Last Updated on Tuesday, 6 June, 2023 at 9:31 am by Andre Camilleri
Finance Minister Clyde Caruana said that the decisions given by the first Court that the laws and regulations that govern the Financial Intelligence and Analysis Unit’s processes were unconstitutional, are of concern.
Caruana was replying to a parliamentary question made by PN MP Chris Said, who asked if government was considering making legislative amendments against the laws that regulate the powers of the FIAU to impose substantial penalties.
In his reply, Caruana referred to the two judgments, saying that he is informed that an appeal has already been lodged by both the State Attorney and by the FIAU on the case of Phoenix Payments Limited. Caruana then said that the term of appeal on the case of Insignia Cards Limited has not yet expired, and therefore he could not comment.
He pointed out, however, that every decision taken must be made in the best interest of the country.
“It is worth pointing out that these decisions which were given by the first Court are of concern regarding the enforcement mechanism on violations of anti-money laundering regulations,” Caruana said.
He added that this is especially in light of the fact that the country has just gone through the FATF greylisting process, precisely because there was a lack of effective enforcement against violations of this nature.
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.
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.
Both companies won their cases.
Times of Malta reported on Monday that a judge again ruled that the administrative penalties imposed by the FIAU were unconstitutional, and in breach of the rights of people.
The latest judgment involved a case brought by Lombard Bank, which was fined by the FIAU over alleged money laundering offences. The FIAU had expressed its concern that not all of the bank’s documentation was centralised.
Its report also noted “serious shortcomings” in the way Lombard had scrutinised certain transactions taking place through the customers’ accounts, it was reported. The bank fought back, claiming its rights to a fair hearing had been breached, also challenging the FIAU’s power in acting as investigator, prosecutor, and judge. Lombard argued that the FIAU was not an independent and impartial court and was therefore out of line with the requisites of the constitution.