A critical analysis of the penalty regime contemplated in the 'Prevention of the Money Laundering Act' : a human rights perspective

Abstract

Between 2020 and 2022, 10 constitutional applications were filed before the Constitutional Court in order to challenge administrative penalties imposed by the FIAU, on account of their alleged violation of fundamental human rights, including the right to a fair trial, right to property and non bis in idem. This dissertation critically analyses the administrative penalty regime under the Prevention of Money Laundering Act (PMLA) and Prevention of Money Laundering and Funding of Terrorism Regulations (PMLFTR), from a human rights perspective, in order to anticipate the decisions that the Constitutional Court may come to in the aforementioned on-going cases. Within the dissertation, the Engel Criteria is utilised in order to determine whether the administrative penalties under the PMLA classify as criminal charges. Furthermore, the procedure leading to the determination of administrative penalties under the PMLA is examined in order to determine whether such a procedure is in line with the requirements set for a criminal charge under the Constitution of Malta, Charter of Fundamental Right of the European Union and European Court of Human Rights. This examination was substantiated by case-law of the European Court of Human Rights and the European Court of Justice. Local Constitutional Court judgements delivered in the tax, competition and electoral law sectors were also of relevance in this examination. The examination in this dissertation suggests that the administrative penalty regime under the PMLA may be in breach of fundamental human rights on several counts. Should the Constitutional Court, in the on-going cases, come to similar conclusions, a reform of the PMLA/PMLFTR will be necessary to remedy such breaches. Thus, the dissertation makes some proposals for reform in this regard, including the legislative abatement of penalties, as well as a redesign of the process leading to the determination of a penalty and the contestation procedure. This dissertation represents information current as at 19 April 2022.