Greylisting is also an opportunity for compromise

Perhaps unwittingly, a recent Parliamentary debate touched upon an issue that is highly relevant, at the moment: not just in Malta, but everywhere else in the world. 

In an age when so many services, previously provided by the State, have been farmed out to private companies or PPPs… to what extent can this paradigm conceivably be taken? How long before certain intrinsic functions of the State itself – like policing, for instance; or (in Malta’s particular case) dishing out fines, or other punitive measures – also end up being ‘subcontracted’ to other entities? 

Here, the State’s divestment of responsibility may be considerably more problematic, than in the usual areas: education, health, public transport, etc.   

There are immediate, recognizable pitfalls, when it comes to relegating such departments as the judiciary, or the police, to the same level. So it is entirely understandable that the Opposition would vote against a Constitutional amendment that – while on a much smaller scale – does indeed raise comparable concerns here in Malta. 

And because the amendment itself concerned a proviso that required a two-thirds parliamentary backing: the Opposition’s defeat of the motion also marks a rare instance when Malta’s government has been stopped in its tracks, by means of a Parliamentary resolution.   

But, as always, the situation is complex. In a nutshell, the Constitutional change proposed by Justice Minister Edward Zammit Lewis sought to introduce a clause that allows independent administrative and regulatory authorities to impose administrative penalties or measures “which may have the characteristics of a charge or punishment of a criminal nature”. 

And to be fair, there are many valid reasons to consider such a proposal. One of the foremost complaints against such regulators as the Planning Authority, for instance, is that it always proves toothless when it comes down to enforcing laws with the rich and powerful. 

Specifically, however, the Bill also intended to close a legal loophole that has been used many times to evade paying the price for infringements. (Ironically, one such court cases was instituted by the Nationalist Party itself, against the Electoral Commission: which had open an investigation in line with the party-financing laws, over allegations that PN official wages were paid by a private company.) 

And to complicate matters further: this Constitutional loophole is also one of the factors highlighted by the FATF: if not as a direct cause of Malta’s greylisting, certainly as one of the problems that need fixing, if our position is to be regulated in future. 

Ahead of the parliamentary sitting, Financial Intelligence Analysis Unit director Kenneth Farrugia even warned the constitutional amendment would have given regulatory authorities the necessary bite in the discharge of their duties: after this function was successfully challenged in two constitutional court cases in the past. 

“If we don’t have this protection at law, the FATF greylist deadline of January 2023 will not be met before 2026; because one of the issues raised was the need to have compliance on the ground through effective, dissuasive and proportionate sanctions,” Farrugia said. 

Nonetheless, this does not mean that the Opposition’s stated concerns are no longer valid. Opposition MP Joseph Ellis argued that the changes undermined the principle of due process on fines that, in some instances, could reach millions of euros. Chris Said insisted that the changes would undermine the guarantees of a fair trial and due process enshrined in the Constitution.  

And Therese Comodini Cachia certainly had a point, when she reminded us that authorities with government-appointed members could not be trusted with dishing out fines of a criminal nature. 

Clearly, then, we cannot rush so blindly into a Constitutional change that can have such far-reaching effects, in so many directions. To be fair, Zammit Lewis did at least try to appease those concerns, by presenting an amendment to add “the obligation to ensure due process is followed in dishing out the fines, and injured parties would have the right to appeal before the law courts.”  

Nor does he even have much of a choice, but to try and introduce this kind of legislation (this time round, having to depend entirely on the Opposition’s support for success). 

In the end, perhaps it was fitting that this first attempt proved a failure: for Zammit Lewis’s bill – as presented – simply did not provide enough guarantees, for the protection of ordinary people’s rights. 

But there is no reason why a compromise, in this instance, cannot be reached. And if nothing else, this may be the only silver lining of Malta’s greylisting experience: it is also an opportunity to show how the two parties can, indeed, work together to confront a common challenge. 

Government must therefore go back to the drawing board, and come up with a solution that will both close the legal loophole, once and for all; and also appease legitimate concerns. The Opposition, on its part, would be wise not to press its unusual Parliamentary advantage too far. It must recognize that there is the national interest at stake here, and act accordingly. 

And with a 2026 deadline fast approaching: this has to happen, fast.