Lombard Bank fires legal challenge at ‘unconstitutional’ FIAU fine

Four other financial firms have also filed constitutional cases against the anti-money-laundering unit


Lombard Bank has filed a case protesting the “unconstitutional” imposition of a €340,000 fine for alleged money laundering offences by the Financial Intelligence Analysis Unit, claiming it has been denied its right to a fair hearing.

The lender, which has already lodged an appeal against the fine with the Appeals Court, is asking the Constitutional Court to examine whether its constitutional right to have criminal charges decided by a court of law has been breached.

It asks the court also to rule on its protest against the arbitrary nature of the fine itself as well as the manner in which the FIAU investigation, under Director Kenneth Farrugia, was carried out, the judgement was decided and the penalty amount fixed.

The government owns 49.1% of the bank, with the rest of the shares held by private investors. It was listed on the Malta Stock Exchange in 1994.

Lombard joins four other financial companies that have also submitted constitutional cases disputing the legality of penalties imposed by the FIAU: Insignia Cards, MPM Capital, Vivaro and Credence Corporate and Advisory. The amounts they’ve been ordered to pay range from €120,000 to €1.2 million.

The FIAU was granted the controversial powers to bypass the criminal justice system and levy heavy fines in money laundering cases they investigate, adjudicate and penalise themselves, in 2017.

Despite an Appeals Court judgement in December last year ruling that FIAU fines must be capped at 10% of a bank’s turnover – and slashing the fine meted out to Satabank from €3.7 million to €851,000 – the FIAU declared in January that it disagreed with the Court’s conclusion and would therefore be ignoring it.


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Godfrey Leone Ganado
Godfrey Leone Ganado
1 year ago

Money laundering is attractive for boosting the GDP. Satabank alone, has generated Euro 3.7 million for the FIAU, and Euro 10 million for the appointed ‘competent person’.
We don’t yet know what the two competent persons of Pilatus Bank, Mr Connell and Dr Ancilleri have cost so far. One would also have to add, what the third competent person just appointed, will cost.

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