Malta needs a law on unexplained wealth orders

There have been many criminal cases where those accused of wrongdoing describe their status as ‘unemployed’ and yet a catalogue of their assets reveals high-end cars, mounds of cash, luxury watches and apparel.

There are the classic examples in the form of notorious criminals such as the Degiorgio brothers and the Maksar brothers. But there are also others, not quite as famous, who flaunt their wealth on social media and yet claim unemployment in court.

And then there are those, who for all intents and purposes appear to be ordinary people, who become wealthy overnight. They buy property, boats, cars, jewellery, and post photos of themselves in luxury hotels in exotic destinations. The sudden surge of wealth is unexplained; not consonant to what appears to be their ordinary income activity.

The one underlying factor in all these examples is the huge wealth and assets amassed with no obvious or logical explanation to justify the riches. The presumption in these instances is that the wealth is the result of criminal activity that may not be so obvious or difficult to prove, such as corruption.

In 2020, then Justice Minister Edward Zammit Lewis attempted to introduce an unexplained wealth order law to give the police additional tools to combat sophisticated crime by going after the money. However, the minister’s attempt did not make it past Cabinet, where the proposal faced resistance.

The minister did put forward a legislative proposal dealing with proceeds of crime to allow the confiscation of assets but it fell significantly short of what an UWO law would have achieved.

In January 2021, in a committee hearing in parliament, during which the Proceeds of Crime Bill was being dissected, Zammit Lewis insisted that Malta’s tax and social security laws already provided clauses on unexplained wealth. However, he also admitted the law was only as good as the institutions tasked to enforce it. “We’re seeing UWOs as a second step on this law,” he had said despite calls from then Opposition MPs Jason Azzopardi and Claudio Grech not to miss the opportunity to give crime-fighting agencies the necessary tools to combat criminals.

Grech had even described UWOs as essential if Malta was to achieve a “quantum leap” in the fight against corruption.

The government ignored the Opposition’s exhortations; UWOs proved to be too uncomfortable. But unfortunately, the promised ‘second step’ never arrived in the years that followed. Significantly, during an exchange in parliament last week, Prime Minister Robert Abela effectively ruled out the introduction of UWOs, insisting there is no need for them because existing laws already satisfy their functions.

The truth is that existing laws do not provide law enforcement agencies with the best tools possible to go after the ‘fruits’ of criminality, whether this is drug trafficking, illegal arms dealing, terrorism, or corruption.

An UWO is a court order that requires a person to explain how they acquired a valuable asset above a threshold set at law that does not match their known legal income. It does not require an active criminal charge to be made but the action could enable police to gather information. The inability of the person to explain how the asset was acquired could lead to confiscation. In a nutshell, UWOs are used to dismantle the accrued benefits of crime.

The introduction of UWOs was one of the recommendations made by the Daphne Caruana Galizia Public Inquiry but like the vast majority of recommendations, it was also ignored.

The Opposition is once again putting forward such a proposal as part of the Omnibus Bill it intends to table in parliament. As things stand today, the bill, which includes a raft of legislative proposals, is unlikely to find support within government in view of the prime minister’s hard-line stance.

What is unexplained is how government’s traction went from ‘considering UWOs’ to ‘not considering them’ to ‘considering them as a second step’ to ‘there is no need for them’, in the span of six years.

The Labour government’s almost religious resistance to UWOs, suggests one of two options: Abela’s opposition is either borne out of spite because the proposal is coming from the Opposition and was made in the Daphne inquiry; or has everything to do with preventing scrutiny of politically exposed persons.

In the aftermath of the Yorgen Fenech trial, during which we heard shocking details of how public officers behaved in the presence of a tycoon, the government’s resistance to UWOs suggests something more sinister than simple hard-headedness.

For, why should the authorities be denied the tools to do the best job possible when dealing with the big fish? Malta’s existing legal regime is no replacement for UWOs, no matter what the prime minister says.