Minister announces amendments to soften impact of court orders in financial crime proceedings

The duration of garnishee orders issued against individuals accused of financial crimes is to be slashed by half, and the persons targeted by them afforded the possibility of continuing their business or profession until their conviction or acquittal.

These are but two of several amendments to the legal framework regulating freezing orders which were announced by Justice Minister Jonathan Attard on Monday.

Attard said the amendments - which are to be published in the next Government Gazette - were part of a holistic exercise to improve effectiveness and justice. 

The new Act proposes a common procedure that ensures the proportionality of garnishee orders, freezing orders and confiscation orders in money laundering proceedings. 

Garnishee orders in related proceedings will now be valid for six months and subject to variations as well as the release of funds to ensure a decent standard of living. 

Prosecutors applying for freezing orders will now have to specify what property or how much money is to be frozen within 90 days of arraignment and the decision to uphold the requests for such an order will now be subject to appeal before the Criminal Court. As the law currently stands, persons subject to freezing orders are allowed to withdraw less than €13,000 annually.

Moreover, the amounts frozen may be varied upon a request by one of the parties and the defendant will be allowed to withdraw a maximum of the average annual salary, as determined by the Minister, in order to live a decent lifestyle.

Additionally, defendants struck by such orders will be able to ask the court to allow them to continue operating their business, trade or profession. Requests for withdrawals for recurring expenses, such as loans, insurance payments and school fees, which currently require applications to be filed and upheld for every such withdrawal, will now be made only once.

Addressing a press conference at the Justice Ministry in Valletta, together with Commissioner for Laws, Mr. Justice (retd) Antonio Mizzi, Attard pointed out that “in the past two or three years, Malta had started fighting financial crime very aggressively,” and that the amendments were also necessary for the courts to be effective when executing judgments handed down abroad.

The amendments to the law introduce a right of appeal both to conviction and to court-ordered confiscations of property or assets. The Criminal Court, after finding guilt, will now have to establish the value of - and identify -the cash, property and other assets which were derived from criminal activity.

Asked by the MaltaToday as to why the Minister appeared to be increasing the rights of persons accused of financial crimes, at a time when Malta is already struggling to successfully prosecute them, Attard said that the updates to the law had been drafted after a consultation process involving the Law Commissioner, prosecutors from the Attorney General’s Office, the State Advocate, the National Coordinating Committee on Combating Money Laundering and the Asset Recovery Bureau.

84 cases involving money laundering charges have been filed in just the past 3 years, according to statistics published by the Ministry for Justice.

Attard was keen to stress that the amendments did not affect freezing orders issued in proceedings related to drug trafficking.

Freezing orders currently require every withdrawal from the frozen accounts to be applied for and upheld by the court, which was causing excessive hardship, he said. “People have to apply to the court to buy medicines every month [at the moment].”
Using the example of a family business in which only one family member is struck by a freezing order, he said the law as it currently stood would drive the business to bankruptcy, unable to pay its creditors or deposit its earnings.

Judge Mizzi added that investigating a person suspected of a crime should not impinge on the wellbeing of others. “We are streamlining a situation that had become impossible.”

Both the Constitutional Court and the Criminal court have recently questioned the necessity of maintaining freezing orders over all of the property of the persons accused.