Usury under Maltese law

Abstract

This research exercise is a detailed study of one particular offence usury, that is the charging of excessive and/or disproportionate interest on the principal amount of a loan. The Chapter One is aimed at introducing and placing the reader in the proper perspective. It secures the reader's understanding by illustrating the nature of usury its historical background and the reasons which throughout the years prevailed for its restraint. An outline of the circle of usury is depicted, alongside with indicating who are the borrowers and their reasons for resorting to usury. A review of the build-up in Malta for the introduction of usury is given whilst daring to indicate a new phenomenon termed as federal usury. Chapter Two gives a review of the situation in the United Kingdom whereby after long centuries in which usury was penalized, usury law was eventually abolished early last century. Chapter Three reviews the situation in our neighbouring country Italy. It analyses the dispositions of the Italian Codice Penale which sanctions usury as an offence whilst shedding light on the social implications of this offence. Chapter Four is entirely devoted to money laundering, considering the fact that usury on a large scale can generate large sums of money, and money laundering might come in very handy for theoffender to legitimize the earnings of his illegitimate dealings. A review of usury related crimes is given in Chapter Five, citing three land-mark cases in recent Maltese criminal jurisprudence, highlighting factors which were common in all three and their eventual trials. A Maltese dimension of usury is presented in the subsequent Chapter Six. It evaluates the situation prior to the introduction of usury as an offence, the problems encountered then and the scenario following its introduction. Chapter Seven assesses various legislations which are linked to usury, namely The Financial Institutions Act, The Control exchange Act and The Central Bank Act. By way of conclusion , Chapter Eight rounds off this research by identifying some points which need to be worked upon and accordingly putting forward a number of proposals for amendments which in my opinion are needed for fine tuning the existing Section 298C of the Criminal Code.