AS TO THE ADMISSIBILITY OF

Application No. 11189/84
by S-S., I. AB and B.T.
against SWEDEN


        The European Commission of Human Rights sitting in private
on 11 December 1986, the following members being present:

              MM. C. A. NØRGAARD, President
                  G. SPERDUTI
                  F. ERMACORA
                  G. JÖRUNDSSON
                  B. KIERNAN
                  A. S. GÖZÜBÜYÜK
                  J. C. SOYER
                  H. G. SCHERMERS
                  H. DANELIUS
                  G. BATLINER
              Mrs G. H. THUNE
              Mr.  F. MARTINEZ

               Mr J. RAYMOND, Deputy Secretary to the Commission

        Having regard to Article 25 of the Convention for the
Protection of Human Rights and Fundamental Freedoms;

        Having regard to the application introduced on 19 June 1984
by S-S. I. AB and B.T. against Sweden and registered on 8 October
1984 under file No. 11189/84;

        Having regard to the report provided for in Rule 40 of the
Rules of Procedure of the Commission;

        Having deliberated;

        Decides as follows:

THE FACTS

        The facts of the case, as submitted by the applicants, may be
summarised as follows:

        The first applicant is a Swedish company with its headquarters
in Stockholm.  The second applicant is a Swedish citizen, born in
1914.  He is a chief county surveyor and resides at Vänersborg.  He is
a minority shareholder in five different companies and submits that he
does not control any of these companies.  Before the Commission the
applicants are represented by Mr.  Hasse W. Tullberg, a lawyer
practising in Stockholm.

        In 1975 the Swedish Trade Unions Confederation (LO) intiated a
debate on the economic policy in Sweden.  The new element in the
debate was a proposed introduction of so-called employee investment
funds (löntagarfonder).  Through these funds the LO envisaged a change
in the economic power balance by increasing the influence of the
employees in industry and commerce by means of a transfer of the
ownership of capital.

        The debate culminated in 1983 with the introduction of new
legislation consisting of two new laws and nine amendments to
existing laws.  In their proposals the Swedish Government referred in
particular to the international economic situation and stated inter
alia:


"The policy of stability is thus today more complex than
during the period of swift progress after the war - and it
therefore also means that new methods to solve the problems
are required.  The task is in short to combine an increasing
profit with a just distribution, a stable price and cost
development and a low unemployment rate.

...

Since we now again face a situation where the profits of
trade increase, this time due inter alia to the enormous
increase in competitive power from the devaluation in 1982,
it is of the utmost importance that the price and cost
development in our country does not accelerate again so that
the devaluation effects are destroyed leaving us in a new
cost crisis with harmful effects on trade balance and
employment.

To avoid such a development now as well as later it would be
necessary to decide upon measures which counter the increase
of profits leading to a further concentration of power and
property in trade.  On the contrary it is the task to spread
out the power and property so that more people participate
in the increase of property.  Through this the conditions for
lower increase in costs and bigger growth are created, while
a just distribution is not set aside but on the contrary
intensified.  Through this the conflict of the policy of
stability is alleviated considerably and the pre-conditions
created for a stable and employment-creating economical
growth.

This is the decisive and basic motive for the Government to
propose the employee investment funds.  It is also the
motive which in various forms has been brought forward in
the debate concerning the funds, in Sweden as well as in
other places."

        The structure of the system was based on a new law concerning
a profit-sharing tax and a new law concerning the administration of
the taxes through the Government pension fund system.  It may be
summarised as follows:

Means of obtaining capital

        The Profit-sharing Tax Act regulates the manner in which the
funds are to be raised to satisfy the requirements of the employee
investment funds for the capital needed.  The obligation to pay
profit-sharing tax embraces Swedish limited liability companies,
co-operative associations, savings banks and certain insurance
companies.  Under Section 1, the tax accrues to the State and is
transferred to the National Pension Insurance Fund.

        The amount of tax corresponds to 20% of the "profit-sharing
base".  This base is the real profit of the company, after a
"deductible" amount has been allowed for.  The deductible amount is
either 6% of the payroll of the company which is liable to pay tax or
500,000 Swedish crowns if the company so prefers.  By real profit is
meant the nominal profit of the company for the fiscal year, after
taking into account the effect of inflation on the assets and
liabilities of the company (Section 2).

        In addition to the profit-sharing tax, the employee investment
funds shall be financed by an increase in the supplementary pension
charge, which Swedish employers and the self-employed are bound to
pay to the Government.

        Briefly, the system of general (State) pension and its
financing is built up as follows:

        Swedish employees and the self-employed are covered by the
1962 General Insurance Act.  The insurance schemes consist of health
insurance, basic pension and supplementary pension insurance.
Normally, pensions are paid after the person concerned has reached 65
years of age.  The right to supplementary pension is based on the
income from gainful employment.  The person entitled to pension
collects a larger or lesser number of pension points in relation to
his income, upon which the amount of the supplementary pension benefit
is based.

        The general (State) insurance scheme is financed through the
levying of a number of charges under the Act on Social Security
Charges which are paid by the employers and by the self-employed.  One
of these charges is intended to finance supplementary pensions.  For
1984, it was levied at the rate of 10% of the employees' pay or of the
income of the self-employed from his work.

        From the Bill on employee investment funds it appears that
0.2-0.5% of the supplementary pension charge in the form of a special
supplementary pension charge shall be paid to the boards of the
employee investment funds.  The additional charge for 1984 of 0.2% is
regulated in the Act on the Amendment to the Act on Percentage Rates
for Levying Charges for Supplementary Pension Insurance.

        The profit-sharing tax is expected to bring in receipts of
1.5-2 billion Swedish crowns per year until 1990 and the special
supplementary pension charge is expected to bring in receipts in the
region of 2-2.5 billion Swedish crowns annually.  The employee
investment fund boards will thus have available an average sum of 4
billion Swedish crowns annually from 1984 to 1990 and a total of 28
billion Swedish crowns over the seven year period.  However, a limit
on the transfer of funds to the boards has been stated.  This
corresponds to an "investment capacity" of 2-2.5 billion Swedish
crowns per year.

The administration of the capital

        The second new law passed in 1983 which is of importance in
the employee investment fund system is the Act on the Statutes of the
National Pension Insurance Fund.  The capital received under the law
on social security charges is managed by a government body, called the
National Pension Insurance Fund (AP Fund).  Further, it shall also
manage the capital that is collected from the new profit-sharing tax
and the special supplementary pension charge which is intended to
finance the acquisition of shares by the employee investment funds.

        Before the creation of the employee investment fund system,
the assets of the National Pension Insurance Fund were managed by
four independent boards.  As a result of the new Statutes for the
National Pension Insurance Fund five new fund boards, called "Employee
Investment Fund Boards", were created.  Each of them has nine members
appointed by the Swedish Government.  Five of the members shall
represent the employee interest.  The five boards are to have
regional links (northern, eastern, western, southern and central
board).

        As regards the management of the assets made available to the
fund boards the following directives are laid down in the Statutes of
the National Pension Insurance Fund:


      "34.  The Fund Boards shall, within the limits of what
benefits the supplementary pension insurance system and is
compatible with general economic policy, and taking into account
the functioning of the credit market, manage the assets
entrusted to them by investing them on the capital market.  The
object of their investments shall be to improve the supply of
risk capital to the benefit of Swedish production and employment.

        The assets shall be invested so that the demand for a
good yield, a long-term approach and spread of risk is satisfied.

        36.  An employee investment fund board may invest the
assets that the board manages

        1.  in the shares of Swedish limited liability companies

        2.  in such convertible loan stock or loan stock to which
options to subscribe to new shares are attached as has been
issued by such limited liability companies as are intended in 1,
and

        3.  as risk capital in Swedish co-operative associations.

        37.  Para. 2.  An employee investment fund board may not
acquire so many of the shares registered on the stock exchange in
a limited liability company that they amount to 8% or more of the
total number of shares in the company or, if the shares have
various different voting values, so that the voting rights
attached to the shares amount to 8% or more of the total voting
rights of the shares in the company."

        The employee investment fund boards will primarily invest their
assets through the stock market.  This will be done in the normal
situation by purchasing shares through the Stockholm Stock Exchange.
Each of the five fund boards may acquire a maximum number of shares in
quoted companies as corresponds to voting rights of 8%.  The five
boards can thus together obtain voting righs of 40% in a quoted
limited liability company.  There is no similar limitation on the
acquisition of shares in other companies.

        As a result of acquiring shares in Swedish companies, the
boards of the employee investment funds are entitled to exercise the
voting rights of these shares at the members' meetings of the
companies concerned and consequently influence to a greater or lesser
extent the election of the Boards of Directors of the companies and
the direction of the companies' affairs.

        A limitation on the voting rights of the fund boards is found
in Section 38 para. 1:

       "An employee investment fund board shall, at the request
of a local trade union organisation at a limited liability
company in which the fund board has acquired shares or, if the
company is the parent company of a group, at its Swedish
subsidiaries, assign to the trade union organisation for a
maximum period of one year at a time the right to vote for half
the voting rights attached to the shares."

        By local trade union organisation is meant such an association
of employees as has the standing of a party in local negotiations
with the employer.  The voting rights are transferred from the fund
board by "assigning" to the trade union organisation for a maximum of
one year at a time the voting rights of the shares that the board
manages.

        There is no obstacle preventing the board of an employee
investment fund from voluntarily assigning voting rights for more than
50% of the shares.  However, the right of the local trade union
organisation to exercise voting rights for the above-mentioned
percentage of the shares is unconditional.

        The boards of the employee investment funds shall in
accordance with Section 28 in the statutes of the National Pension
Insurance Fund annually transfer a certain income from the assets
under administration to the three fund boards responsible for
the disbursement of supplementary pensions.  This income corresponds
to 3% of the current value of the assets that the boards managed at
the end of the previous financial year.  The current value
calculations are performed with the aid of changes in the consumer
price index.  Briefly, the system means that the fund boards are to be
responsible for paying a 3% real interest on managed assets mentioned
above to the AP Fund system.

The Swedish Law Council (Lagrådet)

        The proposal that the Swedish Government presented to
parliament was under the Constitution submitted for scrutiny from a
legal point of view by an institution called the Law Council.  This
council is composed of three members from the country's supreme legal
institutions, the Supreme Court and the Supreme Administrative Court.
In the present case, two Supreme Administrative Court Judges and a
Supreme Court Judge scrutinised the bill and gave their opinion on
3 November 1983.

        Concerning the compatibility of the Government bill with the
Swedish Constitution and the European Convention on Human Rights, the
Law Council made the following statement:

"In some statements of opinion it has been questioned
whether the proposal is compatible with the Constitution and
whether it is in accordance with Swedish international
commitments.  On the latter point, it is probably the
convention that Sweden supported through the ratification of
the First Protocol of March 20, 1952 to the Convention
concerning the Protection of Human Rights and Fundamental
Freedoms that is referred to.  According to Article 1 in the
Protocol all rights of physical or juridical persons to
their own property shall remain inviolate and nobody may
have their property confiscated except in the national
interest and under conditions laid down in the law and the
general principles of public law.  The bodies which have
received the proposal for their opinion and which have taken
up the question of the compatibility of the present proposal
with the Constitution have not gone into the question in
more detail.  What they appear to be wishing to question is
whether our legal system allows assets to be taken from
specific companies to be used by organs dominated by
employees in the collective employee interest.  The Law
Council for its part has the following comment to make.  The
assets are taken from business firms by government taxes in
the manner prescribed in the Constitution, viz. in
accordance with laws; the supplementary pension charges
should also be regarded as taxes.  The taxes are specially
destined for the National Pension Insurance Fund.  The
Constitution contains no rules concerning limitations on the
purposes for which government taxes may be levied.  The use
of government funds is decided by Parliament and the
principal rule is that this shall be done by budgetary
means.  However, Chapter 9, Section 2 in the Constitution
allows the use of government funds for special purposes
apart from through the budget.  Giving government revenues
special destination is admittedly being brought to an end
and parliament has stated that no new special destinations
should be introduced.  There is nevertheless no
constitutional obstacle to giving taxes a special
destination.  Nor is there anything to prevent government
funds being made available to bodies in which a specific
group of citizens has a guaranteed dominating influence.  In
the view of the Law Council no complaint can be made against
the proposed employee investment fund system on the grounds
of incompatibility with the Constitution.  Similarly, the
Law Council finds that the proposal is not in conflict with
our international commitments.  The requirement in Article 1
of the above-mentioned supplementary protocol that such
interference as is intended in the Article must be based on
the "public interest" can be regarded as being satisfied in
that the assets will accrue to the National Pension
Insurance Fund and be managed by bodies subject to public
law.  The fact that the proposal also has other purposes
such as strengthening the influence of employees over the
business sector would not appear to lead to any other
conclusion."

        Summary

        In summary, the complex of laws in connection with the
parliamentary approval of the government bill includes the following
points:

        - A large number of Swedish companies will have to share a
certain amount of their profits with the State by means of a special
tax called the profit-sharing tax.

        - All business enterprises which are compelled to contribute
to the State for supplementary pensions under the law on social
security charges will be affected, regardless of their earnings via
the additional surcharge.

        - The receipts from the above charges are destined for the
acquisition on the open market of shares in Swedish limited liability
companies.

        - The owner of these shares will be the National Pension
Insurance Fund, which is a government organ.

        - Five of the nine fund boards, the Employee Investment Fund
Boards, are assigned to manage the above-mentioned shares and through
their use of the voting rights attached to these shares at annual
general meetings to exercise influence on decisions regarding the
affairs of the companies concerned.

        - The majority of the members of the employee investment fund
boards (five out of nine) shall represent the employee interests.

        - The local trade union organisations at the companies in
which shares have been acquired can claim to exercise voting rights
for half the votes attached to the shares.  The trade union
organisations will not themselves be the owners of the share capital
of the companies, but they may exercise the functions of ownership
(voting rights) attached to the shares that the fund boards acquire.
The right of ownership will be retained by the State (AP Funds).

        Finally, it appears that the Swedish Government as a motive
saw the employees investment funds as one element in their economic
policy.  Action appeared necessary to enable employees to participate
in the earnings of business enterprises in order to improve the
stability of long-term economic policy and to lower unemployment.

COMPLAINTS

        Both applicants complain that Sweden has violated the European
Convention on Human Rights and Protocol No. 1 to the Convention by
virtue of the introduction in 1983 of the employee investment funds.
Both applicants maintain that the law obliges companies in Sweden to
make payments to the State, payments that almost exclusively are to be
used to purchase company shares, which will then be at the disposal
of trade union interests.  The result of the law is that trade union
interests are assured the ownership of shares in Swedish companies in
a way that deprives companies of assets, which are then used to
support in an arbitrary fashion trade union demands for power and
right of decision in Swedish limited companies.  This, the applicants
allege, constitutes a deprivation of property in contravention of
Article 1 of Protocol No. 1 to the Convention.

        The law also contravenes the conditions for a State's use of
power, set out in Articles 17 and 18 of the Convention.  Nor does
Swedish law allow any effective remedy before Swedish courts or other
authorities with regard to questions relating to the rules of the
Convention, the absence of which is in contravention of Article 6 and
Article 13 of the Convention.

        Finally, the second applicant complains that, regarding the
relationship between shareholders, the trade unions will benefit at the
expense of the others in a way that violates the principle of equality
between shareholders in a limited company to an extent that
contravenes the principle of equality in Article 14 of the Convention.

        The following is a summary of the submissions of the
applicants in support of their allegations.

        The aim of the employee investment funds is to cause a change
of ownership within existing companies by means of legislation using
money which arises from special public taxation.  This
collectivisation of private ownership will be a continuous task for
the boards of the funds.  The execution of their task takes place
without any balancing of interests according to law or any other legal
control by a public body regarding, for example, the purpose or need
for this transfer from private to collective ownership.  In these
respects the Swedish system differs on practically all points from the
normal practice in Western Europe regarding nationalisation.  The
entire design is alien to the legal traditions of Western Europe.

        The funds work as autonomous socialisation instruments -
formally speaking by taking decisions regarding voluntary purchases on
the stock market from individual shareholders - but thereby using
financial resources, acquired for the purpose by compulsory
acquisition from companies.  It must be considered inadmissible to
create an autonomous socialisation instrument outside of the State's
direct control regarding questions of budget decisions and without any
law concerning the principles of the transfer of ownership from
individuals to trade union bodies.

        Contrary to international practice about payment from public
funds in cases of nationalisation, the Swedish system forces
companies to pay for their own socialisation.  Impositions which in
this way are aimed at financing transactions on the stock market, which
interfere with the market conditions, affecting firms and private
individuals, and which directly are aimed at changing the ownership
configuration, are not such as to which fulfil any of the normal
purposes of taxation.  It is not within the realm of normal public
activity to organise stock-broking activities using the proceeds of
impositions on companies; activities which are intended to be used for
the ousting or out-manoeuvring of the current private owners.  The
aim is incompatible with a reasonable general interest, something
which, according to the Convention, is necessary for taxation
measures.

        The violation of the Convention consists in the transfer of
profits from firms to a governmental institution which then forwards
them to trade-union-run funds, which use the money to purchase shares
and thereby acquire ownership of the firms.  In fact, this transfer of
ownership takes place not as claimed for the benefit of the pension
schemes  but to secure for trade unions the rights to vote and to
exert influence over individual firms.

        According to the Convention neither expropriation nor
taxation is to be used to satisfy anything but the public interest.
It cannot be regarded as satisfying a reasonable public interest to
provide trade unions with a right of decision to acquire shares with
money which is taken from enterprises by means of law and then to give
trade union representatives that right of decision which is an
integral part of share ownership.  On the contrary, it involves
favouring group interests which do not form sufficient grounds from
the public interest point of view to exercise public power in such a
way as to acquire private possessions via taxation with the aim of
changing the existing ownership configuration in limited companies.
In order to describe this acquisition as taxation, the State is in
fact in an artificial way brought into acting formally as a "middle-man"
and money manager before the financial resources are free to be used
for the purchase of shares by the trade-union-steered funds.  This is
to obscure the fact that the financial resources derive from firms
which the trade unions wish to purchase.

        In principle an individual's possessions are to enjoy
protection against public interference in such a way that the
execution of public power can be controlled.  Article 1 of the First
Protocol contains three distinctive rules.  In its first paragraph it
states the principle of the fundamental right to peaceful enjoyment of
possessions.  Secondly, the Article gives the State the power to
interfere with the protection of possessions by such means as
expropriation, that is acquiring property for public use, in ways
described by law and in accordance with international law.
Thirdly, the second paragaraph of Article 1 gives the State an
extensive right to regulate the use of property in the way it
considers necessary for the public benefit and in order to secure
payment of taxes and other contributions for the same purpose.

        The law concerning employee investment funds allows the
transfer of possessions in ways which either lack the support of
any constitutionally acceptable form of taxation right or
constitute such abuse of constitutionally acceptable instruments of
taxation that the right of property is violated.  Such a violation of
the right of possession is in contravention of the fundamental right
of peaceful enjoyment of possessions according to the Convention.

        Protocol No. 1 constitutes a State's right to regulate the
right of property by means of legislation.  However, there is a
certain control of the State's legislative power, for example that
the power must not be used in contravention of Article 17 of the
Convention.  The said Article states that a State must not act in such
a way that a human right as given in the Convention is lost or limited
more than necessary.  Article 18 of the Convention forbids abuse of
public power in such a way that human rights as defined by the
Convention are limited for reasons not allowed by the Convention.

        The power to impose tax is used for the purpose of causing a
change in the power structure within enterprises, a purpose for which
it is not intended.  The payments from the companies for the financing
of the employee investment funds are not necessary to meet any public
requirements for pensions.  The special designation to purchase shares
is of no reasonable public interest but is in excess of what can be
considered reasonable regarding interference in established relations
of ownership within the companies.

        As a matter of fact the employee investment fund system has
been created for other purposes than the one officially given, that is
to say for pension purposes.  The purpose is to satisfy trade union
demands for the right to use shares and thus the right of decision
within Swedish companies.

        The collection of money in question is therefore such an abuse
of the taxation system that it is in contravention of Articles 17 and
18 of the Convention.

        The employee investment funds finally represent a system where
trade union interests are decisive for the purchase of shares in
companies.  The principle, however, that a transfer of possessions to
the public is to be performed in accordance with law and can be
brought before a court according to Articles 6 or 13 of the
Convention does not apply in the Swedish system and accordingly these
articles are also violated.

        There is no constitutional court in Sweden but the
Constitution gives a formal right to Swedish courts and authorities to
test whether an Act in a particular case contravenes the Swedish
Constitution.

        Chapter 2, section 18 of the Swedish Constitution
(Regeringsformen) gives the individual a right of compensation in case
of expropriation or similar measures.  If an Act is in contravention
of this requirement, a court can for example examine the question
of compensation.  The legality of tax measures can also be tried by
tax courts.

        However, the test of constitutional viability is generally
regarded more as a formal than a practically feasible right in cases
of constitutional deficiencies in Swedish law.  Nor has there ever
been any test of constitutional viability leading to the disapproval
of a Swedish law.

        Instead Swedish Acts are examined by a committee called
the Legal Council (Lagrådet) before the passing of a bill.  The Legal
Council is formally an advisory body to the Government.  It has
examined the Employee Investment Fund Acts and found that they do not
contravene the rules of expropriation found in the Constitution,
Chapter 2, section 18 or the European Convention on Human Rights.

        The Legal Council, however, is not a court and cannot decide
on its own working conditions, such as the time allowed for the
examination of a bill.  In this instance, the Government gave the
Council only three weeks to examine the proposed legislation.  The
Council was, furthermore, not commissioned to examine all Acts forming
part of the legislation.  The members therefore complained over the
short time and the incomplete material given to them.  The conditions
under which the Legal Council was forced to work must be regarded as
almost a parody of judicial work.  The Council's control was later
also publicly criticised by the opposition in Parliament.

        However, the findings of the Legal Council normally exercise
great influence on the Swedish courts.  Therefore, the Council's
acceptance reduces the already very small possibilities of being
successful in Sweden with a test case regarding the
unconstitutionality of the employee investment funds according to
Swedish law.

        According to Article 13 of the Convention every individual has
the right to bring his case before a national authority in case his
rights according to the Convention have been violated.  According to
the practice of the European Court of Human Rights this also applies to
anybody who maintains that such a violation has taken place.  In
Sweden - which has not incorporated the rights of the Convention into
her domestic law and where the courts refuse to take the rules of the
Convention into consideration - there are no effective remedies within
the meaning of the Convention regarding decisions taken by the
Government or the Parliament.

        In the case of Sporrong and Lönnroth v.  Sweden (Comm.  Report
8.10.80) the Commission found that Swedish legislation violated
Article 13 of the Convention as regards decisions taken by the Swedish
Government as the primary and ultimate decision-making body.  According
to the Swedish system there is no possibility of having a case
examined on the basis of the Convention.  The applicants feel that
this is a case of violation of Article 13 and possibly also of
Article 6 para. 1.

        The second applicant has finally separately submitted the
following regarding the effect of the interference on the companies'
owners/shareholders.

        Primarily, it is the companies themselves that are subject to
the public interference since they must abstain from resources which
are then used for the purchase of shares in the interest of trade
union bodies.  Ultimately, however, the interference affects the
owners of the companies.  Thus, both the companies as legal entities
and their owners, that is the physical persons who own the shares, are
affected.

        The law on the employee investment funds will create a new
group of company owners, who finance their ownership of shares by
acquisition of the companies' own assets.  Thus, the purchase by the
new group of owners takes place without any corresponding sacrifice of
their own assets.  The change of ownership does not take place under
commercial conditions by means of purchasing new issues of shares or
purchasing shares on the stock market by using money which does not
come from the companies themselves.  Other groups of shareholders will
be overpowered by institutions which are not subjected to the
commercial market condition whereby economic sacrifices must be made
in order to purchase shares and to gain ownership in the companies.

        Changes in the regulation of the relationship between
different groups or types of shares, stated in the articles of
companies, can, according to Swedish law, only be carried out
voluntarily and, principally, by means of decision by a qualified
majority at a general meeting of shareholders.  This method of
acquiring shares which is, in principle, cost-free for the new group
of owners, will endanger the existing relationship between different
groups of owners, a relationship voluntarily created and regulated in
the articles of companies.  Other owner groups, which separately or
together own two or three per cent of the shares, may thereby have
secured for themselves a decisive influence in company affairs
through representation on the board or even involvement in management.
Such an owner or group of owners is now in danger of losing influence
because of the employee investment funds which - with means provided
by the companies themselves - are able to purchase say five or six per
cent of a company's total stock of shares.

        The involvement of a previously influential group of
shareholders will then become considerably changed, perhaps even
meaningless from their own point of view.  It will no longer be
possible to retain control of the company, something which is perhaps
necessary if the original shareholders are to retain their
involvement.  A block of shares that gives the owner influence
represents a value as such, a value that is endangered or lost by the
operations of the employee investment funds - operations which had
been completely impossible to carry out without legislative support
provided by the funds' statutes, and which authorise the funds to
acquire compulsorily assets from the firms in the way described
above.  The money used for the funds' purchase of shares is, in
principle, money acquired from the shareholders.  The change of
ownership is thus carried out at the expense of other shareholders.

        The profit and profit-sharing taxes and the social security
contribution, amounting to 0.2 per cent of wages/salaries and
specially designated for the purchase of shares, all reduce companies'
assets.  The assets acquired are then out of the companies' reach.
This reduction of the companies' assets of course affects the value of
the shares.  By the transfer of assets, in fact belonging to the
companies, for purposes alien to the companies and without the support
of any decision taken by the shareholders in a voluntary way
stipulated in the charters of the companies, both the companies and
their shareholders are sustaining losses.  These losses are directly
linked to the enrichment of the employee investment funds.  This
enrichment is in contravention of the protection of property afforded
by the Convention as it forbids compulsory transfer of property
without compensation.

        In order to satisfy the trade union demand for part-ownership
of companies it has been necessary to alter the ordinary rules for
and the meaning of shareholding.  The Swedish Company Act, Chapter 1,
section 1 has been amended to allow the transfer of voting rights to
trade unions.  To abandon the Company Act's so-called "principle of
indivisability" regarding share votes is by itself an expropriative
measure as it is a direct transfer of powers of ownership to trade
unions.

        Thus it is clear that, as mentioned above, the employee
investment funds in reality are administrative bodies taking care of
trade union interests and not of national public interest.  The funds'
organisation and administration are in practical terms alien to, or at
least not necessary for the interests and needs of the State Pension
Scheme.

        As the funds choose companies as objects of purchase and
begin to infiltrate them, the boards of the funds appear as intruders
among the other shareholders.  In fact, the funds obtain assets from
companies to the detriment of the other shareholders.

        As mentioned before this endangers the configuration of
ownership in the companies.  It also sets aside the principle of
equality among shareholders, as the funds obtain company assets to
enable them to purchase the companies' shares on the stock market.

        Such a measure is to be considered an interference with the
concerned companies' sphere of assets, an interference of an
expropriative nature.  As mentioned "the principle of equality"
is violated and the relationship within groups of shareholders is
endangered by the introduction of a new group of shareholders who have
been given assets from the companies to enable them to finance their
purchases of shares.  Further, the principle of indivisability is
surrendered when the right to vote, one of the prerogatives following
ownership, is transferred to the trade unions.  This way of
favouring a new group of owners and certain individual/trade union
group interests also contravenes the principle of equality stated in
Article 14 of the Convention.

THE LAW

1.      Both applicants have complained that the introduction in 1983
of the legislation in Sweden concerning the employee investment funds
involves a breach of Article 1 of Protocol No. 1 (P1-1) to the Convention
which reads:

        "Every natural or legal person is entitled to the
        peaceful enjoyment of his possessions.  No one
        shall be deprived of his possessions except in
        the public interest and subject to the conditions
        provided for by law and by the general principles of
        international law.

        The preceding provisions shall not, however, in any
        way impair the right of a State to enforce such
        laws as it deems necessary to control the use of
        property in accordance with the general interest
        or to secure the payment of taxes or other
        contributions or penalties."

        It is clear from Article 25 para. 1 (Art. 25-1) of the
Convention that the  Commission can receive an application from a
person, non-governmental organisation or group of individuals only
if such person, non-governmental organisation or group of
individuals can claim to be a victim of a violation by one of the
High Contracting Parties of the rights set forth in the Convention.
Moreover, the Commission is competent to examine the compatibility of
domestic legislation with the Convention only with respect to its
application in a concrete case, while it is not competent to examine
in abstracto its compatibility with the Convention.

   Accordingly the Commission will only examine the applicants'
complaints insofar as the legislation in question affects the
applicants themselves.

   Both applicants have alleged that the levying of a profit-sharing
tax upon certain companies and the obligation of these companies to
pay an increase in the supplementary pension charge are an
interference with property rights which, therefore, can only be
justified insofar as the interference is legally justified in
accordance with the exception rules in the second sentence of the
first paragraph or the second paragraph of Article 1 of Protocol No. 1
(P1-1) to the Convention.

        Regarding this complaint the Commission observes that the
"possessions" referred to are the sum of money the first applicant
must pay under the Profit-sharing Tax Act and the supplementary
pension scheme.  The Commission finds that this applicant, therefore,
may claim to be a victim of an alleged violation of Article 1 of
Protocol No. 1 (P1-1) to the Convention.  The Commission furthermore finds
that this could be regarded as an interference with the first
applicant's right to peaceful enjoyment of its possessions and that,
therefore, Article 1 of Protocol No. 1 (P1-1) is applicable regarding this
applicant.

        Regarding the second applicant the Commission recalls that he
is a shareholder in certain companies liable to pay the charges in
question.

        The Court of Human Rights has held that the term "victim" in
Article 25 (Art. 25) of the Convention denotes the person directly
affected by the act or omission which is at issue (cf. Eur. Court
H.R., Eckle judgment of 15 July 1982, Series A No. 51, p. 30, para.
66).  The Commission has previously held in two cases that a
shareholder was entitled to claim to be a victim of measures directed
against a company (No. 1706/62, Dec. 4.10.66, Collection 21 p. 26 and
No. 7598/76 Kaplan v. United Kingdom, Comm. Report 17.7.80, D.R. 21
p. 5  (p. 23)).

        However, the Commission recalls that in both these cases the
individual concerned held a substantial majority shareholding in the
company.  In effect both applicants were carrying out their own
business through the medium of the company and both applicants had a
direct personal interest in the subject-matter of the complaint.  Thus
in Application No. 1706/62 the applicant alleged that the actions of
which he complained were part of a general scheme aimed against him
personally.  The Kaplan case concerned restrictions imposed on the
company on the basis of the applicant's alleged personal unfitness to
act as a controller.

        In the case of Yarrow and others (No. 9266/81, Dec. 28.1.83,
D.R. 30 p. 155 (p. 185)) the Commission held that the applicants, who
did not hold a majority or controlling interest in the company in
question, were not directly and personally affected by the measure
taken (the nationalisation of the company) even though this measure
undoubtedly reduced the value of their shareholdings and they could
not therefore claim to be victims within the meaning of Article 25
(Art. 25) of the Convention.  Moreover, it was open to the direct
victim - the company - to lodge an application.

        The circumstances of the particular complaint in this case
are, in the Commission's view, comparable to the latter decision.  The
second applicant himself is not required to pay any tax or additional
charge to the national pension scheme and he cannot therefore be found
to be directly and personally affected by these charges which are the
subject of the first complaint to be considered by the Commission.
Thus he is in this respect not entitled to claim to be a victim for
the purposes of Article 25 (Art. 25) of the Convention and it follows
that this part of the application, so far as brought by the second
applicant, is manifestly ill-founded and must therefore be considered
inadmissible under Article 27 para. 2 (Art. 27-2) of the Convention.

        Regarding this particular complaint it thus remains to examine
whether the interference with the first applicant's rights was
justified.

        The Commission has previously been called upon to determine
whether another applicant company in Sweden had been subject to an
unjustified interference when forced to pay the charges in question
under the Swedish Employee Investment Fund Acts (Dec. No. 11036/84,
2.12.85, to be published in D.R.).  In this decision the Commission
stated:

"The sums of money to be paid relate either to a
profit-sharing tax or to a contribution to the Swedish
pension system and the interference therefore falls under
the notion 'to secure the payment of taxes or other
contributions' as set out in the second paragraph
of Article 1 (Art. 1-2).  The power of taxation is
expressly recognised hereby and includes ... also the
right to levy taxes as such.

Though it is certain that no general prohibition of taxes
payable exclusively out of the tax-payer's capital can be
derived from Article 1 (Art. 1), the Commission finds that a
financial liability arising out of the raising of taxes or
contributions may adversely affect the guarantee of
ownership if it places an excessive burden on the person
concerned or fundamentally interferes with his financial
position.  However, it is in the first place for the
national authorities to decide what kind of taxes or
contributions are to be collected.  Furthermore the
decisions in this area will commonly involve the
appreciation of political, economic and social questions
which the Convention leaves within the competence of the
Contracting States.  The power of appreciation of the
Contracting States is therefore a wide one.

In the present case the Commission recalls that the
applicant is of the opinion that the employee investment
fund legislation, after a scrutiny of the facts, is no more
than the expression of a desire for a different distribution
of wealth and power and greater trade union influence
through joint ownership.  The outcome of the transactions is
in no way different from transactions concerning the
nationalisation of industry aiming at the Swedish State
becoming the actual owner.  The reasons stated by the
Government are, in the applicant's opinion, merely a pretext
intended to conceal the real point, which is the demands of
the trade unions associated with the Swedish labour movement
to influence the Swedish business enterprises.

As already mentioned above, the Convention leaves it to the
Contracting States to determine their political, economic
and social policies and Article 1 of Protocol No. 1 (P1-1) to the
Convention is not intended to protect any specific political
view or system.  Article 1 (Art. 1) is a guarantee within the
democratic states Parties to the Convention, securing the
peaceful enjoyment of possessions and it is in this light
that the Commission examines the interference imposed on the
applicant.

The circumstances of the present case show that the
applicant is bound to pay a new tax which amounts to a
certain percentage of its profits.  Furthermore it has been
established that the applicant must pay an increase in
social pension charges amounting to 0.2 - 0.5 per cent.  The
Commission cannot find that these obligations affect the
applicant's guarantee of ownership or interfere with its
financial situation to such an extent that this could be
considered disproportionate or an abuse of the Contracting
Party's right under Article 1 of Protocol No. 1 (P1-1).

It may be true that the aim of these transactions includes
the creation of a different policy in the economic field.
However, although opinions evidently differ as to the
fairness of such policy the Commission considers that it was
one which the Government were entitled to pursue.
Accordingly, the legislation concerning the employee
investment funds did not infringe the applicant's rights
under Article 1 of Protocol No. 1 (P1-1)."

        It has not been established that the circumstances of the
present applicant company are different in any way from the company in
the previous case.  For the same reasons the Commission therefore
concludes that its complaint is manifestly ill-founded within the
meaning of Article 27 para. 2 (Art. 27-2) of the Convention.

2.      Under Article 1 of Protocol No. 1 (P1-1) to the Convention the
second applicant has complained that he, as shareholder, may be
overpowered by institutions which are not subjected to the commercial
market conditions whereby economic sacrifices must be made in order to
purchase shares and to gain influence in the companies.  The
involvement of a previously influential group of shareholders would
thus be changed considerably.  A block of shares, which in the
applicant's opinion represents a value as such, gives the shareholder
influence over a company, an influence/value that is endangered or
lost by the operation of the employee investment funds.  Furthermore
the reduction of the companies' assets would affect the value of the
shares as such to the detriment of the present shareholders, including
the second applicant.

        The Commission has first examined whether the second
applicant, in the light of the Commission's earlier case-law set out
above, can claim to be a victim with regard to this particular
complaint.  Insofar as the second applicant refers to the value of the
shares he owns the Commission recalls its decision in the Yarrow case
where a decrease in value of shares was found not to affect the
applicants to such an extent that they could be considered victims
within the meaning of Article 25 (Art. 25) of the Convention.  The
Commission maintains this position here.

        However, the applicant has also complained under Article 1 of
Protocol No. 1 (P1-1) to the Convention that he is deprived of his influence
and power over the companies in which he holds shares.  In this
respect the Commission observes that a company share is a complex
thing.  It certifies that the holder possesses a share in a company
together with the corresponding rights.  This is not only an indirect
claim on company assets but other rights, especially voting rights and
the right to influence the company, may follow the share.  In these
circumstances the Commission would not exclude that the applicant may
claim to be a victim of an alleged violation of Article 1 of Protocol
No. 1 (P1-1) and this complaint is not rejected for this reason.

        In the present case the Commission recalls that the second
applicant owns shares in five companies liable to contribute under the
new system.  There is no doubt that these shares are "possessions"
within the meaning of Article 1 of Protocol No. 1 (P1-1).

        However, in the present case, the Commission also recalls that
the second applicant has not been compelled in any way to surrender
his shares nor is he liable to contribute to the tax system in
question.  The issue which might arise is therefore only whether the
second applicant's power or influence over the companies as
shareholder is protected by Article 1 of Protocol No. 1 (P1-1) and, if so,
whether the applicant's situation was indeed of such a character that
the right secured to him by that provision has been infringed.

        The Commission does not find it necessary, however, in this
case to decide whether the power or influence a shareholder may
acquire over a company is a "possession" within the meaning of Article
1 of Protocol No. 1 (P1-1), because even assuming this to be the case the
present case does not disclose any appearance of a breach of this
provision.  In the companies in which the second applicant holds
shares, his shareholdings are of such size that he cannot in his
capacity as shareholder control any of these companies.  There has
accordingly not been any interference with his rights under Article 1
of Protocol No. 1 (P1-1) and it follows that the complaint is manifestly
ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of the
Convention.

3.      The applicants have also complained that their rights under
Articles 17 and 18 (Art. 17, 18) of the Convention have been violated.
These provisions provide as follows:

        Article 17 (Art. 17)

        "Nothing in this Convention may be interpreted as
        implying for any State, group or person any right to
        engage in any activity or perform any act aimed at the
        destruction of any of the rights and freedoms set
        forth herein or at their limitation to a greater extent
        than is provided for in the Convention."

        Article 18 (Art. 18)

        "The restrictions permitted under this Convention to
        the said rights and freedoms shall not be applied for
        any purpose other than those for which they have been
        prescribed."

        As has been indicated above, the applicants consider that the
legislation in question aimed at the destruction of rights contrary to
restrictions permitted under the Convention.

        The Commission has already found that the adoption and
application of the new legislation was compatible with Article 1 of
Protocol No. 1 (P1-1).  Insofar as it concerned the first applicant the
interference could be considered justified as being "to secure the
payment of taxes or other contributions" within the meaning of Article
1 of Protocol No. 1 (P1-1) and insofar as it concerned the second applicant
there was no interference with the rights secured by Article 1 of
Protocol No. 1 (P1-1).  For similar reasons the Commission does not consider
that the enactment and application of the 1983 Acts aimed at the
destruction or the excessive limitation of the applicants' rights
under the Convention.

        The Commission accordingly finds no breach of Article 17 or
Article 18 in conjunction with Article 1 of Protocol No. 1
(Art. 17+P1-1, 18+P1-1) and it follows that this part of the
application is also manifestly ill-founded within the meaning of
Article 27 para. 2 (Art. 27-2) of the Convention.

4.      The applicants, invoking Articles 6 and 13 (Art. 6, 13) of the
Convention,   have furthermore complained that Swedish law provides no
effective  remedy before Swedish courts or other authorities with
regard to the questions arising in the present case.

        With regard to Article 6 (Art. 6) of the Convention the Commission
recalls that it has already stated above that the system introduced in
Sweden was based on a new tax, the so-called profit-sharing tax, which
amounted to twenty per cent of a specified amount of the profits of
the company in question.  Further the first applicant was obliged to
pay an increased contribution to the national pension scheme.  The
Commission considered this system to be covered by the Contracting
States' power of taxation expressly recognised by the Convention.

        The Commission has constantly held that Article 6 (Art. 6) is not
applicable to proceedings regarding taxation (cf. No. 2552/65, Dec.
15.12.67, Collection 26, p. 1, No. 2717/66, Dec. 6.2.69, Yearbook 13
p. 176, No. 8903/80, Dec. 8.7.80, D.R. 21 p. 246 and No. 9908/82, Dec.
4.5.83, D.R. 32, p. 266).  It follows that this part of the application
is incompatible ratione materiae with Article 6 (Art. 6) of the Convention
within the meaning of Article 27 para. 2 (Art. 27-2).

        With regard to Article 13 (Art. 13) of the Convention the Commission
recalls that in its judgment in the case of Klass and others the
European Court of Human Rights stated that "Article 13 (Art. 13) must be
interpreted as guaranteeing an 'effective remedy before a national
authority' to everyone who claims that his rights and freedoms under
the Convention have been violated" (Eur. Court H.R., Klass and
others judgment of 6 September 1978, Series A No. 28, p. 29, para.
64).

        The Commission has stated in its Report in the case of
Sporrong and Lönnroth against Sweden that it is "obvious that it
(Article 13) cannot be considered to give an unqualified right to a
remedy to anyone in respect of any complaint as soon as he chooses to
invoke the Convention."  According to the Commission it is necessary
"to take account of the nature of the acts complained of" (Comm.
Report 8.10.80, para. 155).

        In the case of Young, James and Webster against the United
Kingdom the Commission stated that "it cannot be deduced from Article
13 (Art. 13) that there must be a remedy against legislation as such
which is considered not to be in conformity with the Convention.  Such
a remedy would in effect amount to some sort of judicial review of
legislation because any other review - generally sufficient for
Article 13 (Art. 13) which requires only a remedy before a national
authority - could hardly be effective concerning legislation" (Comm.
Report 14.12.79, para. 177).

        The Commission is of the opinion that the applicants'
complaints in substance concern legislation.  However, in applying the
case-law mentioned above the Commission finds no appearance of a
breach of Article 13 (Art. 13) as this Article does not relate to
legislation and does not guarantee a remedy by which legislation could
be controlled as to its conformity with the Convention.

        It follows that this part of the application is manifestly
ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of the
Convention.

5.      Finally the second applicant has complained that in regard to
the relationship between shareholders the trade unions will benefit at
the expense of the other shareholders in a limited company to an
extent that contravenes "the principle of equality" in Article 14
(Art. 14) of the Convention.

        The Commission recalls that Article 14 (Art. 14) has no independent
existence but plays a role only in order to safeguard individuals
placed in similar situations from any discrimination in the enjoyment
of the rights and freedoms set forth in the Convention and its
Protocols.  Furthermore, as already indicated above, the Commission
will only examine the applicant's complaints insofar as the issues
raised affect the applicant directly and personally.

        In the present case the Commission recalls that the second
applicant holds shares in five different companies but that he has no
controlling influence over these companies.  In these circumstances the
Commission finds no appearance of any discriminatory issues which
affected the second applicant directly or personally and it follows
that this part of the application is manifestly ill-founded within the
meaning of Article 27 para. 2 (Art. 27-2) of the Convention.

        For these reasons, the Commission

        DECLARES THE APPLICATION INADMISSIBLE


Deputy Secretary to the Commission         President of the Commission

      (J. RAYMOND)                             (C. A. NØRGAARD)