Over the past years, our courts of constitutional jurisdiction have been adamant and consistent in ruling that only a court of law may impose hefty administrative fines.

Consequently, the law allowing the Financial Intelligence Analysis Unit (FIAU) and other public corporations to impose fines of €1 million and over without any intervention by the law courts was declared null and void.

There have been around 15 cases against the FIAU on this point. The FIAU, at presumably huge legal expense, contested every one of them. The score right now is against the unit. 10-0; all cases were decided against it.

The government tried to amend the constitution to allow organs which are not a court of law to impose such huge fines. Such an amendment needed a two-thirds majority to be approved. The opposition did not oblige; after all, which opposition in the whole wide world would vote for a reduction and curtailing of the fundamental rights of the individual as determined by the courts in Malta?

The government then tried a diabolical move. It proposed an ordinary law amending another ordinary law, namely the Interpretation Act, so that administrative fines imposed by FIAU would not be considered criminal in nature and, therefore, not subject to the fair hearing rule. A furore arose. The Venice Commission adversely commented on such a move.

With its tail between its legs, the government withdraw the bill.

Now the government has secretly appointed an advisory committee. The setting up of the committee was kept secret. No press conference or press release this time. The opposition was not invited to appoint any member. The scope of this committee is presumably that of finding a way how to retain the status quo in spite of the constant jurisprudence of the courts of law of constitutional jurisdiction. Had it been otherwise, what would have been simpler than applying the rules contained in 10 judgments given by the court?

After all, in similar circumstances, where the right of the director general for competition to impose administrative fines was some years ago successfully challenged, the government promptly amended the Competition Act, in line with constitutional jurisprudence, so that the right to impose administrative fines was taken away from a public authority and given to a court of law. What is the problem with applying the same principle to the FIAU and the Malta Financial Services Authority (MFSA)?

The committee would be wise to acquire a copy of an excellent book published by ELSA, one of the law students’ organisations at the university, namely Administrative Fines and FIAU; it clearly defines the issue and even proposes a bill for the situation to be regularised in line with current constitutional principles.

The law students have shown us the way: what is the problem with following it?

There are two myths which are sometimes spread to confuse the issue. The first is that the EU law requires an organ such as FIAU to impose administrative fines.

As the book published by ELSA indicates, the EU law does not interfere as to who imposes such administrative fines – apart from the fact that, in Malta, the supreme law, namely the constitution, always prevails.

The second myth is that any attempt to allow organs which are not a court of law to impose administrative fines is required to align our position with that of the European Convention on Human Rights. Nothing is further from the truth.

Now the government has secretly appointed an advisory committee- Tonio Borg

The convention allows the members states of the Council of Europe to be more liberal and generous in protecting human rights. In matters relating to criminal proceedings, unlike the convention, such proceedings, according to Malta’s supreme law, can only be conducted by a court of law.

The convention allows more rights to be granted in member states. What it does not allow is if a member state grants less.

The setting up of the committee is a cause for concern; does it mean, in view of the government’s past attempts to undermine the jurisprudence of our courts, that attempts will be made to evade the effects of our jurisprudence by arguing that the protection of article 39 of our constitution, which guarantees that only a court of law can decide cases of a criminal nature, does not apply to certain cases? Such as when the law allows an appeal from a decision of FIAU to a court of law?

The committee should be aware that in Rosette Thake (2018), the highest court in Malta ruled that at every stage of proceedings in imposing an administrative fine, only a court of law, and no one else, may impose a sanction which, even if termed administrative, is criminal in nature. What can be more of a criminal nature than the prevention of money laundering?

One word of caution: the FIAU does not impose administrative fines on persons or authorities guilty of the crime of money laundering: such persons and authorities are arraigned before a court of criminal jurisdiction by the police.

All the major banks have been administratively fined by FIAU, not because they were guilty of money laundering but because they did not abide by the procedure in collecting and keeping files on their clients as they should.

If the committee, in its advice to the government, proposes an amendment to the constitution to allow FIAU to impose such fines, such proposal would be futile. The opposition has already, in July 2021, voted against such an amendment which, incidentally, required a two-thirds majority of all MPs to be approved. Why propose it again?

If the report suggests any other way to bypass the strict parameters of the jurisprudence of the courts of constitutional jurisdiction, it would be inviting another round of court litigation, making matters even more difficult rather than solving them.

One hopes that common sense will prevail though such sense is not always so common. 

Tonio Borg is a former European commissioner, a former deputy prime minister and an associate professor of public law at the University of Malta.