A.K. v. SWITZERLAND

THE FACTS

The facts of the case, as submitted by the applicant, may be

summarised as follows:

The applicant is a retired Swiss citizen born in 1925. Before

the Commission he is represented by Mr. M. Ziegler, a lawyer practising

at Lachen in Switzerland.

Particular circumstances of the case

From November 1983 until June 1984 the applicant paid the

salaries of the K. company of which he was the board president.

Thereby he deducted from the salary contributions for the Old Age and

Survivors' Insurance (Alters- und Hinterlassenenversicherung).

However, even after various admonitions the applicant did not transfer

the amounts deducted to the compensation office.

Charges were then brought against the applicant on the grounds

of Section 87 para. 3 of the Federal Old Age and Survivors' Insurance

Act (Bundesgesetz über die Alters- und Hinterlassenenversicherung; see

below, Relevant domestic law and practice).

On 13 February 1989 the March District Court (Bezirksgericht)

convicted the applicant of the offence of alienating contributions of

employees within the meaning of Section 87 para. 3. The applicant was

sentenced to a fine of 200 SFr. Upon appeal, the Cantonal Court of the

Canton of Schwyz on 18 January 1990 raised the fine to 500 SFr.

The applicant filed a plea of nullity (Nichtigkeitsbeschwerde)

with the Federal Court in which he complained inter alia that contrary

to Section 37 para. 2 of the Ordinance (Verordnung) on the Old Age and

Survivors' Insurance (see below, Relevant domestic law and practice)

the admonitions which he had received had not indicated the penal

consequences if the amounts due were not transferred. The applicant

also stated that when he had been admonished as employer to pay the

amounts due on 28 September and 11 December 1984 he did not have any

means at his disposal to pay the amounts due.

On 10 April 1991 the Federal Court dismissed the applicant's plea

of nullity, the decision being served on 26 April 1991.

In its decision the Federal Court first dealt with the

applicant's complaint that the admonitions had not indicated the penal

consequences. The Court found that an indication concerning criminal

liability was only necessary if the law required it; however, no

necessity for such an indication transpired from the Federal Old Age

and Survivors' Insurance Act.

The Federal Court then dealt with the conditions for the

applicant's conviction.

The Court considered that it could no longer maintain its earlier

case-law concerning Section 87 para. 3 of the Federal Old Age and

Survivors' Insurance Act according to which it was irrelevant whether

the employer actually had the means at his disposal to pay the amounts

due (see below, Relevant domestic law and practice). The Court noted

here inter alia that Section 87 para. 3, rather than referring to a

failure to pay, employed the formulation "alienates (the amounts) from

the foreseen purpose".

Thus, in the Court's view the mere failure to pay could not

constitute an alienation within the meaning of Section 87 para. 3, as

long as the employer had the means to pay the amounts; rather, an

alienation within the meaning of this provision required, in addition,

that the employer used the required means for other purposes. The

Court continued:

<Translation>

"The basic consideration underlying Section 87 para. 3 of

the Old Age and Survivors' Insurance Act is the obligation to

maintain the assets. It does not concern actual embezzlement.

There are different moments in time when the amount is deducted

from the salary and when there is a duty to pay; hence, the

employer must be permitted to deal with the assets in such a way

that from an objective point of view it can be assumed that he

can comply with the duty to pay at the last possible moment;

thus, compliance with the duty to pay is even then still possible

if one assumes that with reasonable management the necessary

credits thereto would be granted at this moment".

<Original>

"Der Grundgedanke von Art. 87 Abs. 3 AHVG ist eine

Substraterhaltungspflicht. Da es sich jedoch nicht um einen

eigentlichen Veruntreuungstatbestand handelt, sondern der

Zeitpunkt des Lohnabzugs und der Zeitpunkt der Zahlungspflicht

auseinanderfallen, muss es dem Arbeitgeber erlaubt sein, mit dem

Substrat so zu wirtschaften, dass bei objektiver

Betrachtungsweise davon ausgegangen werden kann, dass er seiner

Zahlungspflicht im letztmöglichen Zeitpunkt werde nachkommen

können, denn die Erfüllung der Zahlungspflicht ist ja auch dann

noch möglich, wenn man annehmen darf, bei vernünftigem

Wirtschaften würden auf diesen Zeitpunkt die dafür erforderlichen

Kredite gewährt".

The Court noted that in June 1984 he had had 45,552 SFr at his

disposal to pay the amounts due. The judgment continues:

<Translation>

"It follows that at least at the end of June 1984 the

applicant had the means to pay the amounts of employees deducted

in the period of January - June 1984. By disposing otherwise of

the amounts concerned rather than transferring them to the

compensation office the applicant fulfilled the requirements of

the offence at least in respect of the contributions of the

employees for the months January - June; contrary to the

applicant's view, it does not depend on whether he disposed of

the necessary means at the moment when the relevant admonitions

were issued (28 September and 11 December)".

<Original>

"Daraus ergibt sich, dass der Beschwerdeführer jedenfalls

per Ende Juni 1984 über die Mittel zur Bezahlung der in der Zeit

vom Januar - Juni 1984 abgezogenen Arbeitnehmerbeiträge verfügte.

Indem er die entsprechenden Beträge nicht an die Ausgleichskasse

weiterleitete, sondern anderweitig darüber verfügte, erfüllte er

den Tatbestand jedenfalls in bezug auf die Arbeitnehmerbeiträge

der Monate Januar - Juni; denn entgegen der Auffassung des

Beschwerdeführers kommt es nicht darauf an, ob er zum Zeitpunkt

der massgeblichen Mahnungen (28. September und 11. Dezember) über

die entsprechenden Mittel verfügte".

Relevant domestic law and practice

Under the Federal Old Age and Survivors' Insurance Act (Bundesge-

setz über die Alters- und Hinterlassenenversicherung) the employer who

deducts amounts from the employee's salary for the purpose of the old

age and survivors' insurance must transfer the amounts to the

Compensation Office (Ausgleichskasse). If the employer does not pay the

amounts within a particular time-limit, an admonition is issued and a

new time-limit is set.

Section 87 para. 3 of the Federal Old Age and Survivors'

Insurance Act envisages a punishment of imprisonment or a fine if a

person "as an employer deducts from an employee amounts from the

salary, yet alienates them from the foreseen purpose" ("wer als

Arbeitgeber einem Arbeitnehmer Beiträge vom Lohn abzieht, sie indessen

dem vorgesehenen Zwecke entfremdet").

Section 37 para. 2 of the Ordinance (Verordnung) on the Old Age

and Survivors' Insurance provides that, if the employer does not duly

pay the amounts, an admonition will be served which must also contain

an indication as to the consequences if the admonition is disregarded.

According to the Federal Court's earlier case-law, the employer

met the objective conditions of Section 87 para. 3, and therefore

became punishable, if the amounts which he had actually deducted from

the salary of the employee were not transferred to the compensation

office within the time-limit stated in the admonition. According to

this case-law it was irrelevant whether the employer actually had the

means at his disposal to transfer the amounts, and whether third

persons could put these amounts at the employer's disposal (see Arrêts

du Tribunal Fédéral <ATF> 107 IV 205).

COMPLAINTS

1. The applicant complains under Article 7 para. 1 of the Convention

that in the admonitions issued there was no indication as to the penal

consequences if he failed to pay. The applicant refers here to Section

37 para. 2 of the Ordinance on the Old Age and Survivors' Insurance.

It is in the applicant's opinion incomprehensible that, according to

the Federal Court, such an indication must be given only for purposes

of the execution of the amounts due (Betreibungsfolgen) and not in

respect of criminal offences.

Also under Article 7 para. 1 of the Convention the applicant

complains that neither Section 87 para. 3 of the Old Age and Survivors'

Insurance Act nor the subsequent interpretation by the Federal Court

make it clear which conduct is punishable. The applicant queries

whether it should merely be the failure to pay the amount, or whether

it is sufficient if the employer at any time disposes of the amounts

due. It is in particular unclear at what moment the employer must

dispose of the amounts due.

2. The applicant complains that the Federal Court gave Section 87

para. 3 of the Old Age and Survivors' Insurance Act a completely new

meaning. Originally the mere failure to pay was punished; according

to the new case-law an alienation occurs if the assets are used for

other purposes.

The applicant submits that he could not expect such a change of

case-law. His defence had concentrated on the moment of the failure

to pay; it had been irrelevant, if earlier on the employer had in fact

disposed of certain amounts. Thus, the applicant was confronted with

an accusation of which he had previously not been informed. In such

circumstances he should have had the opportunity before the Federal

Court to defend himself.

In respect of this complaint the applicant relies on Article 6

paras. 1 and 3 (b) of the Convention.