Repubblika submits formal complaint to European Commission over Maltese money laundering

The newly-established NGO Repubblika has submitted a formal complaint to the European Commission arguing that the Malta is failing to enforce anti-money laundering laws in cases involving “persons of power”.

In a statement, the NGO said its complaint was based on a breach of three pieces of European legislation: Article 58(2) and (4) of the fourth anti-money laundering directive (AML4); Article 2, Article 4(3) and Article 19(1) of the Treaty of the European Union in conjunction with Article 47 of the EU Fundamental Rights Charter; and the principle of effectiveness.

The NGO said it had provided the Commission with a timeline of events, starting in February 2016 when the late Daphne Caruana Galizia revealed that then Energy Minister Konrad Mizzi and OPM Chief of Staff Keith Schembri had opened secret Panama companies and New Zealand trusts.

“Caruana Galizia was brutally assassinated in October 2016 whilst still working on corruption investigations and amidst growing concerns over the conduct of the police investigations, the people who ordered the murder remain unknown,” the NGO said.

Repubblika stressed that rather than being sacked, Mizzi and Schembri were “staunchly defended” by Prime Minister Joseph Muscat, with both men still holding office three years on.

The NGO accused local law enforcement entities, including the Attorney General, the Police Commissioner, and the Financial Intelligence Analysis Unit of failing to take action.

Repubblika said that “in the absence of any action” former Opposition leader Simon Busuttil filed a request in court asking for a magisterial inquiry, a request that was “vehemently opposed in court by the subjects, including Mizzi, Schembri and Muscat.

This, the NGO said, was followed by the revelations by the Daphne Project, that the companies set up by Mizzi and Schembri were to receive €150,000 a month from 17 Black, which was later revealed to be owned by Yorgen Fenech, one of the owners of the new power station at the centre of the Labour Party’s electoral campaign in 2013. 

“In January 2019, after a long-drawn legal battle in court, and despite all the revelations now in the public domain, Simon Busuttil’s request for a magisterial inquiry was rejected by the Court of Appeal,” Repubblika said.

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“A separate request to open an inquiry was also rejected a few days later. This means that even the courts in Malta are proving unwilling to open an investigation into the Panama Papers as required by law and despite Malta’s obligations under successive EU money laundering directives.

To date, the NGO said that Malta has instituted no investigation or other action to ensure the “proper and effective implementation of the EU anti-money laundering directive” or its obligations under the Treaty of the European Union.

Ultimately, Repubblika said that the Panama Papers revelations were “not only shocking because politicians and people in power were caught red-handed” but because when they were caught, “the institutions that have the duty to do something about it refused to do so”.

“This ranges from the executive branch that controls and poorly equips law enforcement agencies to the judiciary that faced by citizen claims to open inquiries did not do so,” it said.  “The responsibility for the judiciary’s failure may very well lie with the legislative branch that has failed to provide the judiciary with adequate laws to implement European money laundering law.”

Repubblika said it intended to take further action to try to “kick-start proper action”, but was in the meantime “pointing out that the Maltese state – its entire three branches of government – are failing to apply European law when faced by allegations of money laundering”

“When a Member State fails to implement European law, particularly provisions of the Treaty of European Union, the European Commission has the right to initiate action against that Member State. That can lead to sanctions,” Repubblika said. “We are filing our complaint according to the formal complaints procedure of the European Commission to get them to start a legal process to investigate this persistent breach of European law.”

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