The case Insignia Cards Limited (the "Plaintiff") vs. il- Korp ghall-Analizi ta' Informazzjoni Finanzjarja u L-Avukat Tal-Istat (the "Defendant", the "FIAU") was brought before the Constitutional Court (the "Court") on the 24 May 2023, and was presided over by Honourable Judge Lawrence Mintoff.  This case is a landmark judgement which found that the current laws and regulations governing the FIAUs processes are in breach of the right to a fair hearing.  

Facts of the Case

The Plaintiff is claiming that the Prevention of Money Laundering Act (Chapter 373 of the Laws of Malta), the Prevention of Money Laundering and Funding of Terrorism Regulations (Subsidiary Legislation 373.01) and the FIAU Implementing Procedures are not based on the principle of "nullum crimen, nulla poena sine lege" and that they are in breach of the fundamental right to a fair hearing.

More specifically, in brining this action, the Plaintiff is requesting the Court to rule on the following matters:

(1)     the fact that the FIAU is given the power to act as an investigator, prosecutor, and court; and the fact that there is no adequate remedy for an appeal is to be constituted as a breach of the fundamental human rights as detailed under Article 39(1) of the Constitution of Malta (Chapter 1 of the Laws of Malta) (the "Constitution")  and Article 6 (1) of the European Convention of Human Rights (the "Convention");

(2)    the way the investigation was carried out is to be constituted as a breach of Article 6(3) of the Convention and Article 39 (6) (a) of the Constitution; and

(3)    the FIAU abused of their power as well as of the discretion granted to them by law. The Plaintiffs are also claiming that the Defendants acted in breach of Article 39(8) of the Constitution and Article 7 of the Convention.

The Defendants also put forward their defence for the Court to consider.

The Courts Considerations

In considering the Plaintiffs claims, the Court examined the above-mentioned articles as follows:

Article 39 of the Constitution states that "whenever any person is charged with a criminal offence he shall, unless the charge is withdrawn, be afforded a fair hearing within a reasonable time by an independent and impartial court established by law. In the same manner, Article 6(1) of the Convention states that "in the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law".

Naturally, for the above two mentioned provisions to be applicable, the offence in question must be one of a criminal nature.

Criminal or Administrative Nature?

The Court referred to the Engel judgement which identified 3 criteria used to determine whether an accusation is of a criminal or civil nature, these being: (i) the nature of the crime (ii) the nature and severity of the penalty which may be imposed and (iii) the classification of the charge according to domestic law.

Further to the above, the Court went on to state that (i) whilst the accusations are of an administrative nature and (ii) whilst the charge is also to be classified as being administrative in nature, if a fine is used as a deterrent and to impose punishment on the guilty then such offence is to be treated as though it were criminal in nature and hence Article 39 of the Constitution and Article 6(1) of the Convention are to be respected.   

The Court referred to the Federation of Estate Agents vs. Direttur Generali (Kompetizzjoni) etc, judgement, whereby the court had referred to Bendenoun vs. France, which stated that: "Having weighted the various aspects of the case, the court notes the predominance of those which have a criminal connotation. None of them is decisive on its own but taken together and cumulatively they made the 'charge' in issue a 'criminal' one.

Independent and Impartial Court?

After having established that the penalty imposed by the FIAU was one of a criminal nature, the Court ruled that the FIAU cannot be deemed to be an independent and impartial court and hence any person faced with such administrative proceedings before the FIAU is not given the right to a fair hearing.

The Court confirmed that a decision taken by the FIAU cannot be deemed to be a decision taken by neither a court nor a tribunal. Even more so, the decision cannot be deemed to be one which is independent and impartial.

Breach of Article 39 (6) (a) of the Constitution and Article 6(3) of the Convention?

Article 39(6)(a) of the Constitution states that "Every person who is charged with a criminal offence shall be informed in writing, in a language which he understands and in detail, of the nature of the offence charged". In the same manner Article 6(3)(a) of the Convention states that "Everyone charged with a criminal offence has the following minimum rights: to be informed promptly, in a language which he understands and in detail, of the nature and cause of the accusation against him".

Here the Court stated that whilst the FIAU is not expected to provide all information and exact details regarding the breaches which they had identified, the FIAU were expected to provide a clearer explanation of the investigation which they were carrying out as well as the alleged matters about which the FIAU intended to issue a penalty. 

Article 39(8) of the Constitution and Article 7 of the Convention

Article 39(8) of the Constitution and Article 7 of the Convention insinuates that a person must know from the wording of the relevant provision and, if need be, with the assistance of the court's interpretation of it, what acts and omissions will make him criminally liable and what penalty will be imposed for the act/omission.

The Plaintiffs claimed that the way in which the Regulations and Implementing Procedures are drafted is too generic, and that when the FIAU issued the minded letter, they did provide them with an indication of what the penalty issued could potentially be.

The Courts Conclusion

In consideration of the above, the Court ruled that the law establishing the FIAU does not provide for an adequate and constitutional appeal process. The Court went on to state that the FIAU cannot be considered as an independent and impartial court, and hence accepted the Plaintiff's first claim confirming that the Plaintiffs fundamental human rights had been breached.

The Court also went on to state that once the law in issue violates the fundamental human rights, all that occurred under such law cannot be considered to have respected the same fundamental human rights.

 

Bettina Gatt is an Associate at Ganado Advocates