Money laundering case: Debono defence questions enforceability of US sanctions

Sanctions board says it is folly for Maltese banks to ignore American sanctions by OFAC, even though they are not legally enforceable

Albert Buttigieg (left) and Florinda Sultana
Albert Buttigieg (left) and Florinda Sultana

The chairman of the Sanctions Monitoring Board told a court hearing evidence in the money laundering case against Florinda Sultana and Albert Buttigieg, that no official United Nations sanctions were actually issued against accused oil smuggler Darren Debono, his restaurant Scoglitti and his compay World Water Fisheries.

SMB chairman Neville Aquilina was grilled on the witness stand by defence lawyer Stefano Filletti earlier this morning, testifying at the request of the Attorney General before magistrate Donatella Frendo Dimech.

Sultana and Buttigieg  were arrested in 2020 in a large-scale plice anti-smuggling operation which led to the arraignments of ex-footballers Darren Debono and Jeffrey Chetcuti, together with auditor Chris Baldacchino and fuel trader Gordon Debono. They stand charged over their involvement in a number of companies operating the Porticello – formerly Scoglitti- restaurant at Valletta – and Capo Mulini at Marsaxlokk.

Darren Debono (left) and Jeffrey Chetcuti (right)
Darren Debono (left) and Jeffrey Chetcuti (right)

Both restaurants are alleged to be involved in laundering money, linked to oil smuggling receipts.

Filletti objected to the SMB chairman’s testimony from the outset, arguing that his opinion was immaterial to the case at hand. “A recommendation is not a state of fact,” argued Filletti – “it is subjective and an opinion. Therefore, it has no probative value and the defence declares that it is not even admissible.”

The court said it had no power to declare this question inadmissible.

“Our law obliges us to issue recommendations,” Aquilina told the court. “This we did in March 2014, calling upon all economic operators …we are full UN members and obliged to obey the Security Council.”

The witness made reference to resolutions condemning the looting of resources in Libya, and American OFAC sanctions which Malta recognises. “We issued them to all economic operators in our jurisdiction so nobody touches dirty money. They are published on the sanctions monitoring board website and we send updates regularly. Their decisions are mandatory, we must obey them whether we want to or not.”

Aquilina said the subjects were also referred to the police for investigations. “We are bound to send the panel of experts any and all information relating to Maltese people on the list.”

Sultana, Buttigieg, and his company Luzzu Catering, were not hit by the same sanctions as the Debonos and Darren Debono’s restaurants.

While Debono could not be sanctioned under UN measures since these sanctions were tied to members of the Libyan regime, Aquilina said the SMB’s report was not based on hearsay.

The magistrate asked whether, despite there being no legally binding sanctions against Debono or the accused, it was considered politically advisable as a policy to protect Malta’s economic interests. “We have an obligation to protect our jurisdiction,” Aquilina replied, to which the court observed that jurisdiction is also protected by trade and economic activity. The witness agreed, adding that “they must take place within legal parameters.”

Filletti pointed out that as a consequence of the guidance note, commercial entities had not asked for enhanced due diligence but terminated all relationships. “That’s what happens with US sanctions,” the witness replied. “It doesn’t depend on the Malta’s guidance note. Banks depend on the dollar. It would be folly for them not to follow OFAC sanctions.”

“So, they are going to stop trading, not because of wrongdoing but because of political pressure?” asked Filletti. “US executive orders are not enforceable in Malta!”

Asked by the court whether American executive orders attract legal sanctions in Malta, Aquilina replied that they do not.

RIU police officers testifying said they arrested Florinda Sultana at 1am while driving on Tal-Barrani road. The sergeant who carried out the arrest testified that he had pointed his sidearm at the car’s occupants.

“I did this for my safety,” he explained. “I stopped the car. Pulled out the gun. I said ‘police put your hands on the wheel’. When she did so, I holstered my weapon.”

The officer said he and his colleague were not wearing balaclavas during the arrest, as had been claimed by the defence.