Government mulling next steps following landmark FIAU judgement finding its penalties unconstitutional

The Government is looking into possible next steps to address the situation brought on by a landmark ruling by the Constitutional Court which nullified the law that allowed the Financial Intelligence Analysis Unit (FIAU) to both investigate and impose fines on firms in breach of anti-money laundering rules.

In a parliamentary question, the Opposition MP Chris Said asked the Minister for Justice what legislative steps are being considered in light of recent court rulings which found public authorities in breach of article 39 (1) of the Constitution.

The Minister, Jonathan Attard, responded: “various sentences issued by the Maltese Constitutional Court are being analysed, so that the necessary steps can be taken in the time to come.”

Article 39 (1) of the Constitution states that, whenever any person is charged with a criminal offence, they shall, unless the charge is withdrawn, be afforded a fair hearing within a reasonable time by an independent and impartial court established by law.

On 30th March, the court found the law which enables the FIAU’s compliance process to impose administrative fines to be unconstitutional and therefore, void.

The ruling took place after the court annulled a fine against a financial services company imposed by the FIAU.

The court said that the FIAU cannot act as judge, jury, and executioner.

The company which was issued a fine, had argued that the law which granted the FIAU the power to investigate alleged breaches to impose administrative penalties breached its fundamental human right to a fair hearing.

In 2022, the FIAU had issued a record quantity of fines, valued at €1.3 million. However, there are reportedly a number of similar court cases challenging the process and fines. Furthermore, it is unclear what is to happen with the new fines issued by the FIAU since the court ruling took place.

The FIAU is not the only authority to have its powers made null by the Constitutional Court. In 2018, the court ruled that the Electoral Commission could not play the role of investigator and judge in cases presented under the party funding law. However, no law has yet been presented in Parliament to address this issue.