The former prime minister's chief of staff Keith Schembri, his father and two business associates are calling on the courts to cancel orders freezing their assets, issued in money laundering proceedings.
Schembri, his father Alfio, Malcolm Scerri and Robert Zammit had the freeze imposed on the same day they pleaded not guilty to money laundering and other financial crimes in March 2021.
Ever since, all their assets, both movable and immovable, have been frozen, save for an annual statutory allowance of €13,976.24.
Schembri and his associates said the orders were “draconian” and breached their fundamental rights.
In a recent decree delivered by a Magistrates’ Court against Progress Press, the court held that it lacked the power to “vary the freezing order by reducing it to a determined amount or by limiting it to some particular property of a determinate value.”
That position was also been adopted in separate proceedings against two Zenith Finance directors.
Schembri’s lawyers, Edward Gatt and Mark Vassallo, are claiming that this all boiled down to a situation where their clients had no ordinary remedy before the courts to challenge the far-reaching effects of such freezing orders.
They said that although courts may vary freezing order in particular circumstances, they are adopting a restrictive interpretation
They observed that in terms of the Money Laundering Act, the burden to prove the lawful source of funds shifted onto the accused. Yet, recent court decisions showed that, in practice, the accused would never get the opportunity to satisfy this proof.
There were only two scenarios for the accused: either cancellation of the freezing order upon acquittal or confiscation of all assets upon conviction.
The lawyers observed that judgments of the European Court of Human Rights have consistently held that when an accused person is even temporarily deprived of his property, the State must ensure that there is a reasonable and proportionate link between the ultimate purpose of the freezing order and the means used to achieve that purpose.
The State was duty-bound to offer a remedy in such circumstances, but in effect under Maltese law such a remedy was non-existent.
They noted that in a recent judgment in Shorazova vs Malta, the European Court considered that “the freezing of all of the applicant’s property (in Malta) is, by its nature, a harsh and restrictive measure.”
Such an order was “capable of affecting the rights of an owner to such an extent that his or her main business activity or even living conditions may be put at stake,” observed the court.
Not only was the ECHR vociferous in its criticism of such “draconian” orders, but it should also be borne in mind that those targeted, like Schembri and the other co-accused, were innocent until proved otherwise, the lawyers argued.
They called on the First Hall, Civil Court in its constitutional jurisdiction to declare such breach, to cancel the relative freezing orders, to liquidate moral damages payable by the State and to issue all necessary measures accordingly.