Yorgen Fenech's lawyers cite 'ambiguity' in new freezing order law in pre-trial sitting

Uncertainty hangs over what a newly-introduced law on the proceeds of crime actually means for cases that have already started.

Lawyers of Yorgen Fenech, who is currently indicted for the murder of journalist Daphne Caurana Galizia, argued the new law is ambiguous, during a pre-trial sitting.

The judge remarked that it would lead to constitutional issues if different laws are applied in otherwise similar cases.

The transition to the new legal regime introduced on 9 February to regulate, amongst other things, freezing orders, appears to be causing some consternation amongst practitioners.

Announced in November last year, the “Act to amend various laws relating to the proceeds of crime,” was trumpeted as the solution to problems faced by defendants in financial crime cases whose entire asset bases, bar an amount established by law, were frozen by court orders - often for years - until their case is decided.

Under the new legal regime, prosecutors applying for freezing orders must now specify what property or how much money is to be frozen, within a 90-day period starting from the arraignment, which may be extended twice at most, only if the court deems it necessary.

One predictable upshot of this is that prosecutors are now faced with the additional, often complex and difficult task of establishing the provenance of every asset belonging to a defendant, and to do so within a restricted time.

For cases which have already started, the new law helpfully included transitory provisions which ought to provide guidance on which law applies: the blanket freezing order over all assets or the assets deemed to be proceeds of crime that are established in the 90-day period.

On Friday, Madame Justice Edwina Grima heard submissions on one such request, filed by Yorgen Fenech.

Prosecutor Godwin Cini told the judge that as the new money laundering law had been invoked, the court would now have to give a ruling on which set of laws to apply, after which the prosecution had 90 days in which to bring evidence of the assets it identified.

Lawyer Charles Mercieca, assisting Fenech, argued that the prosecution should not be afforded the full 90-day period to do so against his client, arguing that there appeared to be two types of proceedings considered in the new law. “New ones and mature ones which have been ongoing for years and in which the prosecutor is taken to have more information about the amount allegedly laundered.”

Cases differed in complexity, argued the prosecutor. “Here we have a complicated case in which it is difficult to quantify the amount and which requires time to carry out.”

The judge, looking at the law, pointed out that during the 90-day period, the prosecution was required to indicate the property that should be confiscated, and not the total amount.

“The issue is that if the court sees that it is impossible to establish the amount, it can choose to continue under the previous regime,” said the judge.

The defence insisted that the law should apply equally to everyone. “On what basis are we going to apply the law differently to people arraigned today and persons arraigned five years ago.”

Cini pointed out that the law also gave the judge the option of hearing witnesses before deciding whether to uphold such a request and stressed that this interpretation of the law had been successfully adopted in the United Kingdom, many years ago.

Should the defendant’s request be upheld, the prosecution would be required to exhibit evidence so as to establish the amount to be frozen. Because of this, the prosecution had summonsed journalist Matthew Caruana Galizia, the victim’s son, to testify. Caruana Galizia gave the court an in-depth account of the money trail that his mother, the murder victim, had uncovered, linking Fenech to 17 Black and, in turn, the Electrogas consortium.

Cini disagreed with the defence’s interpretation of the situation and explained that the fact that no motive had been conclusively established for Daphne Caruana Galizia’s murder “does not mean that the Electrogas angle had been excluded.”

“This discussion is about whether a law is drafted clearly or not,” lawyer Therese Comodini Cachia, assisting the Caruana Galizia family as parte civile told the judge. “Where you don’t have, clear criteria specified, you must use the general principles of law, in this case the balance of interest between the public interest and the interest of the person struck by the order.”

She stressed that freezing orders were not a punishment, but were meant to preserve the proceeds of crime and return them to the State. “So, the court has to establish the proceeds.”

But the judge observed that the courts must be careful not to discriminate “between the people charged with offences yesterday and others charged with the same offences today.”

Mercieca said that in other cases where the amount could not be established conclusively, the new law had been applied by the court of magistrates.

The Court adjourned the sitting for a decree on the matter.