Malta was grey listed by the Financial Action Task Force (FATF) in June 2021. This had been long coming. In a bid to not become grey listed and impress the FATF, Malta’s Financial Intelligence Analysis Unit (FIAU) was over-fining individuals and firms. The FATF did not fall for such games and grey-listed Malta. The FIAU continued issuing very high fines to targeted companies and individuals. Malta has now been removed from the FATF grey list after a year. Some companies and individuals who were hugely fined took legal action against the FIAU.
Reputation-Damaging Over-Finements
Maltese Courts have lambasted the FIAU for issuing fines, at times eight times or more than what should have been imposed. A notary was fined €58,000, and her name was published, given that the law stipulates that fines over €50,000 should be published. However, the notary challenged this fine in court. On 15th June 2022, the Judge ruled that the fine should only be €7,000.
Integra Private Wealth Limited was fined over €1110,000 by the FIAU in July 2020. The company filed an appeal at Malta’s Courts, and the Judge reduced the fine to around €15,000.
A fine imposed on the now-defunct bank Satabank by Malta’s FIAU has been slashed from €327,500 to €68,000 after the bank appealed the penalty. This fine is separate from a massive €3.7 million fine that the FIAU slapped onto the bank for its anti-money laundering shortcomings. That fine was reduced to €851,000 upon appeal.
The FIAU risks being sued by these individuals and organizations for damaging their reputation due to the publication.
Malta’s Court of Appeal (Inferior Jurisdiction) decided that while the enforcement was correct, the fine was too high for the legal provisions which had been breached.
Secretive Judgments
The judgments are secret ones. The FIAU has access to the judgments and to the way the Courts reach their decision. However, the public has no access to the judgment and the proceedings.
The FIAU officials who decide whether to dish out fines or not, and the size of the fines, include FIAU director Kenneth Farrugia, his deputy Alfred Zammit (pictured right), Elena Tabone, Jonathan Phyall (pictured left), and Daniella Mizzi.
They meet behind closed doors on unannounced dates. Moreover, these officials do not publish their conflicts of interest. FIAU officials include Kristina Arbociute, who worked for XNT, a company investigated by the FBI.
Fintelegram has reported how the FIAU has so far failed to take action against Calamatta Cuschieri Investments Services despite shocking court revelations.
