Anti-money laundering unit collected less than half the value of fines it issued

The Financial Intelligence Analysis Unit, the government’s anti-money laundering watchdog, has recuperated less than half of the millions of euros of fines issued in 2023 to companies it investigated for malpractices.

The unit’s effectiveness was repeatedly questioned last year through a raft of constitutional court cases, which found that many of the fines to companies in breach of money laundering regulations were issued unconstitutionally, resulting in their forfeiting.

In response to a parliamentary question by opposition MP Jerome Caruana Cilia, Finance Minister Clyde Caruana claimed that of some €3.4 million in fines issued in 2023, only €1.4 million had been collected.

“One needs to keep in mind that fines determined by the FIAU may be changed following court decisions,” he said.

“When the unit’s fines are appealed in front of the courts, the amount due is not paid… until the court’s final decision,” he concluded.

The millions in fines, all issued in 2023, were spread over 144 different cases. Until the end of last year, just 96 of them were paid, leaving almost €2 million in unpaid dues.

Over the last year, The Shift has reported how the FIAU’s fines have repeatedly been found to have been issued unconstitutionally by the Constitutional Court.

The court has repeatedly ruled that the fines breach constitutional articles on the rights to independent, fair hearings and detailed notification of offences.

By September 2023, the court rulings on FIAU fines issued over the previous years had resulted in more than €1.3 million being declared null, never to be paid.

In 2023 alone, the FIAU faced dozens of court cases, all by fined companies calling the unit’s modus operandi into question. The fines, issued according to the 2018 Prevention of Money Laundering and Funding of Terrorism Regulations, place heavy doubts on the effectiveness of the unit and the legislation governing it.

Last month, former FIAU deputy director Alfred Zammit was appointed director of the anti-money laundering unit after serving as its acting director since April.

Zammit was given the role despite a track record that included the unjustified dismissal of an FIAU investigator and his issuing of a clean bill of health to Pilatus Bank despite its deficiencies.