FIAU’s administrative penalties against Lombard Bank ‘unconstitutional’

Lombard Bank has said, in a statement, that a court has found the FIAU’s administrative penalties against the bank to be ‘unconstitutional’.

Lombard Bank had been slapped with a €340,058 fine by the Financial Intelligence and Analysis Unit (FIAU) over breaches of money laundering regulations.

The Bank had instituted legal proceedings before both the Court of Appeal and the First Hall Civil Court, in its Constitutional Jurisdiction claiming, among other things, a breach of its fundamental human rights.

“The First Hall Civil Court, in its Constitutional Jurisdiction today delivered a judgement ruling, inter alia, that the FIAU decision in the Bank’s regard as well as the relative administrative penalties are null and void as they are considered unconstitutional and in breach of the Bank’s right to a fair hearing by an independent and impartial court as enshrined in the Constitution of Malta.”

“While this judgement may be appealed, the Bank welcomes the Court’s decision and remains committed to ensuring continued vigilance and investment in its technical and human resources so as to prevent the use of the Bank’s services for any form of illicit activity.”

This is the latest in a series of judgements delivered by the court against the FIAU.

Insignia Cards Limited had filed a case in the First Hall of the Civil Court (in its Constitutional Jurisdiction) against the FIAU and the State Advocate. The company had said that on 24 November 2020, the FIAU communicated its decision to impose an administrative fine in the amount of €373,670. The fine was imposed after the FIAU found various shortcomings in the company’s operations.  Insignia Cards had felt aggrieved by this decision and filed an appeal before the Court of Appeal, which it won.

The FIAU had also imposed a €435,576 fine to a payment processing company, Phoenix Payments Ltd, for a series of alleged anti-money laundering breaches linked to cryptocurrency. The company had challenged the FIAU’s power to act as investigator, prosecutor and judge when it slapped it with a €435,000 fine in 2021, saying that the financial services watchdog had breached the company’s rights to a fair hearing, which it won.