Judge suggests Justice Minister should consider amending law on freezing orders

In a decision rejecting a request to limit the freezing order imposed on Florinda Sultana and Albert Buttigieg’s assets, Madame Justice Consuelo Scerri Herrera ordered a copy of her judgement be delivered to the minister

A Criminal Court judge has rejected as legally impossible a request to limit the scope of freezing orders issued as part of the money laundering proceedings against Florinda Sultana and Albert Buttigieg.

The judge also ordered a copy of her judgment be delivered to the Minister for Justice so that he may consider amending the law.
Sultana, the star of Labour’s infamous 2013  “Courage to Vote” video, and Buttigieg, a former high-ranking official at BNF Bank, are accused of fronting companies which managed two seafood restaurants, but which are also alleged to have laundered money linked to oil smuggling. Both Sultana and Buttigieg deny the charges.

Representing both defendants, lawyers Stefano Filletti and Nicole Galea had argued that it was “disproportionate and absurd” for freezing orders to affect all the assets of the defendant, even those acquired before the offence with which the defendant is charged and requested the court reduce the amount of money frozen under the order to that allegedly laundered.

In a decision handed down on Monday, Madame Justice Consuelo Scerri Herrera noted that in a final decree handed down in February this year, the Criminal Court had concluded that the freezing order was to remain in force over all of the defendants’ assets until final judgement is handed down.

But less than two weeks later, in its decision in a similar case filed by Edward Caruana, the First Hall of the Civil Court in its Constitutional jurisdiction ruled that the claimant had the right to request the revision of a freezing order issued against him, limiting it to €5,000, as long as he could prove the legitimate provenance of the remainder of his wealth and property.

Prior to the Edward Caruana case, the courts had consistently ruled that freezing orders could not be limited to a specific amount. 

In his submissions, Filletti had argued that the State was contradicting itself on this issue, with the State Advocate arguing that the court had a right to limit freezing orders and the Attorney General saying the opposite. Besides issues with fairness, the contrasting arguments also created legal uncertainty as to the interpretation of the same section of the law, said the lawyer.

The Attorney General had counter-argued, pointing out that the principles established in the Edward Caruana decision did not apply to this case, as Caruana was charged with accepting a bribe as a public official, while Sultana and the other complainants were charged with laundering an amount which is difficult to be quantified. 

The AG did not contest the fact that the courts could amend freezing orders, a power which arises from the law itself. “What is being contested is whether this Article should be interpreted as granting courts the power to limit freezing orders to a specific amount.” The general rule emerges from the Prevention of Money Laundering Act and is reflected in the Proceeds of Crime Act, none of which made a distinction between assets which were acquired legally and those of illicit provenance.

In this morning’s decision, the judge said she agreed for the most part with the Attorney General’s reply. Were the court to decide about the amount to be seized, it would also be expressing an opinion on the merits of the case, which it could not do at this stage of proceedings.

“The order seizes and places in the custody of third parties, all money and movable property owed to, related to or owned by the accused, in a general manner. The accused would be prohibited from transferring, pledging, hypothecating or in some other way, disposing, from movable or immovable property,” noted the court, emphasising the “general nature” of the freezing order which must cover all of the assets belonging to the accused falling within its remit.

The court noted that the Edward Caruana case, which had been cited by Sultana, dealt with the issue of whether the issuance of a freezing order over all the claimant’s property constituted a breach of fundamental rights. “In this forum, the court is not being asked to decide whether that law on freezing orders breaches fundamental rights, but whether certain property could be released [from the freezing order].”

The judge, noting the relevant EU directives on proceeds of crime, observed that an argument about the proportionality of the law could conceivably be invoked in such cases, but said that this was not the competence of the Criminal Court.

Maltese law did allow courts to authorise the use of frozen funds to pay bona fide creditors or the transfer of property, amongst other things, said the judge.

“But one a freezing order is issued over the property of a person charged with a relevant offence, this order remains in force until the proceedings are finally and conclusively decided, and should the person be found guilty, also remain in force until the sentence is carried out."

The judge conceded that jurisprudence on the subject was still evolving, but insisted that the court’s hands were tied as long as the law remained as it is.

The request to vary the freezing order was therefore rejected.

The judge, however, ordered that a copy of her decision be served upon the Minister for Justice in order for him “to see whether there ought to be an amendment to the law regarding the issuing of Freezing Orders,” in such a way as to limit their coverage to the property which defendants could have acquired in the period connected to the offences with which they are charged.

Lawyer Antoine Agius Bonnici is representing the Attorney General in the proceedings against Sultana.