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Sensationalist and alarmist features in the press are fortunately rare. “The silent earthquake” (MaltaToday 15 April 2007) unfortunately, is one of them. Your contributor Raphael Vassallo got it wrong from the start. He refers to a conviction for money laundering of a certain Maria Abela supposedly of Thursday 12 April. There was no such conviction. The judgement against Ms. Maria Abela was delivered by the Criminal Court on 29 March 2007. The author says that Mr Justice Galea Debono “argued, among other things, that Malta’s money laundering legislation was “ambiguous” in its wording” Mr Justice Galea Debono never argued any such thing. He never, anywhere in his judgement, alleged that the legislation was “ambiguous”. He did point out that the law, in laying down the punishment for the offence, allowed the court a wide margin of appreciation. That is far different from saying that the legislation “was ambiguous in its wording”. But then if your contributor did not even bother to verify the actual date of a judgment why bother to read it. Not indicative of a well researched feature especially since the judgement in question was its whole point.
And why should Mr. Justice Galea Debono’s guidelines raise any “legal eagle’s eyebrow” (does an eagle have an eyebrow?). The guidelines should have been apparent to any legal eagle (with or without an eyebrow) since graduation because they are typical of the kind of circumstances which our courts have been taking into consideration since time immemorial. They cannot have been eagles those lawyers who raised their eyebrow apparently in the author’s presence.
The feature goes on to quote a number of defence lawyers, one identified, most not. The author, however, does not seem to have bothered to seek the views of the prosecution, whether of the police or of my office. Reference is made to the Financial Intelligence Analysis Unit which, according to the article, supposedly took an interest in some case or other. The contributor did not bother to approach the Unit to verify or otherwise the allegation or to at least obtain its views. The Financial Intelligence Analysis Unit (FIAU) is described as “the body established by the Money Laundering Act specifically to investigate such crimes”. The FIAU was not established for any such purpose, whether specifically or otherwise. The FIAU does not investigate crimes. It receives disclosures of suspected money laundering or financing of terrorism transactions from persons and entities subject to the anti-money laundering legal regime, collates information, evaluates it and confirms or otherwise the suspicion. If it confirms the suspicion the report with its analysis is forwarded to the Police for investigation. It is the Police who investigate crimes. The FIAU acts as a filter and clearing-house between the subject persons and the Police. If the contributor had approached the FIAU all this would have been explained to him. He did not bother to do so. Such an attitude does not do much for one’s credibility. No wonder it took the author almost three weeks to perceive the tremors of an inexistent earthquake. But then the author does seem to know all about “hysteria and paranoia” with which he accuses many countries around the world.
All this on the basis of one conviction. Reading the feature one could not be blamed for thinking that some innocent spouse had been the victim of some miscarriage of justice for having been found guilty for an offence which she did not commit. Nothing could be further from the truth. The person in question actually confessed to the crime. She actually pleaded guilty in court. The author did point this out in the second paragraph of his feature: he apparently then immediately went on to forget all about it.
Now for some facts as distinct from perceptions and misconceptions.
Money laundering is an indispensable aspect of all crime which generates proceeds and not of just organised crime or terrorist finance. Organised crime and terrorist groups may have elevated the phenomenon of money laundering to a fine art but that does not mean it is their monopoly. No expert, study, research or international convention has ever restricted money laundering to organised crime. Money laundering is very often transnational in nature because of the means by which it is often committed making use, as it often does, of the international financial system but transnational crime and organised crime are not synonymous. Any criminal who commits a crime which generates proceeds needs to launder those proceeds to give them the appearance of legitimacy in order to be able to spend them. There is not much point in generating proceeds which then you cannot spend. Make it impossible to spend the ill-gotten gains and remove the incentive to commit crime. That is the underlying rationale behind the international proscription of money laundering and the global legal and administrative framework set up to fight it.
The 1994 legislation was not modelled “on its British counterpart”. It was modelled on the first international convention which obliged state parties to criminalise money laundering and laid down a legal definition for it: the UN 1988 Vienna Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances. The wording so much denigrated in the feature in question is wording which is practically reproduced word form word from the Convention. Malta, as part to the Convention, is obliged to comply with the requirements of that convention. All the elements of the offence of money laundering in Maltese legislation reproduce the same elements as laid down in international conventions and standards: whether it is the description of the conduct itself, whether it is the definition of property and whether it is the definition of criminal activity. The Maltese anti-money laundering legislation is also fully in harmony with the recommendations of the Financial Action Task Force and with the anti-money laundering directives of the European Union.
Dr Joseph Giglio confuses wide and comprehensive definitions with vague ones. The reason that the definitions are wide and comprehensive is precisely to ensure that the entire wood is targeted so that all the trees are included. Dr Joseph Giglio, a defence lawyer, may well question the wisdom and the efficacy of the broad definitions within the Prevention of Money Laundering Act. The Maltese legislator has chosen to rely on the wisdom of the international community which is committed to repressing crime and safeguarding public order and safety.
It is true that historically the international community engaged with money laundering in the context of drugs offences but since then Europe and the world has moved on. In fact as way back as 1990 the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime moved away form a drugs linked money laundering offence and in principle adopted an all crime money laundering offence. Today the world wide trend is definitely in this direction and MONEYVAL, the Council of Europe Committee of Experts on the Evaluation of Anti-Money Laundering Measures (formerly PC-R-EV), and in which Malta is actively involved, has consistently and persistently advised states to adopt an all crime money laundering offence.
As for article 2 (2) of the Prevention of Money Laundering Act, which appears to give the author much cause for alarmed concern, it happens to be a provision which was specifically and positively remarked upon in a 2002 horizontal analytical report produced by Mr John Ringguth, acting as a consultant on behalf of the Council of Europe. Mr Ringutth has for several years been part of the Secretariat of MONEYVAL. In the report other states were solicited to emulate Malta by reproducing the provision in question in their legislation. This is what the report had to say about it:
“… Malta had specified clearly in its legislation that a conviction for money laundering is possible in the absence of a judicial finding of guilt in respect of the underlying criminal activity. They had provided explicitly that the underlying criminal activity could be established on the basis of circumstantial or other evidence without having to prove a conviction. This applied both to domestic and foreign predicate offences. Other countries also subscribed to this view though it was not expressed in legislation.”
The report then continues, with respect to the provision in question:
“A provision along the lines of the Maltese formulation could usefully be introduced into legislation in all those PC-R-EV countries where this issue is still subject to debate. Indeed it may be helpful to consider articulating this principle in any Protocol that may be developed to the Stasbourg Convention or indeed in any Recommendations the Select Committee is minded to advise or adopt.”
Moreover, the 2005 Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds From Crime and on the Financing of Terrorism, the most recent and comprehensive anti-money laundering convention, provided in its article 9.5 that:
“Each Party shall ensure that a prior or simultaneous conviction for the predicate offence is not a prerequisite for a conviction for money laundering”
Maltese legislation had got it right eleven years earlier.
The author then proceeds to illustrate a couple of scenarios which again are replete with imprecision and downright errors of law. I hope that whoever came up with the scenarios in question will never appear as defence counsel in a money laundering trail… for the sake of his client. That would be the real nightmare. It would take me much more space than you can afford to allow me in your paper to dissect the scenarios in question and to dispel the misconceptions and incongruencies manifested in their construction. If these scenarios were correct it is an absolute wonder that we have not yet had thousands upon thousands of prosecutions and convictions for money laundering. The fact that since 1994, when the anti-money laundering legislation in Malta was first enacted, there have only been a relatively few prosecutions and even less convictions is enough to show how groundless these scenarios are. There should be more prosecutions and more convictions. But there is certainly no cause for the nightmares from which the author or his sources seem to be suffering.
And then about reporting. It is true that in Malta and in some other jurisdictions, as a general rule, there is no obligation to report criminal offences. In many others such a general obligation does exist. The fact is that the international community very early on recognised that an essential elementary obligation on which an anti-money laundering regime could be constructed was an obligation on the part of those persons subject to the regime to report suspicious transactions to a disclosure receiving agency which eventually developed into what today is known as the Financial Intelligence Unit. This is today among the very least of measures which is globally acknowledged as indispensable to any anti-money laundering regime and today is almost universally applied: and the author describes this as an “anomalous aspect of Malta’s Money Laundering Act”! It only goes to show how little --- practically nothing --- he knows about current anti-money laundering international standards.
Yes, some rules which apply to the offence of money laundering are different from rules which apply to other offences. But then money laundering is offence which is universally acknowledged to be different from other offences and which therefore requires different rules to ensure its repression and prevention.
The author ends by reaffirming that hitherto anti-money laundering procedures have been associated only with mafia bosses and internationally wanted terrorists. The reality is that the association with terrorists is relatively a very recent development and anti-money laundering procedures have never, ever, anywhere been exclusively associated with mafia bosses. The author then concludes by apparently shuddering at the implications. I too shuddered on reading his article: at its damaging implications, its misconceptions and its errors on practically every point in issue and at every turn.
Raphael Vassallo writes:
Dr Camilleri is right to point out the mistake in the date of the ruling, and the wrongly attributed quote of the word “ambiguous”. Other than that those two errors, I stand by my article IN FULL. |
