Two Zenith Finance directors want a law prohibiting them from producing FIAU testimony as evidence struck down as unconstitutional.

Lorraine Falzon and Matthew Pace, as sole shareholders of the company, have filed constitutional proceedings to have a provision of the Prevention of Money Laundering Act nullified.

That provision prohibits disclosure of information by the Financial Intelligence Analysis Unit, save for four exceptions listed in the Act.

Falzon and Pace face money laundering charges as part of a case brought by prosecutors in March 2021 against former OPM chief of staff Keith Schembri and others. They are pleading not guilty.

Those proceedings are now awaiting trial before the Criminal Court, after Falzon and Pace opted to have their case decided by a jury rather than by the Magistrates’ Court.

But as the upcoming trial draws closer, the defendants are claiming that they are effectively being denied by the law itself the right to produce their “best evidence.”

They say the case against them stems from an FIAU investigation they were informed about in 2016. Two years later, their firm was fined €38,750 for administrative breaches by the FIAU. They paid the fine after being threatened with garnishee orders. 

Then in 2021, Falzon and Pace were arrested and criminally charged, both as Zenith representatives and in their personal capacity. They say those charges stem from identical facts to those they had been fined for in 2018 and that they are therefore being charged twice for the same crime – something not allowed by Malta’s criminal justice system.

In their attempt to prove that, they attempted to produce FIAU testimony. But FIAU representatives have refused to provide information under oath, saying article 34(1) of the Prevention of Money Laundering Act prohibits them from doing so. A court upheld that refusal.

Through their lawyers, Falzon and Pace are arguing that the law is denying them the right to present evidence that could exonerate them of serious charges.

This was a “classic and most serious case of inequality of arms amounting to a breach of the right to a fair trial,” argued the lawyers, in fresh proceedings against the State Advocate and the FIAU.

They requested the court to nullify this legal provision and to order the FIAU to testify and present all necessary documents, both at the criminal trial as well as in the constitutional proceedings.

Lawyers Edward Gatt, Mark Vassallo and Shaun Zammit signed the application.