By June 2022, Malta had been gray-listed by the FATF as a money laundering hub. The greylisting was undoubtedly the result of failures by the country’s Financial Intelligence Analysis Unit (FIAU). However, its officials have almost unlimited powers without transparency. They meet behind closed doors to decide on punishments. Although they have such powers, they do not declare their conflicts of interest. A number of companies have sued the FIAU.
A recent study showed that billions are still being laundered from illegal gambling in Malta’s casinos. The FIAU is also responsible for this. Despite this obvious failure, FIAU officials act with incredible omnipotence and without public accountability.
The Maltese FIAU acts as judge, jury and executioner for businesses and tradesmen who have been heavily fined by FIAU officials. Article 39 of the Maltese Constitution states that only a court presided over by a judge or magistrate can impose fines for criminal offenses.
In Malta, such fines cannot be imposed by only one court since 2016, following a ruling by the Constitutional Court. In 2018, the same court ruled that such cases must be made available at both the first and second instance, i.e. at all stages of the proceedings.
The companies also claim that the FIAU violated Article 6 of the European Convention on Human Rights. This article states that every person has the right to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law in the determination of his civil rights and obligations or of any criminal charge against him.
On March 30, 2023, a judgment is expected in a case brought by Phoenix Payments Limited against FIAU. This judgment may break the neck of the FIAU. Our partner Fintelegram has been informed that FIAU officials have done everything they can to delay such a trial for fear of being personally sued for damages in the future.
FIAU officials are accused of selectively deciding who to fine or not. Calamatta Cuschieri Investments Services was not fined despite shocking revelations in court. The company handed over huge amounts of cash to convicted criminals. The FIAU has also failed to punish Pio Valletta, the flamboyant lawyer who lives in a luxurious villa in Mellieha and drives around in a Bentley.
The FIAU includes Alfred Zammit, who is known in Malta for signing a document exonerating Pilatus Bank of any wrongdoing. Other officials include Kristina Arbociute and Rudolf Muscat, who have made the headlines for the wrong reasons. It has become a habit for the FIAU, headed by Kenneth Farrugia, to ignore questions from the international media.