FIAU fines unconstitutional, court rules for fifth time

The constitutional jurisdiction of the civil court has ruled against the Financial Intelligence Analysis Unit in yet another case whereby an FIAU fine was deemed unconstitutional.

The court ruling by Judge Toni Abela is the fifth decision against the unit since March 2023, which has seen several of its fines dismissed in a string of similar court cases.

Notary Dr Roderick Caruana challenged a September 2021 decision by the FIAU, which fined him €61,573 for failing to identify the ultimate beneficial owners of financial structures he was involved with, subsequently breaching money laundering rules.

The court found that the fine breached Article 39(1) and 39(6)(a) of the Constitution, protecting fundamental rights to independent, fair hearings and detailed notification of the offence.

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

Judge Abela ruled that €3,000 of the fine that Caruana already paid must be returned, with court expenses split between the FIAU and the State Advocate.

The case is the fifth such sentence following court cases against the FIAU, which found a €244,679 fine against XNT Ltd., a €340,058 fine against Lombard Bank, a €373,670 fine against Insignia Cards Ltd. and a €435,576 fine against Phoenix Payments Ltd. to be unconstitutional.

The cases have so far amounted to more than €1.3 million in lost fines due to the unconstitutionality of the legislation governing the FIAU’s procedures, calling the unit’s and legislation’s effectiveness into question.

Data tabled by Finance Minister Clyde Caruana in response to a 15 May parliamentary question tabled by Opposition MP Chris Said shows that the FIAU is subject to 15 other court cases alleging breaches of constitutional rights under Article 39(1) of the Maltese Constitution.