Dirty money law to give State power to seize luxury assets without criminal conviction

Confiscating cars and property acquired by dirty money will be possible without requiring a criminal conviction under a tough new law targeting organised crime.

Legislation proposed by Justice Minister Edward Zammit Lewis will empower the Asset Recovery Bureau to file civil proceedings for the confiscation of assets acquired through criminal means.

Significantly, the law will place the burden of proof on the individual to show that the asset was acquired legitimately.

Given the civil nature of proceedings, the court will determine the outcome on the balance of probability, unlike criminal action where the court has to be convinced beyond reasonable doubt of the individual’s guilt.

Zammit Lewis presented the First Reading of the Proceeds of Crime Bill last week and the legal text was published on Friday evening.

In comments to MaltaToday, the minister said the proposed legislation will be a breakthrough in the fight against organised crime and money laundering.

The law will also make it possible for the bureau to institute court proceedings against an asset, when its owner cannot be traced or is abroad.

“This is a principle derived from maritime law where it is possible to institute a case against the ship. In this case, the ARB may have reasonable suspicion that a particular asset is a proceed of crime but its owner cannot be traced or is abroad, and so it will be empowered to act against the asset itself,” Zammit Lewis said.

But the most crucial aspect of the proposed legislation is the ability of the ARB to act without the need of a criminal conviction.

Legislation so far, allows the ARB to seize and preserve an asset when a criminal case is instituted. However, the confiscation can only be complete once all criminal proceedings are over.

Under the proposed law, the ARB will retain its current function but will also be able to institute civil proceedings to confiscate assets on the basis of reasonable suspicion.

Similar legislation is found in Italy, the UK and US. An EU directive from 2014 also allows for the seizure and confiscation of property without a criminal conviction.

Zammit Lewis said the ARB’s enhanced powers will be used to target organised crime, terrorism, money laundering, human trafficking, illegal arms dealing and crimes punishable by a prison sentence of 10 years and more. It will also be used in cases involving individuals hit by UN sanctions.

The Bill proposes giving the ARB the power to issue a monitoring order, an investigation order and finally a freezing order. A specialised civil court will be created to deal with asset recovery to ensure expediency.

“Until today, confiscation of assets ordered by the court can only take place after a criminal conviction. The proposed regime allows assets to be confiscated for serious crimes where it may be very difficult, if not outright impossible to proceed criminally,” Zammit Lewis said.

The move comes as Malta faces a crucial test in a couple of months’ time when Moneyval, a Council of Europe body, gives its verdict on the country’s ability to act against financial crime.

The minister said the ARB’s resources will be beefed up to ensure efficiency in confiscating and preserving property derived from crime.

“This is a clear commitment on the part of the government to seriously fight organised crime, money laundering and serious cross border crime… This is a breakthrough law introducing new concepts within our legal system, such as non-conviction based confiscation and civil actions against objects that are proceeds of crime. I am confident that this will help our jurisdiction pass the Moneyval test,” Zammit Lewis said.

The Bill is expected to be put on parliament’s agenda when it reconvenes in October.