applicant and, to a lesser extent, of B., who made payments lacking any business logic. The appeal proceedings and the proceedings before the constitutional jurisdiction
14. The applicant appealed, arguing, inter alia, that the statutory limitation period of the offence of embezzlement as provided by the relevant law had meanwhile expired. 15. By a decision of 1 December 2015 the Judge of Criminal Appeals (Giudice d’Appello Penale) acknowledged that the limitation period for the offence of embezzlement had expired. However the judge, of his own motion, referred the question of the constitutionality of Article 196 of the Code of Criminal Procedure (concerning the jurisdiction of the judge on appeal – see relevant domestic law below) to the Constitutional Court (Collegio Garante della Costituzionalita’ delle Norme). In the judge’s opinion, the latter provision ran counter to Article 15 §§ 1, 2, and 3 of the San Marino Fundamental Human Rights Charter (Dichiarazione dei diritti dei cittadini e dei principi fondamentali dell’ordinamento Sammarinese) and to Article 6 § 1 of the Convention since it failed to provide that, where an offence became time-barred, the appeal judge could nevertheless decide on the merits of the civil claims concerning compensation and restitution (to the civil party). According to the judge such a lacuna contravened the principles of reasonable length of proceedings and procedural economy and the rights of defence of a civil party. 16. Law No. 189 of 22 December 2015 entered into force on 27 December 2015. It introduced Article 196 bis of the Code of Criminal Procedure, which provided that the Judge of Criminal Appeals, declaring an offence time‑barred, could nonetheless decide on the civil obligations deriving from that offence. By a judgment of 26 January 2016 the Constitutional Court ordered the restitution of the case file to the Judge of Criminal Appeals, in order for the latter to decide whether, in his opinion, in the light of the above-mentioned new law, the reasons for the constitutional complaint against Article 196 of the Code of Criminal Procedure still existed. 17. By a judgment of 19 September 2016, published on 22 September 2016, the Judge of Criminal Appeals rejected the applicant’s argument that the new provision could not be applied in the case at hand. In the judge’s view, the new provision had a clearly procedural nature since it empowered the judge to deliberate on compensation for the damage deriving from an offence. Thus, on the basis of the tempus regit actum principle, the new provision had to be applied in all the proceedings which were ongoing on the date of its entry into force. 18. Further, the Judge of Criminal Appeals (i) acquitted the applicant and B. of the offence of “exercising fiduciary activity without a licence”, for lack of evidence concerning deliberate intent (dolo); (ii) acquitted the applicant of one of the counts of “obstruction of surveillance” for lack of evidence concerning the subjective element (but confirmed the others); (iii) ruled that the offences of “obstruction of surveillance” (the other counts), “misreporting to shareholders and supervisory boards” and aggravated embezzlement were time-barred, and discontinued the latter charges; (iv) upheld the remaining parts of the first-instance judgment, including the compensation order. 19. In particular, according to the judgment, in relation to the charges which had become time-barred (including that of embezzlement), in line with the domestic law requirements (see paragraph 24 below), the Judge of Criminal Appeals considered that the reasoning of the first-instance judgment had not indicated that the alleged facts had never occurred or that the accused had not committed them, thus there was no room for any other finding save that of declaring the charges discontinued. 20. The Judge of Criminal Appeals then examined the remaining charges which were not time-barred, and made his findings on the merits in respect of those charges (see paragraph 17 above). 21. Lastly, the Judge of Criminal Appeals specified that he had to scrutinise the elements on which the applicant’s first-instance conviction of the continuing offence of aggravated embezzlement had been based, exclusively in order to decide on compensation for damage (statuizioni civili), in the light of the fact that the relevant charges (for aggravated embezzlement) had been discontinued. 22. Thus,

Outcome for Article 6: violation