Fines imposed by the anti-money laundering watchdog are “completely illegal” as the body does not offer the protections guaranteed by the country’s highest law and the European Convention, a judge has ruled.
Mr Justice Toni Abela ruled that so-called administrative fines issued by the Financial Intelligence Analysis Unit (FIAU) are punitive in nature and quasi-criminal and must be issued by a juridical body that offers the subject persons or companies their basic rights, not least that of being tried by an independent and autonomous tribunal.
“It is amply clear to anyone that these punishments are completely illegal because they are not sanctioned by any law and the law reigns over everyone,” he said in his judgment.
The latest scathing judgment against the FIAU came hot on the heels of another one in which a different judge denounced the “dictatorial procedures” by the FIAU which investigates, prosecutes and fines its subjects “in flagrant breach” of their basic fundamental right to be tried by an autonomous and independent body.
In the ninth decision of its kind concerning the FIAU, Mr Justice Abela was ruling in a case brought by gaming company Online Amusement Solution Limited which in January 2022 was fined almost €387,000 by the FIAU for breaching anti-money laundering rules following an on-site inspection carried out in 2019.
The FIAU had said it had found that the company had failed to report suspicious activity or properly monitor politically exposed players on its gambling sites.
The Birkirkara-based company owns several betting sites, including Champions Bet, Tip Bet, and Bet 14.
The company took the matter to court claiming that its fundamental rights to a fair hearing had been breached.
The court not only revoked the fine imposed by the FIAU but ordered the unit to pay the company €20,000 in compensation for breaching its rights.
The court found that the fine breached the Maltese Constitution and the European Convention of Human Rights which afford independent and fair hearings and the protection from being found guilty of a crime that did not exist.
“The court cannot understand by which stretch of the imagination the FIAU continues to argue that this fine was not punitive in nature,” Mr Justice Abela said. He referred to an FIAU internal document which expressly states that “The fine should be punitive and act as a deterrent to non-compliance”. It also stated that “The fine should be effective in the sense that the subject person should not consider as a ‘mere cost of doing business’ and it should be significant enough to impact on the annual income.”
The court said the fine was so punitive that it could have forced the appellant company to wind up operations.
The judge said punitive fines could only be issued by bodies that offered the necessary legal protections and that those who did not, would not find the court as their defence.
He also described the FIAU’s sanctions policy, through which the fines are calculated, as “convoluted, opaque and byzantine”.
The court again commented on the system adopted by the FIAU in the imposition of fines which, despite being unconstitutional, were also sustaining the body since the amounts are deposited into a fund for its own use.
There are several other pending constitutional cases against the FIAU over this point of law, with the unit already having been found to act as prosecutor, judge, jury and executioner.
The FIAU is subject to more than 20 court cases alleging breach of companies’ constitutional rights, according to data provided to parliament by Finance Minister Clyde Caruana.