Ninth FIAU fine thrown out in another constitutional court challenge

The courts have ruled against the Financial Intelligence Analysis Unit (FIAU) for the ninth time in a string of cases which have seen millions of euros worth of fines cancelled.

The court ruling by Judge Toni Abela is the latest decision to challenge the FIAU’s regulatory authority following a number of cases since March 2023 which have questioned the constitutionality of how the unit’s fines are issued.

On Thursday, Judge Abela ruled that a €400,000 fine levied in 2022 against gaming company Online Amusement Solutions Limited was in breach of constitutional articles.

The FIAU was told to refund the fine’s costs to the gaming company and pay €20,000 in compensation.

The court found that the fine breached Article 39 of the Maltese Constitution and Article 6 of the European Constitution of Human Rights, protecting fundamental rights to independent, fair hearings and detailed notification of the offence.

The court heard how “since the €386,567 fine was significant, the company [Online Amusement Solutions] had to shut down its operations,” indicating that the fine was “punitive.”

“The court cannot understand by which stretch of the imagination the FIAU keeps arguing that this fine was not punitive in nature,” Abela said.

He said the court’s judgement should be based on “whether the so-called ‘administrative’ fines are in fact punitive in nature,” making the FIAU’s issue of them unconstitutional.

Referring to the FIAU’s sanctions policy, Abela said that upon examination, “one realises that the fines are calculated through a convoluted, opaque and byzantine instrument [the policy].”

The fine had been issued by the Prevention of Money Laundering and Funding of Terrorism Regulations, legislation introduced in 2018, now consistently being found to breach constitutional rights in court.

The case is the ninth such sentence following court cases against the FIAU, with more expected in the future.

The rulings have seen fines against XNT (formerly Exante) and Insignia Cards cancelled, which reached the public eye due to their links with former Labour Party Ministers Konrad Mizzi and Chris Cardona.

A fine against Phoenix Payments, the company that called out the FIAU’s attempts to “flex its muscles” following Malta’s greylisting by the Financial Action Task Force, was also cancelled.