Id-Dritt XXV - Volume 1 by GħSL - Publications

Id-Dritt Volume XXV

2015 Published by Għaqda Studenti tal-Liġi

Produced and published by Għaqda Studenti tal-Liġi (GħSL); the University of Malta Law Students’ Society. Correspondence in relation to this publication should be forwarded to: The Editor Room 219, GħSL Office, Faculty of Laws, University of Malta, Msida, Malta E-mail: editor@ghsl.org © Għaqda Studenti tal-Liġi 2015 All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of the copyright holder and the publisher, application for which shall be made to the publisher. Proofreading and editing done by the Editorial Board. Some articles have been modified for reasons of clarity and/ or uniformity.

Opinions expressed in Id-Dritt Volume XXV do not necessarily represent the views of the Editorial Board or of Għaqda Studenti tal-Liġi.

Printed in Malta by Progress Press Co. Ltd, Żona Industrijali, Triq l-Intornjatur, Mrieħel, BKR 3000, Malta

Cover Design by Neil Darmanin

978-99957-857-1-0

In Loving Memory of Matthew Meilak

Id-Dritt Volume XXV Editorial Board 2014/ 2015

Editor-in-Chief Luana Bezzina

Editors Ariane Aquilina Vanessa Gatt Michelle Grech Julian Vella

Publications Officer Gaynor Saliba

Għaqda Studenti tal-Liġi Executive Board 2014/ 2015

Francesco Refalo

President

Dirk Urpani

Secretary General

Patrick Gatt

Financial Officer

Rebecca Mercieca

Public Relations Officer

Joshua Chircop

Academic Officer

Gaynor Saliba

Publications Officer

Jacob Portelli

Events Officer

Rebecca Cassar

External Relations Officer

Pier Luca Bencini

International Officer

Luisa Cassar Pullicino

Thesis Librarian

Charles Mercieca

Gozo Relations Officer

Kelton Mizzi

IT Officer

GĦSL PUBLICATIONS OFFICER ADDRESS

by Gaynor Saliba LL.B., Dip. Not. Pub (melit)

It is with immense pleasure and great honour that I present the twenty-fifth volume of Id-Dritt, an acclaimed law journal that has graced our bookshelves since 1947. At the time, a group of avant-garde law students from the Royal University of Malta formed the Law Student’s Society and published the first journal of its kind on the island, entitled The Law Journal. Since then the journal has naturally undergone various changes (including that of its name in 1971), at times risking of becoming obsolete, yet in the last six years the journal has kept its annual appointment. As Publications Officer, upon the realisation that the 25 th Volume was due, I wanted this edition to be special. My ideas were welcomed by the Executive Board and created a small committee to discuss what the anniversary edition should include. Ultimately we decided that as celebration to the 25th edition, not only should we publish the Commemorative Edition but also the annual edition containing new articles on contemporary subjects. This edition thus, features a total of twenty-three articles ranging from Intellectual Property to Criminal Law, from iGaming to Notarial Legislation, and from Constitutional to Private International Law. Moreover, following the recent tragic accident, GħSL deemed it apt to dedicate this edition to Matthew Meilak, a brave fellow colleague that has left this world to a better life at the beginning of the year – may his soul rest in eternal peace! I equate my three-year journey within Għaqda Studenti talLiġi, to the infamous phrase ‘united we stand, divided we fall’. Inexperienced as I was upon my appointment, I soon came to realise that the publication of a law journal entailed the combined effort of a group of committed law students and legal professionals. The particularity of Id-Dritt presupposes that a number of articles be written by different legal professionals on different topics, thus creating a hybridity between traditional and modern subjects into

one journal. In this regard, I would like to pay tribute to all authors who throughout the years have contributed to this prestigious publication, thus aiding the organisation in keeping its frequent appointment with its avid readers. On behalf of GħSL, I profoundly thank Professor Kevin Aquilina, Dean of the Faculty of Laws, for the numerous times I have knocked on his door to seek advice. Not only was he instrumental in helping us ensure that the journal’s entries were original by subjecting them to the plagiarism detection software, but assisted the Editorial Board in drafting a set of stringent guidelines which a peer-reviewed journal merits. In this sense, I would also like to express my gratitude towards the network of peer reviewers who ensured that the contributions in this journal are legally correct, thus ensuring the prestigious reputation of the journal. I would also like to thank the committed group of individuals forming GħSL’s Executive Board for their constant support throughout the publication process. I am particularly indebted to Francesco Refalo and Dirk Urpani, respectively President and Secretary General of the University of Malta Law Students’ Society, for their constant encouragement and assistance in the past two years. I extend my sincere gratitude to a devoted team of editors, composed of Ariane Aquilina, Michelle Grech, Vanessa Gatt and Julian Vella, who ensured consistency throughout the journal. Lastly, I would like to wholeheartedly express my profound gratitude to the dedicated individual who acted as my companion and mentor throughout this exciting journey; Ms Luana Bezzina, Editor-in-Chief to this publication. Not only has she lead the whole team with great professionalism, but has worked tirelessly by my side to fulfil a distant dream which we both had – to see the twentyfifth edition come to print. Id-Dritt Volume XXV marks the end of my term within Għaqda Studenti tal-Liġi. I sincerely hope that in the past three years, I have in my little repaid the organisation that has transformed a shy and somewhat lethargic student to a more complete individual (and hopefully professional!). While naturally encouraging law students to take an active role within the organisation, I augur that future GħSL Executive Boards preserve the prominence and prestige that the organisation, and above all Id-Dritt has managed to re-gain x

in the past years. I humbly feel honoured to have formed part of the organisation that has been active within university for almost seven decades. Ad multos annos GħSL!

EDITORIAL NOTE

by Luana Bezzina LL.B., Dip. Not. Pub (melit)

As Editor-in-Chief of this publication, it is with great pleasure that I present the 25th Volume of Id-Dritt. This edition features a total of 23 articles addressing topics such as Domestic Violence, the Attribution of Responsibility in aircraft tragedies, the Right to be Forgotten, and Medical Consent. In keeping with the system set out in the 24th edition, this year’s publication endeavours to present its readers with a scrupulous equilibrium of contributions dwelling on the more traditional concepts embedded in our corpus juris and other contributions underscoring concepts or aspects pertaining to more contemporary specialisations, including IT Law, Gaming Law and Tax Law. Continuing on the foundations laid out last year, the editorial board overseeing the publication of the 25 th Volume was conferred with a similar mandate, to that conferred to last year’s editorial board. Following an unprecedented response from readers, the GħSL executive once again entrusted the editorial board to identify the thematics it desired to feature in this important edition. The foremost aim of all editorial boards, since the genesis of this publication, was to publish articles of direct relevance to the law student and the legal professional alike. Thus, once again the editorial board engaged in an exercise to identify subjects or topics which it thought merited inclusion in this year’s volume. Notwithstanding the emphasis on the importance of student activism, many are those who regard student-edited journals with scorn. The editorial board is mindful that review mechanisms are indispensable for any prestigious journal and more so when such journals are student-edited journals. Thus, the editorial board has once again sought to strengthen review thresholds. After exhaustive consultation with Professor Aquilina, Dean of the Faculty of Laws, and Professor Simone Borg, Deputy Dean of the Faculty of Laws, the Editorial Board has devised a set of guidelines for its peer reviewers, aimed at ensuring uniformity and consistency in the xiii

review of all contributions. All submissions were subjected to the Faculty’s plagiarism detection software and subsequently peer reviewed. I take the opportunity to express my gratitude to Id-Dritt’s network of peer reviewers for their time and assistance during the review process. Their expertise has undoubtedly ensured the retention of the prestige which this publication has always sought to achieve. The Editorial Board thanks Professor Kevin Aquilina, who for the second consecutive year aided us in coordinating this process. I augur that future Editorial Boards persist in further strengthening this mechanism of review with the assistance of the Faculty of Laws, and ensuring that the standing which Id-Dritt has secured throughout the years continues to flourish. Despite the introduction of more stringent review thresholds, the editorial board strove to include a good number of contributions which cover substantial aspects of an ever broader legal spectrum. The editorial board is honoured to announce that despite Id-Dritt’s rigorous review mechanism, this volume has surpassed all previous editions with regards to the number of submissions. The 25 th Volume includes contributions by young undergraduates, junior lawyers, practitioners, academics, and members of the judiciary. A number of contributions also feature a collaborative enterprise between professionals in the legal sector and law students. Such collaborations are undoubtedly encouraging for the student body. Moreover, such collaborative efforts permit the student to further ameliorate research and writing skills while under the supervision of professionals. On behalf of all law students, I thank legal professionals who invest their time in training us students. The editorial board augurs that such collaborations will be encouraged by successive GħSL executives. A look at the list of contents of this volume reveals a number of articles penned from an inter-disciplinary perspective, including inter alia, law and gender, the law and medical practice, law and finance. Such contributions underscore the fusion of law with other disciplines. Nowadays it is inevitable that law suffuses all these different branches. Moreover, such contributions further accentuate the inherent dynamic nature of law, and further underscores the distancing from the traditional notion of law as a self-contained discipline.

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The Editorial Board expresses its gratitude to Her Excellency President of Malta Marie Louise Coleiro Preca, who has been so kind as to accept our invitation to pen the Foreword to this edition, and Mr Justice Lawrence Mintoff, whose contribution, in the Maltese language, graces the back-cover of this volume. I would also like to thank the committed team of editors whom I was very lucky to have worked with: Ariane Aquilina, Michelle Grech, Vanessa Gatt and Julian Vella. My profound thanks go to our very diligent and enthusiastic Publications Officer, Gaynor Saliba, who for the second consecutive year has led, this year’s team with great professionalism, dedication and expertise, qualities which undoubtedly secured the successful formulation and publication of the 25th edition. I would also like to express my gratitude to GħSL’s Executive for their assistance throughout the publication process, in particular, Francesco Refalo, President of the University of Malta Law Students’ Society, for once again entrusting me with the role of Editor-in-Chief of this publication, a privilege given to few. I am truly honoured for having been given the opportunity to serve on the board of this acclaimed local publication for the second consecutive year. The 25th Volume marks an important milestone in the publication of Id-Dritt. This publication was regrettably placed on the back burner for a number of years due to GħSL’s financial constraints. However, for the past seven years, GħSL executives and their respective editorial boards, have successfully maintained this annual appointment, publishing editions of outstanding quality. I would like to take this opportunity to congratulate previous editorial boards and GħSL executives for their sterling work. It is through the diligence of students that Id-Dritt secured the prestige it retains today. Having served on Id-Dritt’s editorial board for the past two years, I have come to realise that the journal in itself represents the contentions of its contributors, arguments which reflect the spirit of the law and that of the legal sector in a given era. Each edition is representative of the Maltese corpus juris at that particular point in time. Having read through the pages of early editions has made me comprehend that in every single page lies a legacy, a legacy that ought to be cherished for many more years to come. xv

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FOREWORD

by Her Excellency Marie-Louise Coleiro Preca

It is, in my view, more than a happy co-incident, that the publication of this issue of Id-Dritt coincides with the launch of what is probably the most wide-reaching legal reform of the judicial and legal systems proposed so far in Malta. If we accept that the basis of good governance is good law, and that a nation cannot thrive without either, then we understand why the study of law as a major discipline becomes, more than paramount, indispensible. The proposed bundle of legal reform aims high. Historically there has been widespread dissatisfaction with the way the law translates into the dispensation of justice. The target of criticism was rarely the substantive law itself, but rather the efficiency factor in the administration of the justice system. Some of the proposals could sound daring and challenging, but they may be a last resort. Almost everything before them failed, notwithstanding the best intentions. They are a glimmer of hope, and hopefully much else. It can only be extremely gratifying that Id-Dritt goes from strength to strength. Over the past years it has improved in quality, grown in quantity, enhanced its appeal. It witnesses the commitment of those who study law, as students, as practitioners and as teachers, to expand their horizons and deepen the wellsprings of their learning. The fact that it has reached its twenty-fifth issue demonstrates more than anything else that the far-off pioneers who conceived the idea of its publication so many years ago had a vision and a project that outlasted them, because of the inherent vitality of their dream and the compelling exigency of their programme. The contents of this issue confirm a trend that has, over the years, become inevitable: that in the realm of law studies, specialization rules. Long gone are the days of the family lawyer as the legal GP, who was expected to be good at everything, though not to be excellent at anything. As leafing through the index of this

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publication shows, the authors who crowd its pages are young undergraduates, qualified practitioners, university lecturers and professors, a member of the judiciary. What unites them is their passion for law; what divides them is their specialization. They are experts in the most diverse gamut of legal offshoots, from aviation law to medieval capitula, from family law to financial services, from taxation to gender law. A combined issue of the last numbers of Id-Dritt would, in itself, constitute a valuable Maltese legal encyclopaedia. This specialised research into the more frequented or the esoteric provinces of law has to be seen as an essential part of the legal training of students. It is not enough that they absorb and learn. It is essential that they then learn how to give and share. The culture of law is not inward looking. It is a major form of expression and of communication. It is the ability to formulate a message and to pass it on. The graduates and undergraduates who, over the years, made so many contributions to Id-Dritt, have understood this. May there be many more. I am sure it is flattering to say that Id-Dritt is the only academic legal journal published in Malta; some may also take that to be a rebuke. Heartening as it is that the students of law felt it imperative to activate a forum for law studies and judicial dissemination, it that enough? Did it have to be the students, or the students alone? What about the legal professionals, what about the legal academics? I believe Malta to be one of the few countries from those that cherish the rule of law, not to have a long-established and prestigious law journal for which the legal profession and the academics of judicial studies are responsible. Kudos to the lawstudents who have stepped in to fill that void with a magazine that, year after year, attains the highest standards of legal scholarship. Without their initiative, their commitment, their enthusiasm and their mania for perfection, the scientific, academic study of law in Malta would have been an arid desert. The wide spectrum of legal disciplines covered by this issue of Id-Dritt demonstrates that those responsible for its publication have truly realized that law is a universal imperative, not a sectional interest. Law permeates every corner of our lives, it regulates every activity, it is the bright red line that distinguishes what is good from what is bad. The ‘rule of law’ fails when it turns into a hollow xviii

slogan – it should dominate as the fundamental principle of civilization that we have evolved today. We hold nothing that is not according to law to be right, and anything which is against the law to be wrong. The rule of law is not, nonetheless, an alternative to ethics. There is still a parallel moral code that elevates and refines the rule of law: not all that is legal is necessarily right, nor is all that is wrong necessarily illegal. These are the pastures of philosophy of law, a discipline which should underlie all the others, but which sometimes tends to be overlooked in the tensions and hurly-burly of the judicial marketplace. There has not been one single article on philosophy of law in the last issues of the magazine. But maybe the greatest attribute of law is that of a living organism. Only its principles are permanent; the way it applies, evolutionary. Continuously, harmoniously, unstoppably, in parallel with social progress, with technological breakthroughs, with the uplifting of the civic conscience, it moves, mostly forwards, sometimes sideways or backwards. To pilot it ever forwards are Parliament, the media, NGOs, constituted bodies, the courts, especially the constitutional court. They are all the custodians of the progress of law as a tool for the betterment of the polis. We all know how some ‘activist’ supreme courts around the world have changed the face of their nations, sometimes superimposing their ‘activisms’ on the timid inertia of legislators. The making of law remains unmistakeably the province of parliament, but the enforcement and interpretation of law are the province of the courts, particularly of constitutional courts. On them is placed the delicate and onerous responsibility of applying laws only and exclusively in the spirit of the basic constitutional values, in such a way that the letter of the law should never be read to be antagonistic to the spirit of constitutional principles. The ultimate guardian of these sacrosanct constitutional doctrines are the courts, and they should never let formal legalisms stand in the way of those overarching values that the civilized world has come to consider as indispensible for the assertion of the human condition above all else. Courts that betray the spirit of the Constitution in their deliberations hardly serve the principal function they are programmed to serve. The members of the Għaqda Studenti tal-Liġi are doing a superb job. May their successors emulate them and strain to surpass them. xix

CONTENTS Administrative Law Key Elements to Ensure a Legally Valid Process Internal Disciplinary Procedures Kevin Aquilina

Aviation Law MH17 Tragedy: Where does Responsibility Start and Where does it End? Lara Buttigieg

Disruptive Passengers on Board Aircraft Rebekah Tanti-Dougall

Child Law Reporting of Child Abuse – Should it be Mandatory for Professionals? Daniela Azzopardi Bonanno

Constitutional Law Maltese Constitutional Development at the Turn of the 20th Century: A Historico-Legal Perspective Claire Bonello

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Quo Vadis Parliament Autonomy? Revisiting of the Maltese Parliamentary Standing Orders Anġlu Farrugia and Clive Gerada

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Questioning Parliamentary Supremacy over the Courts Yet Again Ivan Mifsud

139

Judicial Importation of Italian Private Law Solutions and its Implications Mark A Sammut

157

Criminal Law The Necessary Requisites of Judgements According to Article 382 of the Criminal Code Amadeus Cachia

171

Data Protection Law The Right to be Forgotten: Bringing the Data Protection Directive into the Internet Search Engine Era Ann Marie Spiteri

195

European Union Law EU Citizenship: A Rightful Component Emanating from the Transition towards a Union or a too FarFetched Widening of the EU Fundamental Rights? Justine Calleja

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221

Financial Services Legislation The Alternative Investment Fund Managers Directive in Malta: Past, Present... What next? Christopher P Buttigieg

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The Proposed Fourth Anti-Money Directive: What has Changed? Stephanie J Coppini

Laundering

285

Gender and Domestic Violence Consuelo Scerri Herrera and Justine Scerri Herrera

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Gender and the Law

Historico-Legal The Capitula of Malta and Gozo – Late Mediaeval Legislative Enactments with Multicoloured Facets Raymond Mangion

329

iGaming Law A Legal Snapshot of the European Online Gaming Industry going into 2015 Michele Magro

339

Intellectual Property Law A New Era for Trade Marks? Jeanine Rizzo

363

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International Law Today’s Terrorist is Tomorrow’s Statesman – Does the Law of Self-Determination provide any Justification for Terrorist Acts? Roberta Avellino

379

Legislative Review The Mental Health Act of 2012 John M Cachia

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The Value in Legislating for Family Businesses Nadine Sant

429

Medico-Legal Informed Consent in Medical Practice in Maltese Legislation Bridget Ellul

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Notarial Legislation Notaries – Too Many Hats? Roland Wadge

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Private International Law The Six-Week Deadline under The Hague 1980 Convention Sandra Hili Vassallo

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Tax Law Constitutional Safeguards in Tax Litigation: How the John Geranzi Case Upset the Status Quo Conrad Cassar Torregiani and Christopher Bergedahl

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ADMINISTRATIVE LAW Key Elements to Ensure a Legally Valid Process in Internal Disciplinary Procedures Kevin Aquilina

Kevin Aquilina

KEY ELEMENTS TO ENSURE A LEGALLY VALID PROCESS IN INTERNAL DISCIPLINARY PROCEDURES KEVIN AQUILINA

_______________________________________________________ Associate Professor Kevin Aquilina M.A., LL.M. (I.M.L.I.), LL.D. (Melit.), Ph.D. (Lond.)(LSE), is the Dean of the Faculty of Laws, University of Malta.

____________________________________________________________

Introduction

This paper, discusses the key elements required to ensure a legally valid process in internal disciplinary procedures, from the viewpoint of Public Law (or from a Public Law perspective), with special focus on the public service. The main actors in the context of this contribution are the Head of a government department, and the officer answering a disciplinary charge. The Public Service Commission also has a role to play, in so far as it acts as an appellate body from decisions of the Disciplinary Board, while retaining a supervisory function over the disciplinary procedure. 1 Thus, this contribution does not address or discuss internal disciplinary procedures related to the private sector, as the law is different in this respect, and limitations of space do not allow for such a comparative exercise. Before discussing the four main rights with which a disciplinary board must comply with, reference must first be made to the principles of good administrative behaviour as enshrined in article 3 of the Administrative Justice Act. 2 These principles form part of the general principles of administrative procedure, and are of such fundamental importance in administrative procedure, that such principles should guide the conduct of disciplinary proceedings held 1

Disciplinary Procedure in the Public Service Commission Regulations, Subsidiary Legislation Const. 03, regulation 30 and 3(1) respectively 2 Chapter 490 of the Laws of Malta 3

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in terms of the Constitution of Malta and the subsidiary legislation made thereunder. Other issues concerning the disciplinary procedure shall also be discussed, including the hearing of disciplinary proceedings in the absence of the officer charged, the holding of hearings in private, and other procedural rights afforded to an officer answering a disciplinary charge. The paper shall also address appeals from disciplinary decisions and both summary suspension and suspension during the disciplinary proceedings. The paper concludes by noting that in so far as the public service is concerned, overall, disciplinary regulations ensure that all proceedings are conducted in full fairness to all parties concerned.

Disciplinary Proceedings under the Government

Disciplinary proceedings made by the Government, are regulated by law rather than by collective agreements even though the Government does enter into various collective agreements with unions representing public officers.3 This is because disciplinary matters concerning the public service are regulated by the Constitution of Malta and by subsidiary legislation made thereunder. Indeed, in terms of the Constitution of Malta; power to make appointments to public offices and to remove and to exercise disciplinary control over persons holding or acting in any such offices shall vest in the Prime Minister, acting on the recommendation of the Public Service Commission. 4 This provision, therefore, deals with the appointment, the promotion, the removal, and the taking of disciplinary proceedings, against a public officer. Although the Constitution vests these fourfold powers in the Prime Minister, as a matter of fact, the Prime Minister is obliged to act on the recommendation of the Public Service Commission and not after consultation with the Public Service Commission. This 3

See Cory Greenland, The Collective Agreement in Maltese Industrial Relations (Union Print, 2012) 4 Constitution of Malta, article 110(1) 4

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means that the Prime Minister is bound by the recommendation of the Public Service Commission. The Constitution does contemplate situations where the Prime Minister simply consults the Public Service Commission rather than acts on its recommendation. The Prime Minister has this privilege when it comes to: (a) the appointment of Permanent Secretaries;5 (b) the appointment of heads of departments of government other than those whose manner of appointment is specifically provided in the Constitution;6 and (c) the appointment and transfer to diplomatic offices. 7 Another exception is that in relation to the Secretary to the Cabinet who is designated, not appointed, by the Prime Minister with no involvement whatsoever of the Public Service Commission.8 However, all these exceptions to the general rule that the Prime Minister has to act on the recommendation of the Public Service Commission relate to appointments, which include also promotions in so far as promotions are in themselves appointments to a new office. Nonetheless, the removal and the taking of disciplinary proceedings – which is the subject-matter of this paper – do not allow any exception to the general rule. Hence, the Prime Minister is bound by the recommendation of the Public Service Commission with regard to the removal and discipline of public officers. Moreover, it is to be observed that the Constitution is referring to public officers and not to officers employed by public corporations, government owned companies, and government foundations. These latter three entities enjoy their own separate and distinct disciplinary procedure and neither the Public Service Commission nor the Prime Minister, as Minister responsible for the public service, has a stake in those proceedings. The article limits itself to the removal of and discipline against public officers. What is to be noted, nevertheless, is that while the Constitution states who is responsible for the removal and discipline of public officers, it does not set out the applicable 5

ibid, article 92(3) ibid, article 92(4) 7 ibid, article 112 8 ibid, article 94 6

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procedure. This procedure is set out in the Disciplinary Procedure in the Public Service Commission Regulations.9

The Key Principles which a Disciplinary Board has to observe in order that neither Party is Prejudiced

There are general principles of law which apply to administrative tribunals in the conduct of proceedings before them. Although these general principles of law are not specifically addressed to disciplinary boards in so far as these do not fall under the definition of an administrative tribunal, courts tend to apply these general principles of law as well to disciplinary boards. This is done, as these general principles are intended to ensure that the parties thereto are all given a fair trial, irrespective of whether parties appear before an administrative tribunal or a disciplinary board. In so far as administrative tribunals are concerned, these general principles of law are known as the principles of good administrative behaviour. They have been incorporated in article 3 of the Administrative Justice Act. 10 The principles of good administrative behaviour include the following: (a) an administrative tribunal shall respect the parties’ right to a fair hearing, including the principles of natural justice, namely: (i) nemo judex in causa sua,11 and (ii) audi et alteram partem;12 (b) the time within which an administrative tribunal shall take its decision shall be reasonable in the light of the circumstances of each case. The decision shall be delivered as soon as possible 9

These regulations were preceded by the Public Service Commission (Disciplinary Procedure) Regulations, 1977. See Joseph Attard, Industrial Relations in Malta (PEG Ltd., 1984) 131 10 For a discussion of the Bill leading to the Administrative Justice Act, see Kevin Aquilina, ‘Empowering the Citizen Under the Law: The Administrative Justice Bill’ (2006) Issue 14 Law & Practice, Malta Chamber of Advocates 6-14 and Caroline Farrugia, ‘The Implication of the Administrative Justice Act – Chapter 490 of the Laws of Malta’ (LL.D. thesis, University of Malta 2008) 11 Nemo judex in causa sua means that no person can be a judge in his or her own cause. Otherwise, the process would not be a fair one. 12 Audi et alteram partem means that all parties have to be heard. 6

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(c)

(d)

(e)

(f)

(g) (h)

and for this purpose the tribunal shall deliver one decision about all matters involved in the cause whether they are of a preliminary, procedural or of a substantive nature; an administrative tribunal shall ensure that there shall be procedural equality between the parties to the proceedings. Each party shall be given an opportunity to present its case, whether in writing or orally or both, without being placed at a disadvantage; an administrative tribunal shall ensure that the public administration makes available the documents and information relevant to the case and that the other party or parties to the proceedings have access to these documents and information; proceedings before an administrative tribunal shall be adversarial in nature. All evidence admitted by such a tribunal shall, in principle, be made available to the parties with a view to adversarial argument; an administrative tribunal shall be in a position to examine all of the factual and legal issues relevant to the case presented by the parties in terms of the applicable law; save as otherwise provided by law, the proceedings before an administrative tribunal shall be conducted in public; reasons shall be given for the judgment. An administrative tribunal shall indicate, with sufficient clarity, the grounds on which it bases its decisions. Although it shall not be necessary for a tribunal to deal with every point raised in argument, a submission that would, if accepted, be decisive for the outcome of the case, shall require a specific and express response.

More specifically, the law lays out certain key principles which a disciplinary board has to observe so that neither party is prejudiced. A number of the principles of good administrative behaviour are resorted to by disciplinary boards in the law setting out the procedure to be adopted before them. In so far as the public service is concerned, the matter is regulated by the Disciplinary Procedure in the Public Service Commission Regulations referred to above. These regulations are made in terms of article 121(1) of the Constitution of Malta which provides as follows: Any Commission established by the Constitution may, with the consent of the Prime Minister or such other 7

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Minister as may be authorised in that behalf by the Prime Minister by regulations or otherwise regulate its own procedure and confer powers and impose duties on any public officer or authority of the Government of Malta for the purpose of the discharge of its functions.13 In particular these regulations provide for the rights of a public officer answering a disciplinary charge. In terms of regulation 6(1) of the Disciplinary Procedure in the Public Service Regulations, 1999, these rights include the following: (a) the right to know the whole case against him or her; (b) the right to have adequate opportunity of making his or her defence; (c) the right to have access to all documentary evidence; and (d) the right to the assistance of a person of his or her choice in the preparation and presentation of his or her case and at every stage of any hearing before a Disciplinary Board or before the Public Service Commission, including during any hearing and appeal.

Rights Enjoyed by an Officer Answering a Disciplinary Charge

4.1 The right to know the whole case against him or her This right requires that all evidence against the officer answering a disciplinary charge has to result from the proceedings to which the said officer has a right to attend and participate. The information which has to be given to such officer must be clear and precise. Vague statements would not be admissible. If for example, the officer is accused that he misbehaved, he must be informed of what such alleged misbehaviour consists of, when the misbehaviour took place, whether the misbehaviour was a sole instance or whether it was repetitive, the means used to commit such misbehaviour, etc. 13

Constitution of Malta, article 121(1) 8

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In order to be able to defend oneself, the officer answering a disciplinary charge, must know what the contents of the charge are and the actual details. If the details are not contained in the charge, they should result during the hearings. In the case of the public service, the offences against discipline are set out in the regulations themselves but this is not normally the case with collective agreements. Collective agreements do not usually set out the charges which the management can proffer against an employee. However, it has to be noted that certain collective agreements do list the charges and discriminate between them as to their seriousness, with charges being classified as, for instance, minor, medium and major. Knowledge of the whole case against the officer answering a disciplinary charge implies that the said officer has to be privy to any evidence produced by the head of department against him or her. Such evidence can take various forms. It could be witnesses giving evidence against the accused who, for instance, might have seen him or her vandalising government property; or it could be a member of the public who reported the employee to his or her Head of Department because the employee was not at his or her post at work but idling at the place of work and the member of the public had to wait for an inordinate time to be served. Evidence can also be in the form of documentary evidence such as when the employee authorised a social security benefit to his or her cousin which the cousin was not entitled at law to enjoy. In this case, the officer’s signature authorising a benefit would constitute proof against that officer. Evidence could also be obtained through experts. If the officer is disputing that the signature authorising the benefit mentioned earlier is not his or hers but of some other officer, the Head of Department may engage a calligraphic expert to determine whether the signature on the document in question belongs to that officer or not. Today, various technologies can be used at the workplace as evidence against an officer such as a palm reader or some other code which gives access to certain offices, stores, equipment, archives, IT servers, etc. Again, the Head of Department cannot, in the ordinary course of proceedings, submit any form of evidence whatsoever without informing the officer answering a disciplinary charge of such evidence. The said officer has to have access to all such 9

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evidence and should also be in a position to challenge its authenticity, reliability, and accuracy as well. 4.2 The right of have adequate opportunity of making his or her defence The right to have adequate opportunity to make one’s defence is not only measured quantitatively but also qualitatively. The situation should never arise where, for instance, the Head of Department is given ten sittings to bring his or her evidence against the officer answering a disciplinary charge while the said officer is afforded only five minutes during the last sitting. Naturally, the right to have an adequate opportunity to make his or her defence is not measured very rigidly such as by giving the same time to both parties as it could be that one of the parties needs less time to make his case in a sufficient manner. For instance, if the accused’s line of defence is that s/he had not perpetrated the disciplinary offence and that such offence was committed by another officer, s/he only needs to give evidence to that effect. There is thus no need for equality of time to be given to both parties. However, what is important is that the officer answering a disciplinary charge is afforded the possibility to bring all relevant evidence. Irrelevant evidence should not be allowed to be produced as it simply contributes to lengthening the proceedings and the Disciplinary Board would, after all, ignore it when taking its decision. On the other hand, if the evidence is relevant, then no accused should be denied the right to produce it. The disciplinary board should not attempt to silence the officer or disallow him or her from bringing relevant evidence, as that would be tantamount to denying him or her a fair trial. The officer answering a disciplinary charge should not be compelled to give evidence, as this could lead to one’s incrimination. The right to silence is sacrosanct and applies even in disciplinary proceedings. An officer answering a disciplinary charge is presumed innocent until s/he is found guilty. The right against self-incrimination is fundamental in disciplinary proceedings. This is especially important if the said officer is undergoing or might end up undergoing criminal proceedings, in which case s/he cannot be required to give evidence in the 10

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disciplinary proceedings as that evidence may subsequently be used against him or her by the police in the criminal proceedings. A similar case occurred when the Speaker was requested to deliver a ruling with regard to witnesses undergoing criminal proceedings but were still requested to answer questions before the Public Accounts Committee of the House of Representatives. In this case, the Speaker ruled that witnesses should not be compelled to answer incriminating questions but should still, nonetheless, answer nonincriminating questions.14 In reality, it might not be that easy to distinguish between incriminating and non-incriminating questions and what might at face value appear to be an innocent question – such as stating one’s own particulars – might end up being of an incriminating nature. Furthermore, the officer answering a disciplinary charge must be given an adequate opportunity to make his defence. ‘Adequate opportunity’ should be interpreted to mean ‘adequate time and opportunity’. This is because the opportunity can be a onetime opportunity, for instance, one sitting or a few minutes during a sitting. However, it might be the case that one sitting would not suffice for the officer answering a disciplinary charge to bring his or her defence and therefore, more than one sitting would be needed. Thus, adequate time should be given for the preparation of one’s defence. That being said, however, adequate time does not mean an interminable amount of time and the officer answering a disciplinary charge has to be reasonable in demanding and making use of the time requested. The evidence has to be relevant and s/he should do all s/he can do to produce such evidence in the shortest possible time. It might be, for instance, practical to renounce to some witnesses when these will all be repeating the same thing in order to expedite proceedings and a statement can be inserted in the minutes of the disciplinary proceedings to that effect. If the Head of Department does not object to such sworn statement, then there is no need to produce a multiplicity of witnesses for all to make the same point. If, however, such a sworn statement is contested by the Head of Department, then the officer answering a disciplinary charge will have no other option but to adduce this relevant evidence. The Parliament of Malta, Is-Sedja Titkellem: Ġabra ta’ Deċiżjonijiet mogħtija minn April 2013 sa Marzu 2014 (House of Representatives, April 2014) 69-84 14

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officer answering a disciplinary charge will have to keep in mind certain constraints which induce him or her to expedite the disciplinary proceedings such as the fact that he might be suspended and is on half pay; that s/he has to pay the bills of legal counsel; that s/he might be incurring other costs in relation to the disciplinary proceedings, such as, engagement of an ex parte expert witness, recourse to psychological treatment or purchase of anti-depressants for the stress occasioned by the disciplinary proceedings, etc. The longer the disciplinary proceedings procrastinate, the higher the anxiety that might be caused to the officer. 4.3 The right to have access to all documentary evidence This right is exercisable once a document has been produced and continues to be exercised right until the end of the case and afterwards as well. If a document is produced in evidence and the officer answering a disciplinary charge has seen it once, s/he cannot be deprived of seeing that document for a second or subsequent time. S/he can see it as many times as s/he wants. Even when the case is decided and the said officer might want to appeal the conviction and/or the punishment, s/he still has the right to access the document. The question which arises here is whether s/he has a right to take copies of that document. The right to have access to such documents is different from the right to have copies of such documents or to have copies of such documents made free of charge. These are three distinct rights. The regulations only allow for the right to have access to documents not for the right to obtain copies of those documents or the right to obtain copies of those documents free of charge. However, if copies are to be given then the fee to be levied for the copies has to be a reasonable one. It would be very unfair to allow the making of copies but then request the payment of an exorbitant price for those copies such as a thousand euro per page. This would amount to a prohibitive amount and would deny the officer, in practice, the right to make copies of such documents. Such fee has to be reasonable even if there is no law which states so as otherwise the officer answering a disciplinary charge will be prejudiced in his or her right to defend himself or herself of the charge proffered against him or her. 12

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Any documentary evidence produced after the commencement of the hearing of the case cannot be used against the officer answering a disciplinary charge unless the officer had been previously supplied with a copy thereof or given access thereto and given enough time to consider and make submissions thereupon. 4.4 The right to the assistance of a person of his or her choice in the preparation and presentation of his or her case and at every stage of any hearing before a Disciplinary Board or before the Public Service Commission, including during any hearing and appeal The regulations permit the officer answering a disciplinary charge to be assisted by any person of his or her choice. Such a person need not necessarily be a member of the legal profession such as an advocate or a legal procurator. It could be a trade union representative, a colleague at the place of work, a friend, a member of the family or any another person whosoever such a person may be, as no restriction is imposed by the regulations. Such person need not be the same person throughout the whole proceedings but may be changed. Such assistance is granted throughout the whole procedure, even during appeal stage and at all hearings. It is not of course possible for the Disciplinary Board or the Public Service Commission to exclude the assistant during any stage of the proceedings as s/he has a right to be present to assist his or her client or friend. On the other hand, this right can be renounced and if the officer does not want to be assisted and wants to defend him/herself in person without assistance then this is possible as well. This is not a non-derogable right but a right which can be renounced. 4.5 Right to know the outcome of disciplinary proceedings An officer answering a disciplinary charge is entitled: as soon as possible, but not later than twenty workings days from the date when the Head of Department or the Public Service Commission, as the case may be, takes the final decision about the guilt or otherwise of the officer concerned, to know the decision on any report or charge and the penalty, if any, imposed upon 13

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him or her. Such information shall be communicated in writing by the Head of Department or the Executive Secretary to the Public Service Commission, as the case may be.15 After the disciplinary proceedings come to an end, the officer has a right to know the outcome thereof. If s/he is found guilty s/he should be informed in a reasonable time. If any punishment is inflicted upon him or her, s/he should also know of it. This is very important if s/he intends to appeal the conviction and/or punishment before the Public Service Commission. If it is the Public Service Commission which has decided his or her case, s/he might have recourse before a court to challenge that decision. Hence s/he has a right to know the outcome of the proceedings. 4.6 Right to know the reasons which motivate the decision The provision does not require the Disciplinary Board or the Public Service Commission to state the reasons for their decision. Although the law is silent on this aspect, the officer answering a disciplinary charge has a right to know such reasons. The matter, though not dealt with specifically in the regulations, is dealt with by the following case law: (a) Anthony Ellul Sullivan noe vs Lino C Vassallo noe;16 (b) Commissioner of Land vs John Lowell noe;17 (c) Dr Alfred Sant noe vs Commissioner of Inland Revenue;18 (d) Mary Grech vs Minister responsible for the Development of the Infrastructure.19 In these judgments, the Court of Appeal held that reasons should be given for judgment.

Subsidiary Legislation Const 03, regulation 6(3) Collection of Decisions of the Superior Courts of Malta, Volume 71 Part 2 Page 356, Court of Appeal, 26 June 1987 17 ibid, Volume 71 Part 2 Page 501, Court of Appeal – Commercial Jurisdiction, 26 October 1987 18 Court of Appeal, 4 March 1992 (Unpublished) 19 Court of Appeal, 29 January 1993 (Unpublished) 16

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4.7 Are the above-listed rights exhaustive or are there other unwritten rights which apply to disciplinary proceedings? The rights listed in the regulations are not exhaustive because there are certain legal principles which apply to disciplinary proceedings which are not listed in the regulations themselves. One such right is that an officer answering a disciplinary charge enjoys the right to silence, mentioned above, the right to have adequate time to prepare his defence, the right to an independent and impartial disciplinary board and disciplinary board of appeal. These rights have to be ascertained by the disciplinary board concerned to ensure that the officer answering a disciplinary charge is given a fair trial. Once again, although not stated in the regulations, the burden of proof is on the Head of Department and, as a rule, the officer answering a disciplinary charge is not required to prove his or her innocence. However, as here we are dealing with civil not criminal proceedings, the burden of proof need not be beyond reasonable doubt as is the case in criminal proceedings but on a balance of probabilities as is the case in civil litigation.

Issues relating to the Composition of the Disciplinary Board

The disciplinary board has to be composed of a chairperson and members who are not biased in favour of the management or Head of Department or of the officer answering a disciplinary charge. If these safeguards against bias and prejudice are not in place, then the whole disciplinary process will end up tainted by procedural irregularities.20 This would mean that all the disciplinary proceedings would have taken place for nothing and that various expenses, time and other resources would have been literally wasted. To avoid such dissipation of resources, the parties have to ensure that the disciplinary board is constituted of chairpersons and members who will not prejudice the proceedings. This matter has to be addressed on a case by case basis for not all disciplinary boards are selected in the same manner. For 20

Subsidiary Legislation Const 03, regulation 21(4) (5) and (6) 15

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instance, in the private sector, disciplinary boards can be made up of members of the management. In the public service, a more transparent approach is employed. The 1999 regulations allow for the appointment of standing disciplinary panels and disciplinary boards.21 Indeed, the Permanent Secretary of each Ministry is empowered, following the approval of the Public Service Commission, to establish a Standing Disciplinary Panel consisting of suitable and competent former public officers. 22 Panel members are chosen from former public officers not from serving public officers.23 This ensures an element of independence because serving officers may be subject to pressure by their Head of Department while in the case of former public officers there is less chance of such pressure being exerted upon them. Panel members serve for two years but may get a one year extension if approved by the Public Service Commission.24 The role of the Public Service Commission is to act as a supervisory authority intended to ensure that panel members act impartially and behave properly. 25 The regulations do allow a panel member to sit on more than one panel and even concurrently.26 The case can thus emerge that a person is appointed as a panel member in one ministry and, a year later, is appointed as a panel member of another Ministry. This is a perfectly possible scenario and the three year rule applies in the same manner to the second or subsequent appointment. The three year appointment is not a fixed one in the sense that a panel member may be removed by the Public Service Commission during tenure. 27 As stated above, the Commission is in charge of the integrity of the disciplinary procedure as, after all, it appoints the panel members and it should oversee their conduct. In the case of misbehaviour it can remove the panel members and there is no established procedure as to how it can do so.

ibid, regulation 21 ibid, regulation 21(1) 23 ibid 24 ibid, regulation 21(2) 25 ibid, regulation 21(2) second proviso 26 ibid, regulation 21(2) 27 ibid, regulation 21(2) second proviso 22

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The Process of the Internal Disciplinary Board itself

The Disciplinary Board has the power to investigate the case, establish the facts, and communicate its findings to the Head of Department and to the officer charged as early as practicable, and in no case later than thirty working days from the date on which the case is referred to it.28 The Disciplinary Board has the power to seek expert advice whenever it considers such advice to be necessary or expedient, and to summon any person to appear before it and give evidence or to produce any document. 29 The Board may also direct that any evidence given before it is to be confirmed by an affidavit.30 6.1 Procedure at disciplinary hearings A Disciplinary Board, when hearing a charge for breach of discipline, has to afford a fair opportunity to both sides to present their case.31 Furthermore, a Disciplinary Board is to dispense with all undue formalities and ensure that justice is done expeditiously and according to the substantive merits of the case. 32 The Disciplinary Board should thus act in an informal manner and not introduce excessive formalism in its proceedings making it akin more to a court of law rather than to an informal board. ‘Undue formalities’ means that the Disciplinary Board should not waste its time discussing complicated and intricate procedures which it should follow but, on the contrary, keep things as simple as possible. Justice has to be done in a speedy manner and the proceedings should not drag on ad infinitum. Expediency, of course, does not imply that the Disciplinary Board should ride roughshod over the rights of the parties for the regulations make it quite clear that justice must be done according to the substantive merits of the case, that is, that the parties are given ample time to plead their case and discuss the substance of the 28

ibid, regulation 22(1) ibid, regulation 22(2) ibid, regulation 22(3) 31 ibid, regulation 23(1) 32 ibid 29 30

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merits of the case.33 Substance here is used in contradistinction to procedure. All the evidence adduced, for instance, relates to the substance – not to the procedure – of the merits of the case. A distinction is thus drawn between the substance of the case, the charge and the evidence in favour or against that charge, and the procedure to be followed by the Disciplinary Board in compiling the evidence, deliberating thereupon and arriving at a decision. 6.2 Disciplinary Board may act in the absence of the officer charged In criminal proceedings, according to the Criminal Code, it is not possible for a court of justice of criminal jurisdiction to hear a case in the absence of the accused except in rare occasions where, for instance, the accused misbehaves in court and the court orders his or her removal so that the case continues in the accused’s absence;34 or in the case of contraventions where the accused is allowed to be represented by another person; 35 or in the case of contestation of insanity by the Attorney General or insanity at the time of the inquiry.36 However, this is not the rule in the case of disciplinary proceedings. A Disciplinary Board may proceed with the case notwithstanding the absence of the officer charged provided that notice of the hearing has been given to the person charged.37 If, on the contrary, no such notice of the hearing is given to the accused, then the Disciplinary Board has no other option but to postpone the hearing to another date and time while ensuring, in the meantime, that the person charged is notified of the new date and time of the hearing. 6.3 Hearings to be held in private Contrary to criminal cases where, bar a few exceptions, proceedings are normally held in public, disciplinary proceedings

ibid, regulation 23(1) Criminal Code, Chapter 9 of the Laws of Malta, article 524 ibid, articles 374(b) and 375(b) 36 ibid, article 402(5)(6) and (7) 37 Subsidiary Legislation Const 03, regulation 23(3) 34 35

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are held in private.38 This means that the public – including the media – are not allowed to attend those proceedings and to report in the media thereupon. The media cannot be invited by the Disciplinary Board to attend those proceedings and if invited by any one or both of the parties, the media still cannot cover those proceedings. 6.4 Other procedural rights Three further rights are provided to the officer answering a disciplinary charge. S/he is to be given full opportunity to defend himself or herself,39 to produce witnesses,40 and to cross-examine the witnesses called in support of the case against him or her.41 Cross-examination means that the officer charged or his or her assistant can ask questions to all the witnesses of the Head of Department accusing him or her when the Head of Department has finished asking questions to such witnesses, that is, when the examination-in-chief is concluded. 6.5 Appeals from disciplinary decisions A further right enjoyed by the officer answering a disciplinary charge is his or her right of appeal. 42 The fact that the Disciplinary Board has found against him or her does not mean that the disciplinary proceedings come to an end. On the contrary, if the officer charged is dissatisfied of the finding of guilt and any corresponding penalty imposed by the Head of Department or if the said officer is of the view that there has been a gross disregard of the procedures laid down in the 1999 Regulations which has prejudiced his or her interests, he can lodge an appeal with the Public Service Commission. It may be the case, for example, that the Head of Department has inflicted a punishment for a major offence when the offence in question was of a minor nature. Alternatively, it might happen that the Disciplinary Board has denied the officer charged 38

ibid, regulation 23(4)(a) ibid, regulation 23(4)(b) ibid 41 ibid, regulation 23(4)(c) 42 ibid, regulation 30(1) 39 40

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one or more of the rights conferred upon him or her by law. Before the Public Service Commission, the officer answering a disciplinary charge has the right to make oral representations but does not enjoy the right to produce any fresh evidence. 43 6.6 The rights of the parties before such boards Rights are not only given to the officer answering a disciplinary charge but even to the Head of Department concerned. For instance, where a Head of Department proffering charges of misconduct or breach of discipline against an officer, the Head is entitled to be represented by any person of his choice, at every stage of any hearing before a Disciplinary Board or before the Public Service Commission, including any hearing on appeal.

Summary Suspension

A public officer may be summarily suspended for two working days. Such suspension may be extended up to a maximum of five working days.44 In order to suspend a public officer, the Head of Department need not carry out any investigation but may do so on his or her own judgment. However, if the Head of Department does not follow up the summary suspension with disciplinary proceedings, the public officer is entitled to receive the full amount of salary withheld during the period of summary suspension. 45 Summary suspension takes place in the following cases: (a) on grounds of alleged misconduct; (b) breach of discipline; (c) disobeying lawful orders, whether written or verbal; (d) for the purpose of properly carrying out investigations into an alleged offence.46

ibid, regulation 30(7) ibid, regulation 11(1) 45 ibid, regulation 11(2) 46 ibid, regulation 11(1) 44

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In the latter instance, the summary suspension is necessitated by the fact that if the public officer were to be allowed to continue to attend at his or her office, the officer might destroy, remove, or add to or cause to be removed, destroyed or added to, any official document, instrument or matter, that is, any evidence that may be used against him or her in the disciplinary proceedings. 7.1 Suspension during disciplinary proceedings The regulations distinguish between a summary suspension as explained above and a temporary suspension during disciplinary proceedings. Whilst the summary suspension discussed above is of a very short duration – up to a maximum of five working days – in the case of a temporary suspension during disciplinary proceedings, this period is by far longer.47 But in the case of the suspension during disciplinary proceedings, the decision is not taken by the Head of Department but by the Prime Minister acting on the recommendation of the Public Service Commission. 48 The Head of Department will have to make a case for such suspension.

Conclusion

The Disciplinary Procedures in the Public Service Commission Regulations are very detailed. In fact they are twentysix pages long. Nevertheless, when one goes through these regulations one concludes that they do allow the officer answering a disciplinary charge a right to a fair hearing so that the said officer is afforded all the rights at law which ensure that the disciplinary proceedings, including an appeal from the decision of the Disciplinary Board, are fair, transparent and just. This is because these disciplinary proceedings aim to ensure to the officer answering a disciplinary charge due process of law, and are not tilted in favour of the Head of Department to ensure a conviction at all costs. It can be said that these regulations constitute a model law as to how 47 48

ibid, regulation 12(1) ibid, regulation 12(2) 21

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disciplinary proceedings should be conducted in full fairness to all parties concerned.

AVIATION LAW

MH17 Tragedy: Where does Responsibility Start and Where does it End? Lara Buttigieg

Disruptive Passengers on Board Aircraft Rebekah Tanti-Dougall

Lara Buttigieg

MH17 TRAGEDY: WHERE DOES RESPONSIBILITY START AND WHERE DOES IT END? LARA BUTTIGIEG

_______________________________________________________ Dr Lara Buttigieg graduated from the University of Malta (LL.D) in 2010 following the submission of a thesis entitled ‘Re-defining Maritime Piracy: An International Perspective’. She was admitted to the Bar in December 2010. Dr Buttigieg obtained a PG Dip (Maritime Law) in 2013 at the University of London, Queen Mary University. In 2012, Dr Buttigieg started working with Transport Malta (Civil Aviation Directorate) as a legal officer. She is currently appointed as a member to the Commission of Experts of the Supervisory Authority of the International Registry (CESAIR). Dr Buttigieg is also a member of the Airport Charges Regulatory Board since 2014. Earlier this year Dr Buttigieg has commenced a Diploma on Logistics and Transport Management with the University of Malta.

____________________________________________________________

Introduction

Two catastrophes. Two Boeings. One airline. More than 800 persons dead or disappeared. Indeed, Malaysia is trying to recover from two tragedies that have hit its national airline in less than five months. On March 8 2014, a Malaysia Airlines Jetliner went astray an hour after take-off from Kuala Lumpur, creating an international mystery that to date remains unresolved. On 17 July 2014, Malaysia and its same airline were again catapulted into another crisis where another Boeing 777 was reportedly shot down over Ukraine. The first disaster deeply blemished Malaysia and left everyone in astonishment and panic. Flight 370 had gone off course during a flight to Beijing and is believed to have crashed in the Indian Ocean off the Western Coast of Australia. On the other hand, there is no mystery of the whereabouts of the second plane, which went down while on a scheduled international flight from Amsterdam to Kuala Lumpur with 283 passengers and 15 crew

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members on board.1 Its flotsam was found in Ukraine with no survivors. The plane was shot down at an altitude of 33,000 feet; 2 however, Ukrainian authorities stated that the plane was intentionally brought down by a missile over the violence-wracked Eastern part of the country.3

Legal Issues surrounding the MH17 Tragedy

The MH174 plane crash raises countless doubts and questions, not only of a political nature but also of a legal character and has resulted in a big game of international politics, and also involved several international bodies such as the International Civil Aviation Organisation (herein referred as the ‘ICAO’) and the United Nations (herein referred as the ‘UN’). The first doubt relates to as to why a civilian aircraft was flying over a war zone. Some have questioned as to why the Malaysia Airlines flight MAS175 was flying over east Ukraine, since this has been a scenario of intense war between Russia and Ukraine for several months. Since the downing of the aircraft, many commercial jets have steered clear of Ukraine, but how often do passenger planes normally fly over war zones? Deviating from the usual route so as to avoid a conflict area means spending more time in the air and burning more fuel, so airlines go directly through such war zone area, as they consider it Peter Leonard, ‘Ukraine: Pro-Russia rebels downed Malaysian plane’ (Radio Metafora, 18 July 2014) <http://www.radiometafora.ro/2014/07/18/ukraine-prorussia-rebels-downed-malaysian-plane-18-7-14-nr-194-anul-xv-anul-xxv/> accessed 17 November 2014 2 Chris Brummitt, ‘MH17 crash: For Malaysia Airlines, disaster strikes twice’, (The Sydney Morning Herald, 18 July 2014) <http://www.smh.com.au/world/mh17-crashfor-malaysia-airlines-disaster-strikes-twice-20140718-zua18.html>accessed 17 November 2014 3 Greg Miller, ‘US discloses intelligence on downing of Malaysian Jet,’ (The Washington Post, 22 July 2014) <http://www.washingtonpost.com/world/nationalsecurity/us-discloses-intelligence-on-downing-of-malaysianjet/2014/07/22/b178fe58-11e1-11e4-98ee-daea85133bc9_story.html> accessed 17 November 2014 4 MH is the IATA (International Aviation Transport Association) designator. 5 MAS is the ICAO designator. The flight is also marketed as KLM Flight 4103 (KL 4103) through a code share agreement. 1

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safe and cost-effective to do so.6 Malaysia Airlines was not the only operator to cross eastern Ukraine at the time of the catastrophe. The route in question, L980, was the flight path chosen by many passenger aircraft that travel between Europe and South Asia, since wars usually have very little impact on commercial flights. The flight path is commonly used between Europe and Asia flight from a different carrier was also on the same route at the time of the MH17 tragic shooting, as were a number of other flights from other carriers during those days.7 The International Civil Aviation Organisation, a United Nations body, and also national aviation authorities publish what are known as Notices to Airmen, or NOTAMs, which are an admonition of potential hazards, such as a No-Fly Zone, as declared in the case of Libya. Furthermore, all airlines must file flight plans with the Air Navigation Service Providers, and must choose their route according to NOTAMs and other rules of the air, such as not to overfly sensitive military installations. A NOTAM had put the East edge of Ukrainian airspace off limits up to 33,000 feet. The ICAO said that it is always the responsibility of the Member States to issue warnings or airspace and ceiling restrictions based on what they consider to be a potential threat to civilian air services in the airspace under their sovereign control. The ICAO is said not to issue these warnings except under extraordinary circumstances, such as when States may not be able to do so due to command and control breakdowns. Another instance in which the ICAO may intervene occurs when a State does not have good diplomatic relations with the States that need to receive the safety advice, and asks the ICAO to contact such adjacent States on its behalf. Preceding the MH17 downing, several military Ukrainian planes and helicopters had been shot down, including an IL-76 airlifter, a Su-25 fighter and an AN26 military transport. Even if the MH17 has flown a few hundred miles north of its planned course to avoid a storm, its altitude should have marked it out as a passenger flight. No one thought that SW and TW, ‘Why was MH17, a civilian airliner, flying over a war zone?’ (The Economist, 21 July 2014) <http://www.economist.com/blogs/economistexplains/2014/07/economist-explains-14> accessed 17 November 2014 7 John Croft, ‘MH17 Flight Route Approved By Eurocontrol, Safe Per ICAO, IATA’ (Aviation Week, 18 July 2014) <http://aviationweek.com/commercial-aviation/mh17flight-route-approved-eurocontrol-safe-icao-iata> accessed 17 November 2014 6

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commercial flights could be in any danger over East Ukraine but after what has happened, it is presumed that it will be long before flights over East Ukraine are resumed.8 Malaysia Airlines reiterated that the route for Flight MH17 over Ukraine had been accepted by Eurocontrol for an altitude of 35,000ft, but Ukrainian controllers kept the 777-200ER (9M-MRD) flying at 33,000 ft instead. Despite the difference in altitude, the aircraft was in airspace that was deemed to be safe to fly in by both the ICAO and also the International Air Transport Association (herein referred as the ‘IATA’), according to the airline’s statements.9 In fact, the restrictions linked to MH17’s particular route only allowed flights flying higher than 32,000ft, which was a restriction put in place ‘to combat actions on the territory of Ukraine near the border with the Russian Federation’ according to the NOTAM.10 The NOTAM goes on to say that the restrictions were to ensure international flight safety due to the ‘facts of firing from the territory of the Ukraine towards the territory of the Russian Federation’. That the route was open above 32,000ft was therefore confirmed by both Eurocontrol and also by IATA. After the shoot down, the Ukrainian air service provider closed air routes in the Flight Information Region (herein referred as the ‘FIR’) covering the Eastern part of the country. Eurocontrol rejected all flight plans that included such route, adding that the European Aviation Crisis Coordination Cell (herein referred as the ‘EACCC’) was being activated so as to organise the response to the airspace closure impact on aviation.

Attribution of Responsibility

However, the most pertinent question remains as to who is responsible for shooting down the aircraft. Is it possible to attribute this action to any State, if at all? Would it be possible and easy to

SW and TW (n 6) ibid 10 Croft (n 7) 9

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prosecute and punish perpetrators of the tragedy? 11 Who is to have jurisdiction over such a case? There are also many diplomatic implications, apart from legal questions, which may come to the fore, depending on who is responsible for the incident. There have been persistent conspiracy theories over the doom of the aircraft, including that it might have been intentionally shot down. The United States has accused Russia of backing the rebels in Ukraine, saying that the Russian government has created the conditions that led to the MH17 disaster. On the other hand, Kiev accused the supporters of independence in the turbulent Donetsk Region of downing the passenger plane with a surface-to-air missile. However, the Donetsk Peoples’ Republic leader said that the local militia did not have the means to shoot down a target at such a high flying altitude.12 Ukrainian President, Petro Poroshenko, described the crash as an act of terrorism, whilst Russian President, Vladimir Putin, declared that the State over whose territory this occurred bears responsibility for this awful tragedy. 13 But could Russia really be held legally answerable for the rebels’ actions? If it were attested that the rebels shot down the Malaysia Airlines plane, Russia will have some staid questions to answer since it has allegedly armed, trained and funded the separatists. Even so, this might not be enough to accuse Russia of being legally responsible for such a tragedy. Russian military representatives released some data that was gathered as part of the evidence into the July 17 crash, stating that the Russian monitoring systems had detected up to four Ukrainian Buk M1 air defence systems in proximity of the crash on that tragic

Tomasz Lachowski, ‘MH17 crash under legal scrutiny’ (Law Vision, The Daily Star, 22 July 2014) <http://www.thedailystar.net/mh17-crash-under-legal-scrutiny-34279> accessed 17 November 2014 12 Ria Novosti, ‘Flight MH17 Crash resulted from Ukraine’s Disregard of ICAO Regulations’ (Sputnik, 24 July 2014) <http://en.ria.ru/world/20140724/191200199/Flight-MH17-Crash-Resulted-FromUkraines-Disregard-of-ICAO.html> accessed 19 November 2014 13 Melanie Klinkner, ‘International Law and Flight MH17’ (The Explainer, 18 July 2014) <http://theconversation.com/explainer-international-law-and-flight-mh1729416> accessed 19 November 2014 11

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day.14 The complexity of the issue arises due to the increased activity of Ukrainian radars and a military aircraft approaching the passenger plane just minutes before the disaster. It is thus, apparent that Kiev will also have some ardent questions to answer, apart from Russia. Both Ukraine and Russia constantly blame each other for causing the MH17 crash. Even though the crash took place on Ukrainian soil, this does not automatically lead to its international responsibility. The Ukrainian government is only de iure host of the eastern part of the country which is de facto ruled by the proRussian rebels. In order to attribute the action conducted by separatists in Russia, one must prove that the latter had effective control over the rebel groups and this is what appears to be problematic, especially in the light of any International Court proceedings.

The Test for Responsibility

The issue of State responsibility for the actions of armed rebels in a foreign country under International Law was dealt with in two landmark cases. However, these two international cases have pushed the law in opposing directions. In The Nicaragua case (1986), Nicaragua sued the United States of America at the International Court of Justice (herein referred as the ‘ICJ’) for supporting the Contras, a rebel group that tried to conquer and defeat the left-wing Sandinista government. The Court had no doubt that the United States had supported the Contras or that the Contras had committed war crimes: The Court took the view that United States participation, even if preponderant or decisive, in the financing, organising, training, supplying and equipping of the Contras is still insufficient in itself

--, ‘Preliminary Report on MH17 Crash Due September’ (Sputnik, 9 September 2014) <http://sputniknews.com/world/20140909/192760336.html> accessed 17 November 2014 14

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for the purpose of attributing to the United States the acts committed by the Contras.15 4.1 Effective Control Test This became known as the ‘effective control’ test and sets a high threshold for State responsibility. Under this test, Russian President Putin and his government would have little to worry about in the unlikely event of them being hauled before a Tribunal, as their support of the separatists would not automatically lead to culpability for the MH17 tragedy. On the other hand, in The Tadic Case (1999),16 judges at The Appeals Chamber of the International Tribunal for the Prosecution of Persons Responsible for Serious Violations of International Humanitarian Law Committed in the Territory of the Former Yugoslavia since 1991 (herein referred as the ‘International Tribunal’ or ‘Tribunal’) had to decide if the Yugoslavian government could be held responsible for the BosnianSerb forces fighting in Bosnia: The control required by International Law may be deemed to exist when the State has a role in organising, co-ordinating or planning the military actions of a military group,’ the Court said in its 1999 sentencing of Bosnian-Serb Duško Tadic. Acts performed by the group or members thereof may be regarded as acts of de facto State organs regardless of any specific instruction by the Controlling State.17 4.2 Overall Control Test This became known as the ‘overall control’ test and sets a much lower threshold than in the Nicaragua case. Russian officials would find it difficult to avoid responsibility under this test. However, International Law is often defined by its own flexibility. As a result, the plausible deniability Russia has practised in its

Nicaragua v United States of America, ICJ Reports (1986) 14 The Prosecutor v Duško Tadic, Case Number: IT-94-1-T 17 ibid 16

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diplomacy may serve it just as well in the legal arena. 18Assuming that the Ukrainian rebels linked to the Donetsk Peoples’ Republic were responsible for shooting down the MH17, the prospects or probabilities of having these individuals appear in front of the International Criminal Court (herein referred as the ‘ICC’) are remote. Many key figures in the Donetsk Peoples’ Republic hold a Russian citizenship and it is alleged that some of them also have connections with Russian intelligence agencies. Whilst both Ukraine and Russia are signatories to the Rome Statute of the ICC, none have ratified it yet, so even if they are required to refrain from acts which would defeat the object and purpose of the Treaty, convincing and forcing them to submit their nationals to the jurisdiction of the Court would be more convoluted. This raises the issue of State Responsibility. If it were discovered that the attack on the MH17 was perpetrated by Russian nationals acting as State officials, this could give rise to Russian State responsibility under International Law. Russia could also be implicated if the rebels were found to be acting under Moscow’s instructions, direction or control.19 However, unless Russia is found to have exercised effective control over the Ukrainian rebels, one could question as to how far Russia could be held accountable for this incident.

The Way Forward?

Legally speaking, it is far too early a stage to discuss culpability of any State, body or individual person. Firstly, one must establish the exact circumstances surrounding the alleged shooting down of the plane. Once the manner in which the plane was brought down is established precisely, then the next step would be to establish responsibility for the crash and determine how and by whom punishment would be meted out. The responsible persons Joe Boyle, ‘MH17 plane crash: Can Russia be blamed for Ukraine rebels?’ BBC News (23 July 2014) <http://www.bbc.com/news/world-europe-28448843> accessed 19 November 2014 19 Danielle Rajendram, ‘MH17: What does International Law say?’ (The Interpreter, 25 July 2014) <http://www.lowyinterpreter.org/post/2014/07/25/MH17-Internationallegal-options.aspx> accessed 19 November 2014 18

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behind this incident must necessarily be punished. The causational effect of the plane crash must also be investigated. In fact Ukraine has asked the Netherlands for assistance in this task but the potential and likely responses using international legal structures are yet to be decided.20 Following the shooting down of MH17, the UN and governments around the world have held fervent discussions on how to bring the perpetrators to justice. Whilst the most likely current state of affairs is that pro-Russian Ukrainian rebels shot down the aircraft by blunder, the lack of clarity around the circumstances of the case complicates matters and therefore delays any attempts at decree or resolution of the case. Pending a full investigation and more considerable evidence about the actual responsibility, it is difficult to talk about any kind of accountability, legal or otherwise, at this stage, under International Law.

The Situation in East Ukraine

The situation in East Ukraine has generated the hypothetical scenario of the so-called non-international armed conflict, In order to stipulate ‘full’ international armed conflict; there should be corroboration of any direct Russian participation, as well as some form of contribution and interest. It is evident and undoubted that the MH17 incident is a crime punishable under International Law due to the diverse State parties involved. Preliminary reports suggest that an anti-aircraft missile was fired by separatist forces involved in the Ukraine war. If this were the case, then the International Law of armed conflict governs the incident.21 The conflict between the State and rebel forces in Ukraine could be therefore characterised as an armed conflict under International Law, so the International Laws of war relating to internal conflict would apply in this case.

Klinkner (n 13) Ben Saul, ‘MH17 Disaster: Bringing Those Responsible to Justice’ (The Drum, 18 July 2014) <http://www.abc.net.au/news/2014-07-18/saul-mh17-disaster-andinternational-law/5607108> accessed 19 November 2014 21

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The principle of distinction between civilians and combatants is one of the main canons of International Humanitarian Law. In armed conflicts of this nature, making civilians the object of an attack is directly proscribed under Article 13 of the Protocol additional to the Geneva Conventions of 12 August 1949, and relating to the protection of victims of non-international armed conflicts (Protocol II) (with Final Act of the Diplomatic Conference on the reaffirmation and development of international humanitarian law applicable in armed conflicts dated 10 June 1977 and resolutions adopted at the fourth session); Treaty law and the prohibition against targeting civilian objects has also been found to be a Customary International Legal norm of the International Committee of the Red Cross (herein referred as the ‘ICRC’). This is also enforced by the fact that under the Law of War, all armed forces have a duty to distinguish between military and civilian objects and not to target civilians. If the militants deliberately targeted the aircraft knowing that it was a civilian aircraft, then a war crime has been understandably committed. The UN has also adhered to the possibility that the downing of the Malaysia Airlines flight MH17, might amount to a war crime, as fighting in Ukraine has claimed over 1,000 lives with both government and rebel forces using heavy weapons in built-up areas.22 The ICAO Council President Dr Olumuyiwa Benard Aliu, assured that the ‘ICAO strongly condemns the use of weapons against international civil aviation’.23 Such action against civil passengers and crews of Malaysia Airlines MH17 is said to be wholly incompatible with the principles of the ICAO Convention. Moreover, Kiev is under binding international legal obligations, as articulated in the Chicago Convention on International Civil Aviation. Ukraine ratified the Chicago Convention on International Civil Aviation in 2003 and therefore this automatically classifies Raziye Akkoc ‘MH17 crash: Shooting down the Malaysia Airlines flight ‘may amount to a war crime’ say UN’ (The Telegraph, 28 July 2014) <http://www.telegraph.co.uk/news/worldnews/europe/ukraine/10995087/MH17crash-Shooting-down-the-Malaysia-Airlines-flight-may-amount-to-a-war-crime-saysUN.htm>l accessed 19 November 2014 23 ICAO, ‘Ukraine requests ICAO assistance in MH17 accident investigation’ (ICAO, 18 July 2014) <http://www.icao.int/Newsroom/Pages/Ukraine-requests-ICAOassistance-in-MH17-accident-investigation.aspx> accessed 19 November 2014 22

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Ukraine as an ICAO member State, with all the associated legal obligations that are applicable upon signature that this Treaty brings with it. An amendment to the Chicago Convention, Article 3bis, obliges all signatories to refrain from resorting to the use of weapons against civil aircraft in flight since such behaviour is not coherent with the standards and norms regulating cross-country interactions. Consequently, no country can use ongoing military confrontation on its territory as a right to attack a commercial plane or civil aircraft. Moreover, ICAO clearly defines, in its Manual Concerning Safety Measures Relating to Military Activities Potentially Hazardous to Civil Aircraft Operations 24 that ‘the responsibility for initiating the coordination process rests with the States whose military forces are engaged in the conflict’ as per paragraph 10.2 of the International Agreement. Therefore, the safe passage of Malaysia Airlines flight MH17 through Ukrainian airspace should have been coordinated well in advance, as stipulated by ICAO in its Manual. Incomplete coordination or lack thereof does not relieve the State of its safety obligations since the responsibility for instituting special measures to ensure the safety of international civil aircraft operations, remains with the States responsible to provide air traffic services in the airspace affected by the conflict, even in cases where coordination is not initiated or completed. This excludes any loophole that might be used by Ukraine to evade being held accountable for the tragedy.25

A War Crime or an Act of Terrorism?

However, so as to evaluate whether the shooting down of the Malaysian aircraft was a war crime or an act of terrorism, it is essential to prove the intent of the potential perpetrator. Both crimes require the mental element of the reprobates so as to be committed, which means that there should be mens rea, that is, awareness and 24

ICAO, Manual Concerning Safety Measures Relating to Military Activities Potentially Hazardous to Civil Aircraft Operations, Document 9554 25 Novosti (n 12) 35

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understanding of the crime that is being perpetrated. The situation would be more intricate if the militants did not know that the plane was a civilian one. The militants may have thought that it was a Ukrainian military plane, and in war, the adversary’s military aircraft may be lawfully attacked. Another rule should be highlighted in this context. Military forces must take all necessary precautions to verify that a target is a military one before attacking. The question is therefore whether the militants took all the necessary steps within their power and knowledge to verify the target or not. More evidence is required as to which steps the militants took before a judgment can be made. Nevertheless, there are a number of factors that indicate that the militants should have realised that it was a civil aircraft. Firstly, it was probably flying at the cruising elevation of civilian aircraft and must have had the radar signature of a civilian lane. Moreover, the registration marks were not visible from ground, and therefore the militants should have exercised extra care in investigating the nature of the aircraft before shooting at it. Just because an aircraft is in the airspace over a war zone, it does not make it a fair game to fire on any aircraft flying over such zone.26 This presents us with two scenarios, the first, where the militants were careless and irresponsible in identifying the target, so they could be prosecuted for the war crime of deliberately marking a civilian object; and the second, if the militants were not reckless and took all necessary steps to verify the target, but made a mistake. In this case a war crime was not committed. There is no absolute liability as mistakes can happen even at war. There is no suggestion that Russia devised the attack. But the attack could be a war crime nevertheless, whether committed by the separatists, Russian forces or Ukrainian forces. A war crime is an international core crime and this would make the case eligible for international prosecution. However, since neither Ukraine nor Russia are State parties to the Rome Statute of the ICC, this is a major obstacle in the prosecution of the alleged perpetrators. Another hurdle is the status of the rebels. The Ukrainian authorities cannot bring rebels to justice ‘just’ because they participated as hostilities, if their formal rebel status as combatants

Saul (n 21) 36

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is confirmed.27 According to State practice and International jurisprudence, the ICRC28 confirmed the existence of a Customary International norm requiring all feasible precaution to be taken to avoid injury to civilians and damage to civilian objects. Similarly, parties to a conflict must do everything feasible to verify that targets are purely military objectives. Therefore the perpetrators of the MH17 disaster have violated both Treaty law and Customary International Law in attacking civilians and a civilian object, and failed to take all feasible precautions to ensure the military nature of the target. However holding them accountable is something else, according to the author’s opinion.

Prosecution under the Principle of Universal Jurisdiction

Those involved may still be criminally prosecuted under the principle of universal jurisdiction by any country. There are many different fora for a possible prosecution. This could be held in the Ukrainian courts, Courts of involved countries whose nationals have been killed that is the victims, such as Australia or Netherlands, a referral by the Security Council to the International Criminal Court or an ad hoc International Criminal Tribunal such as that established by the UN Security Council to prosecute terrorist bombings in Lebanon, or war crimes in Rwanda and the former Yugoslavia. There are various legal options for jurisdiction, but it all depends on the will of the International Community to cooperate in law enforcement efforts so as to track down the perpetrators and then prosecute them accordingly. A valid legal remedy would be that of prosecuting the perpetrators of this crime under the domestic law and Courts of one of the injured parties. This was the approach taken for the Lockerbie Case29 in which two Libyan nationals were tried under Scottish law in the Netherlands for their involvement in the bombing of Pan Am

Lachowski (n 11) International Committee of the Red Cross 29 Libyan Arab Jamahiriya v United Kingdom 28

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Flight 103 over Scotland.30 In the present case, however, Ukraine would have jurisdiction over any crime committed in its airspace and it is likely that countries nationals of which have been injured such as the Netherlands, Malaysia or Australia, may also have jurisdiction to prosecute this crime. An additional option is that the perpetrators of the incident are brought before the ICC. Such a solution has been suggested by the Ukrainian Prime Minister. The ICC is charged with dealing with individuals for offences such as genocide, crimes against humanity and war crimes. To prove that a crime against humanity has been committed, the prosecution would have to prove that the attack on the MH17 was intentionally and purposely aimed at the civilians; that a State policy existed leading to the attack, that the specific attack was part of a systematic approach and that there was a link of causation between the accused and the attack per se. As prosecution of crimes against humanity requires acts to be committed as part of a widespread and systematic rule, the most likely avenue for pursuing justice for victims of the MH17 attack in the ICC would be under a war crime heading, but it is very unlikely that the ICC will get involved in this case. Nevertheless, on April 17 2014, the Ukrainian government, a signatory to the Rome Treaty which has not ratified it yet, has lodged a declaration under Article 12(3) of the ICC Statute whereby it accepts ICC jurisdiction over the alleged crimes committed in its territory.31 The downside of it all is that this Declaration specified only the time frame during which Ukraine’s former President Viktor Yanukovych was ousted amongst civil unrest that is between November 21, 2013 and February 22, 2014. Therefore the MH17 plane crash would fall outside the scope of the Declaration due to the fact that it happened after the time frame specified. There is also the possibility that under Article 13(b) of the Rome Statute, the UN Security Council (herein referred as the ‘UNSC’) could refer the situation to the ICC Prosecutor, but since 30

Rajendram (n 19) ICC, ‘Ukraine accepts ICC jurisdiction over alleged crimes committed between 21 November 2013 and 22 February 2014’ (ICC Press Release, 17 April 2014) <http://www.icccpi.int/en_menus/icc/press%20and%20media/press%20releases/Pages/pr997.aspx> accessed 19 November 2014 31

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Russia holds vetoing power on the Council, it would probably use it to block any such attempt. Instead of ending up in front of the ICC, the MH17 disaster could become subject to the International Court of Justice, which considers State disputes. This incident echoes the notorious shooting down of an Iranian civilian airliner by a United States warship in The Persian Gulf in 1988 32 where Iran brought a case against United States for the shooting down of an Iran Flight 655 by USS Vincennes on the Bandar Abbas-Dubai route. The incident took place in Iranian airspace, over Iran’s territorial waters in the Persian Gulf and on the flight’s usual flight path. Evidence suggests that the United States negligently failed to take all the necessary precautionary steps so as to verify the identity of the plane. The United States never admitted legal responsibility. The case was eventually withdrawn and no judgment was proclaimed on the issue of legal responsibility or otherwise. The United States government did not formally apologize to Iran.33 In 1996, the United States and Iran reached a settlement at the ICJ which included the statement: The United States recognized the aerial incident of 3 July 1988 as a terrible human tragedy and expressed deep regret over the loss of lives caused by the incident.34 As part of the settlement, the United States agreed to pay on an ex gratia basis US$61.8 million, amounting to US$213,103.45 per passenger, in compensation to the families of the Iranian victims. 35 Thus Malaysia could be entitled to bring before the Court any State which is directly responsible for the downing of the MH17 flight or for supplying equipment that led to such an action. 36 Therefore depending on Russian involvement, there could be an international legal case to be made in a forum such as the ICJ about 32

Islamic Republic of Iran v United States of America, International Court of Justice, 9 February 1996 33 Farhang Rajaee, The Iran-Iraq War: The Politics of Aggression (University Press of Florida, Florida 1993) 34 Aerial Incident of 3 July 1988 (Islamic Republic of Iran v. United States of America) – Settlement Agreement 35 --, ‘Iran Airflight 655’ (Wikipedia) <http://en.wikipedia.org/wiki/Iran_Air_Flight_655> accessed 19 November 2014 36 Klinkner (n 13) 39

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Russia’s support for Ukrainian insurgents. Even if Russia were to be implicated, States are not required to submit to the ICJ jurisdiction and in fact neither Russia nor Ukraine has accepted the permanent jurisdiction of the Court. The likelihood that Russia would accept ICJ jurisdiction in the event of a dispute is extremely low. Similarly, by virtue of its permanent membership, any UN Security Council Resolution directly involving Russia in these developments would be vetoed. Furthermore, the extradition of Russian nationals is prohibited by the Russian Constitution and Criminal Code. None of this undermines the need for a complete investigation of the circumstances leading up to the tragic incident. In summing up, there are 13 jurisdictions under which both criminal and civil proceedings might fall. These include the legal systems of all 11 nations where the victims come from, including Malaysia, along with Ukraine and International Law. Since each country has different legal provisions for prosecuting crimes committed against their nationals abroad, the affected countries came together in The Hague so as to discuss the coordination of their separate judicial efforts. Leaders of Western countries have emphasised that both those directly and those that are indirectly involved should be brought to justice. The main matter as to whose blame it is will depend on the outcome of the international investigation authorised by the United Nations. 37 On July 21, 2014, the UN unanimously adopted Resolution 2166 concerning the shoot down of MH17. The resolution expresses support for the ‘efforts to establish a full, thorough and independent international investigation into the incident according to International Civil Aviation guidelines’ and called on all United Nations Member States ‘to provide any requested assistance to civil and criminal investigations’.38 This option may be the best way to ensure justice for the victims. Participants have stressed the need for ‘all parties to grant immediate access by investigators to the crash

--, The Legal Puzzle of MH17 (The Economist, 28th July 2014) < http://www.economist.com/blogs/economist-explains/2014/07/economist-explains20> accessed 29 November 2014 38 UN Resolution 2166 (2014) Adopted by the Security Council at its 7221st meeting, on 21 July 2014 40

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site to determine the cause of the incident’.39 Earlier, the United Nations General Secretary Ban Ki-moon expressed his condolences and said that there was ‘clearly a need for a full and transparent international investigation.40

ICAO Regulations

ICAO Regulations stipulate that, the Court of the country where the crash happened has jurisdiction over the incident, access to the wreckage and would also have the right to lead the investigation. Its consent would usually be essential for other countries to be involved in the enquiry of the shooting down. Authority over the crash site and all in it lies squarely with the country where the incident occurred and not where the aircraft is registered or from where it flew or from where its operations are based. However, for another party to remove material such as flight data or cockpit voice recorders would contravene international agreements. Thus, it is up to Ukraine to appoint an investigator that will pull all other parties together into the investigation. Most investigations of this type are really and truly of an international nature, with the country where the crash occurred having to liaise with other officials and experts from the carrier’s home country. Such was the Lockerbie case, where the investigation was jointly carried out by Scottish authorities and the Federal Bureau of Investigation (FBI). In the Lockerbie case, UN Sanctions were imposed on Libya so as to hand over two Libyan nationals for arrest in relation to the terrorist bombing. So in some cases, other countries play a vital role due to their wealth of resources, technical knowledge or political dimension over the incident.

Security Council, ‘Security Council Press Statement on Malaysian Plane Crash’, (18 July 2014) <http://www.un.org/News/Press/docs/2014/sc11480.doc.htm> accessed 29 November 2014 40 Mergawati Zulfakar, ‘UN Security Council to call for ‘full and transparent investigation’ at emergency meeting’, (The Star, Nation, 18July 2014) <http://www.thestar.com.my/News/Nation/2014/07/18/MH17-crash-United-Nationsto-call-for-investigation> accessed 29 November 2014 39

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Whilst Ukraine is the ‘first port of call’ for any investigation, there is an exceptional circumstance which makes an international response very likely and also reasonable due to the fact that there is an armed conflict going on in the territory where the crash occurred. The international element lies in the fact that the Russians have provided the weapons and there are also victims from a multitude of countries. Moreover, if those responsible have fled to Russia, then Ukraine will be able to ask the Security Council for help in the form of diplomatic allies so as to make pressure if Russia does not cooperate or does not surrender culprits, thus breaching its Treaty provisions and Conventions.41 Ukraine has primary responsibility for investigating the shooting down of the Malaysia Airlines flight MH17 in its territory as per Article 26 of the Convention on Civil Aviation 42 and ICAO Annex 13 relating to Aircraft Accident and Incident Investigation. However there is precedent for a broader international investigation even though it is not yet clear what form this will take. Many international leaders have demanded a multinational investigation as they are scared that the debris of the aircraft and any evidence that is attached to it might be tampered with if the investigation is carried out by a single party. A series of criminal investigations have been jointly started by Ukraine, Australia and Malaysia together with the Dutch prosecutor. In response to an official request from the Ukrainian government for assistance with the official accident investigation into the downing of Malaysia Airlines Flight MH17, the ICAO has sent a team to assist the Ukrainian National Bureau of Incidents and Accidents and Investigation of Civil Aircraft (NBAAII). Figuring out what type of crime the downing of the aircraft might amount to, which Courts have jurisdiction and what kind of evidence needs to be prosecuted is no easy task. The entire world will scrutinize the manner in which the prosecutors will sort through the legal puzzle that is the MH17 incident. Gay Alcorn and Tania Branigan, ‘UN meets as world leaders call for global inquiry into MH17 crash’ (The Guardian, Friday 18 July 2014) <http://www.theguardian.com/world/2014/jul/18/un-meets-as-world-leaders-call-forglobal-inquiry-into-mh17-crash> accessed 29 November 2014 42 Convention on International Civil Aviation (adopted 7 December 1944, entered into force 4 April 1947) 15 UNTS 295 41

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A White House statement called for a ‘full, credible and unimpeded international investigation as quickly as possible’ 43 and said that the role of international organisations such as the United Nations and the Organisation for Security and Cooperation in Europe will be ‘particularly relevant’. In addition, the UN High Commissioner for Human Rights Navi Pillay stated that: Every effort will be made to ensure that anyone committing serious violations of international law including war crimes will be brought to justice, no matter who they are.44 Ms. Pillay’s comments come subsequent to those of Russian Foreign Minister Sergei Lavrov who said that sanctions imposed by the US and EU on Russian officials and companies would not achieve their goal and these would only make Russia more economically independent. However, Lavrov added that there would be no ‘tit-for-tat’ revenge measures to imposed sanctions and expects that an investigation into a downed airliner over eastern Ukraine would be objective and would respect the concept of presumption of innocence. The Dutch Safety Board submitted its MH17 accident investigation Preliminary Report to the ICAO on September 2014, according to the provisions contained in Annex 13 to the ICAO Convention.45 Australia, Malaysia, Russia, Ukraine, UK and USA are all participating in the Netherlands-led MH17 Annex 13 accident investigation through Accredited Representatives. ICAO Council President Dr Olumuyiwa Benard Aliu, stated that ICAO is encouraged to see that the MH17 investigation is proceeding with the productive collaboration of accredited international representatives. ICAO will continue to provide its full support to the Netherlands, in conjunction with its international team, while we await the conclusions Sam Adams, ‘Malaysia Airlines crash: Obama warns Russia to de-escalate crisis in Ukraine following downing of Flight MH17’ <http://www.mirror.co.uk/news/uknews/malaysia-airlines-crash-firm-says-3877234> (The Mirror, 18 July 2014) accessed 29 November 2014 44 Akkoc (n 23) 45 Aircraft Accident and Incident Investigation 43

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and recommendations which will eventually be contained in the accident’s Final Report.46 The MH17 crash marks the fifth Boeing 777 hull loss, the third in just over a year. 47 It is one the deadliest air accidents that has happened in Ukraine and one of the deadliest airliner shoot downs in history.48 The MH17 crash was an astonishing, hard-tobelieve tragedy, but as far as legal concerns go, there is no certain or sufficient answer as yet regarding the culpability of any State or otherwise that would surely guarantee that the perpetrators will be brought to justice, as there is a lack of vital elements that are still to be investigated.49

10. Conclusion

Either individual or State responsibility appear to almost be an impossible mission, at least at present, both for any domestic court or international body. If the Russia-Western world relations ameliorate in the future, maybe then the Russian President will decide to give compensation to the families of the victims, as in the Iran v USA case. But this would only presumably happen ex gratia without any trials in front of the Courts and without any admittance of responsibility from the Russian government’s side. The most likely scenario is that a criminal prosecution is brought by one or more of the affected nations. Prosecutors from the Netherlands, where the majority of the crash’s victims originated ICAO, IATA, ACI, CANSO, ‘Joint Statement on the Risks to Aviation Arising From Conflict Zones’ (29 July 2014) <http://www.icao.int/Newsroom/Pages/JointStatement-on-Risks-to-Civil-Aviation-Arising-from-Conflict-Zones.aspx> accessed 29 November 2014 47 Alberto Riva ‘Malaysia Airlines Flight MH17: Not The First Civilian Jet Shot Down By Missile’ International Business Times (19 July 2014) <http://www.ibtimes.com/malaysia-airlines-flight-mh17-not-first-civilian-jet-shotdown-missile-1631892> accessed 29 November 2014 48 --, ‘Malaysia Airlines Flight MH17: Top 5 deadliest airliner shoot downs’ Reuters (18 July 2014) <http://www.reuters.com/article/2014/07/18/us-ukraine-crisisairplane-history-factb-idUSKBN0FM2VK20140718> accessed 29 November 2014 49 Lachowski (n 11) 46

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from, are in Ukraine making inquiries that could lead to criminal charges being laid against those groups or individuals deemed to be responsible. Anyone suspected of killing a Dutch citizen, even on foreign soil, can be prosecuted by the country’s authorities. Even though there is a war crime offense on the country’s statute books, in such a case, the most likely charges brought would simply be murder since those war crimes require a higher burden of proof that could jeopardize a successful prosecution. The ordinary criminal law would be sufficient.

Rebekah Tanti-Dougall

DISRUPTIVE PASSENGERS ON BOARD AIRCRAFT REBEKAH TANTI-DOUGALL

_______________________________________________________ Dr Rebekah Tanti-Dougall LL.B., LL.M. (IMLI) LL.D. is an Associate at her family’s Law Firm based in Valletta, Malta, ‘Advocates, Tanti-Dougall & Associates’. Rebekah is also a member of the Editorial Advisory Board of Aviation Security International publication, advising on legal issues and the cyber threat.

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Introduction

Safety and security are deemed to be the aviation industry’s top priorities. In this respect, disruptive passengers continue to be a major concern especially when considering that unruly passenger incidents are a challenge for the industry apart from the fact that they pose a serious threat to both safety and security of aircraft. As evidenced through various cases, aggressive and threatening behaviour has unfortunately become more frequent in our society and indeed, the problem of unruly passengers is constantly increasing within the airline industry. Although unruly passengers represent only a minute proportion of passengers as a whole, it must be emphasized that one aggressive passenger has the potential of jeopardising the entire safety on board a flight. Consequently, passengers who manifestly demonstrate such behaviour are deemed to be totally unacceptable.1 In the period between 2007 and 2013, there were over twenty-eight thousand (28,000) reported cases of unruly passenger incidents on board aircrafts. These incidents include violence and harassment against crew members and other passengers, as well as UKFSC ‘Guide To Handling Disruptive Passengers’ <http://www.ukfsc.co.uk/files/Safety%20Briefings%20_%20Presentations/Cabin%20 Safety%20-%20Disruptive%20Passenger%20Guide.pdf> accessed 17 December 2014 1

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failure to follow safety instructions. In fact, the Crown Court in the United Kingdom has held that ‘travelling on a plane places a special duty on passengers to behave in a reasonable and orderly manner’ owing to the fact that one is in a ‘small metal tube high up in the sky and a relatively small incident would have catastrophic consequences’. This was held by Judge Sam Katkuda, when sentencing Ms Janine Cooper, a British national, to three months in jail for hurling drunken abuse at terrified passengers on an Air Malta flight to Heathrow in 2003. Ms Cooper was on her way back from a holiday in Malta with her husband when she became abusive to other passengers. Both Ms Cooper and her husband were immediately arrested upon arrival at Heathrow Airport and besides fined £500, were ordered to pay costs. 2 Disruptive passengers can also cause a great inconvenience for other passengers on board and consequently lead to operational disruption of flights as well as significant costs for airlines. 3 An example is what has been witnessed by Thai AirAsia, where a China-bound flight was forced to return to Bangkok after a woman reportedly threw hot water at a flight attendant. Shortly after flight FD9101 took off from Bangkok for the eastern Chinese city of Nanjing, a male passenger asked a flight attendant for boiling water for his girlfriend’s instant noodles. When told they had to wait for the plane to reach cruising altitude, the young man reportedly dumped food on the aisle, stomped on it and yelled at other passengers who tried to calm him down. He was allegedly still fuming as a flight attendant brought a cup of hot water and charged him $2 for it. As the quarrel dragged on, the man’s girlfriend threw the hot water on the back of a flight attendant. When the couple realized the flight was being turned back, the woman reportedly grew hysterical, hitting windows and threatening to jump off the plane. The plane, carrying one hundred and seventy-four (174) passengers and six (6) crew members, had not even left Thai airspace before it turned around. The captain of the flight decided to return the plane to Bangkok’s secondary airport in view of the Adriane Massa, ‘Women jailed in UK over air rage incident’, Times of Malta (28 October 2003) < http://www.timesofmalta.com/articles/view/20031028/local/womanjailed-in-uk-over-air-rage-incident.137924> accessed 15 December 2014 3 IATA ‘Unruly Passangers’ <http://www.iata.org/policy/Pages/tokyoconvention.aspx> accessed 15 December 2014 2

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woman’s actions, which was deemed endangering to other passengers and impeding in-flight service. Subsequently, the Thai authorities ordered the couple to pay the flight attendant $1,500.4

Definition of Disruptive Passenger

The term unruly or disruptive refers to passengers who fail to respect the rules of conduct on board aircrafts or who fail to follow instructions of crew members; consequently, compromising the safety thereof. The International Civil Aviation Organization has provided a definition of disruptive passenger as a passenger ‘who fails to respect the rules of conduct at an airport or on board an aircraft or to follow the instructions of the airport staff or crew members and thereby disturbs the good order and discipline at an airport or on board the aircraft’.5 Although the definition is indeed subjective, the framework within which one must consider such definition is that such behaviour usually takes place within the confined space of an aircraft at high altitude, where no outside assistance may be resorted to. On one particular flight from Iceland to New York, a male passenger was hitting, screaming and spitting at other passengers. According to Iceland Air’s spokesman such behavior was considered to be unruly and threatening the safety and security on board. As a result, the passenger was restrained by passengers and crew to ensure the safety of those on board and was monitored for his own safety for the duration of the whole flight. The man was arrested after the flight had arrived at John F. Kennedy International Airport in Queens, New York. 6 Therefore, one can assume that such Steven Jiang, ‘Flight diverted after passenger reportedly throws hot water at crew member’ CNN (Beijing, 15 December 2014) <http://edition.cnn.com/2014/12/15/travel/beijing-airasia-hotwatergate/index.html?hpt=hp_c2> accessed 15 December 2014 5 Annex 17 to the Convention on International Civil Aviation 6 Brittany Brady ‘Man restrained after becoming unruly on Iceland to New York flight’ CNN (United Kingdom, 7 January 2013) http://edition.cnn.com/2013/01/04/travel/iceland-disruptive-passenger/ accessed 16 December 2014 4

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definition is indeed subjective to the particular variables at the given time.

Causes of Unruly Behaviour

Disruptive or unruly passengers are often a result of various incidents, that could relate to the consumption of alcohol, the use of prohibited electronic devices, smoking in an aircraft lavatory, drug or medication related incidents, the refusal to comply with safety instructions, verbal or physical confrontation with crew members or other passengers, sexual abuse or harassment, and other type of riotous behavior including screaming, annoying behaviour, kicking and banging heads on seat backs and tray tables. An interesting case concerning disruptive behaviour involved a woman carrying a big brown pig on board the plane. She was allowed to bring the pig on board as an ‘emotional support animal’ under the Department of Transportation guidelines. However, according to fellow passengers, the pig was not a tiny pig, but rather a heavy one that stank up the cabin of the tiny D.C.-bound aircraft and defecated in the aisle. Although in 2003, the Department of Transportation updated its policy7 regarding animals in air transportation stating that animals which assist persons with disabilities by providing emotional support, qualify as service animals, it is up to airline personnel to determine whether an animal is to be so considered as a service animal and they can do so by seeking credible verbal assurances through supporting documentation from a mental health professional. However, in this case, since the animal itself was the cause of the disruption, the passenger and her pig were escorted off the aircraft for being disruptive, before the plane even took off. 8 Federal Aviation Administration Department Of Transportation, ‘Federal Register Rules and Regulations’ Vol. 68, No. 90 <http://airconsumer.dot.gov/rules/20030509.pdf> accessed 16 December 2014 8 Emanuella Grinberg ‘Airline: ‘Emotional support’ pig kicked off flight for being disruptive’ CNN (United Kingdom, 2 December 2014) <http://edition.cnn.com/2014/11/30/travel/emotional-support-pig-booted-flight/> accessed 17 December 2014 7

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Consequences of Disruptive Behaviour

Incidents of disruptive passengers are occurring regularly and are affecting all airlines. The consequences of unruly behaviour include brawls amongst passengers in a state of drunkenness as well as aggressive manifestations towards members of the crew. As a result, cabin crew can become distracted from their duties. However, far more serious consequences may ensue, such as an aircraft being diverted as a result of an unruly passenger, creating additional safety risks for the aircraft itself, the passengers and its crew members on board. Furthermore, since such circumstances would require unscheduled landings, such diversions are indeed very costly for airlines. These include proceedings which could be brought against the airline by other passengers who would have gone through a trauma as well as those passengers suing for delays resulting from said necessary diversions. Moreover, the negative publicity for airlines associated therewith is indeed an additional consequence that an airline would have to suffer. In the case Principal Officer of Immigration vs Francesco Andrisani,9 the defendant falsely claimed to the cabin crew that there was a bomb on board and shortly afterwards claimed that his story was not real and was meant to be a joke. As a result, Flight KM612 to Rome had to turn back after taxiing and was delayed by an hour as a direct consequence of the so called ‘joke’. Mr Andrisani was ordered off the plane by the captain and handed over to security personnel at the Malta International Airport. He was immediately arraigned before the Court of Magistrates (Malta), which evidenced that AirMalta plc has zero tolerance for such behavior. The so called ‘joke’ was deemed to be a serious threat against the security of the aircraft and he was fined €1,165 and ordered to leave the country. Both AirMalta and Alitalia blacklisted him. Mr Andrisani was further found guilty of harassing crew members and potentially endangering the life of other passengers on board the flight, of failing to comply with directives given to him as

Court of Magistrates (Malta), 23 July 2001 51

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well as of claiming that a terrorist act was to take place when he knew that it was false. In another case, a Los Angeles-bound Virgin America Inc flight was diverted to Omaha after a passenger became disruptive and had to be restrained. Passengers reported that the disruptive passenger tried to open the aircraft door during the flight from Boston. As a result thereof, the Airbus A-319 had to make an emergency landing at Eppley Airfield. 10 Another interesting case concerns the use of the word ‘bomb’ at the airport.11 Ms Rosalinda Baez arrived at John F. Kennedy International Airport for a flight to Austin, Texas. The ticketing agent did not inform Ms Baez at check-in that the departure gate was located in a separate terminal, and as a result, Ms Baez arrived at the gate a mere ten minutes prior to the scheduled departure. As Ms Baez approached the gate, a JetBlue ticketing agent informed Ms Baez that she had just closed the plane door and therefore could not allow her to board the aircraft. Ms Baez was upset with this turn of events and asked about her checked luggage, which was already on the plane. She was informed that her bag would remain on the plane and would be waiting for her in Texas. Ms Baez then referred to such action as being a security risk, implying the consequences thereof if there was a bomb in her luggage. The Transportation Security Administration (herein referred as the ‘TSA’) in conjunction with JetBlue decided to reroute the airplane, which had already taken off, to land in Richmond, Virginia, rather than Austin. Upon landing, police officers searched all of the plane’s passengers and their luggage, and did not find a bomb. TSA detained Ms Baez and immediately passed custody of Ms Baez to the Federal Bureau of Investigation (herein referred as the ‘FBI’). The FBI agents arrested her and charged her with making a bomb threat. The government did not pursue this Thomson Reuters News Agency ‘Virgin America Flight Diverted To Omaha After Passenger ‘became Disruptive’’ Business Insider Inc. (New York, 23 September 2014) <http://www.businessinsider.com/r-virgin-america-flight-diverted-to-omahaafter-passenger-became-disruptive-2014-9> accessed 16 December 2014 11 Thomas A Dickerson, ‘Travel Law: Don’t Ever Use the Words ‘Bomb’ or ‘Gun’ on or near Commercial Aircraft’ (17 July 2014) < http://www.nycourts.gov/courts/9jd/TacCert_pdfs/Dickerson_Docs/ETNARTICLE29 .pdf> accessed 16 December 2014 10

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charge to judgment; instead, the case was dismissed as part of a plea agreement in which Ms Baez pled guilty to a drug crime of having marijuana in her checked luggage. On her plea, she was sentenced to three years probation and required to pay JetBlue $13,448 in restitution for costs relating to the original flight’s re-routing. The Court emphasised that the restitution to be paid was a consequence of the offence relating to the bomb threat made by the accused as opposed to the misdemeanor, relating to the drug charges for which she had been convicted.12 Furthermore, in a separate case, Mr Peter Aldred was sentenced to two months imprisonment for having made a joke about a bomb being in his bag to an EasyJet flight attendant. He had been seated in an emergency exit row and was asked to stow his bag in an overhead. When he refused, he was asked what was carried in the bag and he simply replied ‘a bomb’. This prompted a full-scale security alert in which police negotiators, three ambulances and a fire crew were dispatched.13 A similar case is that of Office of Immigration vs Tsupryk Uleg et,14 where nine water polo players from Moldova and Ukraine had won the water polo championship league in Malta the day before. They were going back home on an Air Malta flight KM 520 to Budapest and apparently wanted to celebrate their victory. When on board the plane, they drank alcohol purchased from the duty free shop and got drunk on board the aircraft. As a result thereof, they refused to obey instructions of the cabin crew and one of the players even attempted to open the door leading to the cockpit. They refused to cooperate and caused panic on board. Although the AirMalta flight was flying out to Budapest, the captain decided that for the safety of the other passengers, the crew and the aircraft, it were better that the aircraft be diverted to Rome. The captain even requested the Italian authorities to allow his aircraft priority landing. Costs were further increased since members of the Malta Police were flown out from Malta to Rome on a special flight in 12

Rosalinda Baez, Plaintiff v. JetBlue Airways and Tiffany Malabet, No. 09-CV-596 (NGG)(SMG), United States District Court, E.D. New York. October 15, 2010 13 21 February 2006 14 Court of Magistrates (Malta), 11 September 2000 53

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order to escort the nine disruptive passengers back to Malta to be arraigned and charged before the Court of Magistrates (Malta) on charges of unruly behaviour. The case was heard with urgency over two days owing to the particular circumstances, showing that the Courts in Malta do not take such cases lightly. The Court delivered judgment against all nine water polo players, finding them guilty since they had acted in a manner likely to endanger the aircraft or its passengers and crew on AirMalta flight. They were fined €1,200 each. The Court held that in view of the accusations, the seriousness of the crime was not reflected in the punishment; these types of accusations concern more than just the security of the aircraft and the safety of passengers. The court continued to argue that due to the crime occuring in the restricted and confined space of the aircraft, there must be good order, tranquility and respect towards the captain, the cabin crew and towards the passengers. This case may be deemed as a landmark case within the Maltese legal aviation framework since it has established that there is certainly zero tolerance with regard to unruly behaviour on board an aircraft, as advocated by other international jurisdictions.

Legislation on Disruptive Passengers

The aviation industry has two international instruments relating to offences that occur on board aircraft. The first is the International Civil Aviation Organization (herein referred as the ‘ICAO’) Convention on Offences and Certain Other Acts Committed on Board Aircraft, signed at Tokyo on 14 September 1963, commonly referred to as The Tokyo Convention. This Convention governs offences and other acts that occur on board aircraft in flight. Although this Convention has served the industry well, there are various lacunae present therein; as a result, a Diplomatic Conference was held between 26 March and 4 April 2014 to consider proposed revisions thereto to ensure the efficacy thereof in the prevention of unruly behaviour on board aircraft.15 15

Convention of Offences and certain other Acts Committed on Board Aircraft (The Tokyo Convention 1963) 54

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The result of the Diplomatic Conference was The Montreal Protocol, of the 4 April 2014; which not only makes important changes to the original Tokyo Convention but also provides an effective framework to ensure that unacceptable disruptive behaviour is prevented.16 The Montreal Protocol was necessary due to the desire to curb unruly behaviour and restore good order and discipline on board aircraft after stakeholders in the industry and States voiced their concern to the escalation of the severity and frequency of incidents involving disruptive and unruly passengers on scheduled commercial flights that may jeopardize the safety of the aircraft or of persons or property therein or jeopardise good order and discipline on board.17 The Montreal Protocol has indeed been deemed a landmark contribution in assuring the security of passengers and crew worldwide.18 5.1 Definition of disruptive passengers re-defined The Tokyo Convention was instrumental in defining offences that now encompass, among others, what we term unruly passenger behavior and it applies in respect of ‘acts which, whether or not they are offences against the penal law of a State, may or do jeopardise the safety of the aircraft or of persons or property therein or which jeopardise good order and discipline on board’.19 This broad terminology allows for various acts to fall under the remit of the Tokyo Convention. It also permits an act which is not classified as an offence in a particular jurisdiction, to be possibly criminalized on the basis of whether such act jeopardizes the safety of the aircraft or of persons or property. Furthermore, the term ‘may’ allows for 16

ibid Cooper Grace Ward ‘Protocol to amend the Tokyo Convention 1963’ <http://www.cgw.com.au/publication/protocol-to-amend-the-tokyo-convention1963/> accessed 18 December 2014 18 Raymond Benjamin, ‘ICAO Diplomatic Conference Delivers New Protocol Addressing Disruptive Passengers’ (International Civil Aviation Organization – ICAO) <http://www.icao.int/Newsroom/Pages/ICAO-Diplomatic-Conferencedelivers-new-Protocol-addressing-disruptive-passengers.aspx> accessed 16 December 2014 19 Convention of Offences and certain other Acts Committed on Board Aircraft, Article 1(1) 17

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discretion that permits an even broader applicability thereof. The Tokyo Convention is limited because it only applies to acts or offences, which occur while the aircraft is in flight, and is primarily aimed at ensuring the safety, good order and discipline on board the aircraft. As a result, the Montreal Protocol seeks not only to provide greater clarity to the above-referred to definition of unruly behavior, by including the threat of physical assault or a threat to commit such assault against a crew member, or refusal to follow safety-related instructions,20 but it also extends the definition of ‘in flight’. In fact, whereas the Tokyo Convention, specifically in Article 1(3), states that an aircraft is considered to be in flight from the moment when power is applied for the purpose of take-off until the moment when the landing run ends, the Montreal Protocol extends the parameters thereof by replacing the said article and states that an aircraft is considered to be in flight at any time from the moment when all its external doors are closed following embarkation until the moment when any such door is opened for disembarkation; whereas in the case of a forced landing, the flight shall be deemed to continue until the competent authorities take over the responsibility for the aircraft and for persons and property on board.21 Therefore, such expansion of the definition of ‘disruptive behaviour’ as well as of the term ‘in flight’ provides a broader framework within which a disruptive passenger on board an aircraft may be prosecuted on the basis of the Montreal Protocol. 5.2 Jurisdiction The Tokyo Convention establishes that the State of Registration of the aircraft is competent to exercise jurisdiction over offences and acts committed on board.22 However, the amendments brought about by the Montreal Protocol extend jurisdiction over

Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation (the Montreal Protocol), Article X 21 ibid, article II 22 Convention of Offences and certain other Acts Committed on Board Aircraft, Article 3 56

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offences and acts committed on board an aircraft to the State of Landing and to the State of the Operator.23 The concept of extending jurisdiction to the State of the Landing refers to circumstances when the aircraft on board which the offence or unlawful act is committed, has its last point of takeoff or next point of intended landing within its territory, and lands there with the alleged offender still on board, provided that the safety of the aircraft or of persons or property therein, or the good order and discipline on board, is jeopardized. On the other hand, the scope of the Montreal Protocol to extend jurisdiction to the State of the Operator refers to instances where the offence or act is committed on board an aircraft leased without crew to a lessee whose principal place of business or, whose permanent residence, is in that State.24 These amendments relating to jurisdiction provide a remedy for the lacunae that were present in the Tokyo Convention which permitted many serious offences to escape the legal remit of the said Convention, and therefore, avoiding legal action against the alleged offender as a consequence. An instance which illustrates what is being discussed is evident in the above mentioned case of Office of Immigration versus Tsupryk Uleg et25 when the captain had decided that for the safety and security of the other passengers, the crew and the aircraft, it were better that he diverted the aircraft to Rome. According to international aviation rules at that time, an aircraft is deemed to be subject to the jurisdiction of the State of its registration. In this case, the State of registration was Malta. As a result, members of the Malta Police were flown out from Malta to Rome in order to escort the nine disruptive passengers back to Malta to be arraigned and

State of Landing is when the aircraft on board which the offence is committed has its last point of take-off or next point of intended landing within its territory, and the aircraft subsequently lands in its territory with the alleged offender still on board. State of the Operator is when the offence is committed on board an aircraft leased without crew to a lessee whose principal place of business or, if the lessee has no such place of business, whose permanent residence, is in that State. 24 Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation, Article IV 25 The Court of Magistrates (Malta), 13 September 2000 57

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charged before the Court of Magistrates (Malta) for unruly behaviour. 5.3 Immunity from claims When proceedings are brought against an airline, such may be brought either by an aggrieved passenger, or by a disruptive passenger who claims unlawful restraint. In such circumstances, both the Tokyo Convention and the Montreal Protocol provide for the legal protection of the aircraft commander, the crew members, as well as other passengers who would have assisted in restraining the alleged offender. This is due to the fact that the Tokyo Convention 26 conveys certain powers to the aircraft commander or captain. If the commander of an aircraft has ‘reasonable grounds’ to believe that a person has committed, or is about to commit, on board the aircraft, an offence and as a result, the safety and security of the flight or of passengers aboard the flight may be deemed jeopardized by the actions of an alleged offender, the aircraft commander may impose upon such person reasonable measures, including physical restraint, to protect the safety of the aircraft, of persons and property therein, maintain good order and discipline on board and deliver such a passenger to competent authorities or disembark the passenger. 27 To this effect, the Tokyo Convention stipulates that the commander becomes in charge once the aircraft is ‘in flight’. ‘In flight’ means ‘the moment when all external doors are closed following embarkation until the moment any such door is opened for disembarkation’. This provides the aircraft commander with greater authority to exercise the necessary power, and at the same time, offering a wider parameter within which he may be protected due to the broadening of the definition given to the term ‘in flight’. The aircraft commander may require or authorize the assistance of other 26

Convention of Offences and certain other Acts Committed on Board Aircraft, Article 6 27 Article 8 of the Tokyo Convention stipulates that the aircraft commander may, in so far as it is necessary, disembark in the territory of any State in which the aircraft lands, any person who he has reasonable grounds to believe has committed, or is about to commit, on board the aircraft, an act contemplated in the Convention. He shall report to the authorities of the State in which he disembarks any person and the reasons for such disembarkation. 58

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crew members and may request the assistance of in-flight security officers or other passengers to restrain any person whom he deems necessary to restrain. However, crew members and passengers are separately authorized under of the Tokyo Convention to take reasonable preventive measures without any authorization from the aircraft commander whenever they have reasonable grounds to believe that such action is immediately necessary to protect the safety of the aircraft or of persons or property therein. 28 The Tokyo Convention grants such immunity from subsequent legal proceedings for actions taken against an alleged offender, stating that ‘neither the aircraft commander, any other member of the crew, any passenger, the owner or the operator of the aircraft, nor the person on whose behalf the flight was performed shall be held responsible in any proceeding on account of the treatment undergone by the person against whom the actions were taken’.29 Although it may be said that in this regard, the Tokyo Convention offers a significant amount of protection to airlines, the Montreal Protocol goes a step further and provides two new aspects thereto. The first is that such protection quoted above is now extended to the in-flight security officer, if any, on board, by means of the Montreal Protocol.30 Therefore, the in-flight security officer shall not be held responsible in any proceedings on account of the treatment undergone by the person against whom the restraint was taken. The second amendments concern new provisions to deal with the recovery of significant costs arising from unruly behaviour, 31 stating that nothing in the Tokyo Convention shall preclude States from any right to seek the recovery, under national law, of damages incurred, from a person so disembarked or delivered. Evidence of such powers of the aircraft commander and of the crew may be further appreciated in the case Levy vs American

Convention of Offences and certain other Acts Committed on Board Aircraft, Article 6 (2) 29 ibid, Article 10 30 Article IX of the Montreal Protocol amends Article 10 of the Tokyo Convention to include in-flight security officer 31 Article XIII of the Montreal Protocol introduces Article 18bis to the Tokyo Convention 59

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Airlines,32 where the plaintiff was a criminal who was being extradited from Egypt to the United States via Munich. While on board the plane, he tried to slash his wrists and further engaged in a fist fight with the law enforcement officers who were accompanying him. The officers restrained and gagged him and even sought the assistance of a medical to administer a sedative. Subsequently, he sued the air carrier for battery and false imprisonment. In this case, the Court held that the plaintiff`s claims were barred by the Tokyo Convention, since the actions taken on board to restrain plaintiff were deemed reasonable. Therefore, the aircraft commander, the crew members, the passengers and in-flight security officers are given immunity from law suits filed by the alleged offender against whom they would have acted. Such protection was given in order to encourage whosoever to curtail any wrongful acts in the interest of safety and security when confined to the limited space on board the aircraft.

Conclusion: Unruly Passenger Prevention and Management

The aviation industry is doing its best to prevent disruptive behaviour. Besides the new Montreal Protocol, which will provide an effective deterrent for unruly behaviour, International Air Transport Association (herein referred as the ‘IATA’) has published its First Edition of the Guidance on Unruly Passenger Prevention and Management, developed for the purpose of supporting IATA Member airlines to prevent, identify, defuse and manage unruly passenger behaviour. This publication is designed to help safety officers, training instructors and airline security managers to evaluate safety and security risks, develop a zero tolerance for unruly passenger policy, develop unruly passenger prevention and management procedures as well as to develop strategies to prevent unruly passenger incidents and the resulting impacts. 33 This should lead to safer and a more pleasant air travel experience for all. 32

March 1994 Guidance on Unruly Passenger Prevention and Management, IATA Unruly Passenger Prevention and Management (1st edn, December 2012) 33

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In conlusion, it must be emphasised that the starting point of air safety and security commence should be from the ground; therefore, security standard operating procedures (herein referred as the ‘SOPs’) must prevent the boarding of potentially unruly passengers since it is the first line of prevention. Moreover, airlines must encourage ground employees to detect and report unruly passenger behaviour at check-in, in lounges and at boarding gates in order to apply a zero tolerance thereof, especially when considering the safety and security threat posed by a disruptive passenger. ‘Any 34 passenger who poses any threat should not be treated lightly’.

<http://www.iata.org/publications/Documents/guidance-unruly-passengerprevention-and-management.pdf> accessed 17 December 2014 34 Statement made by the author at the 2nd International Conference on Disruptive Airline Passenger Behaviour held in London between the 10th-11th June 2014; as reported by the United Kingdom Independent of 10 June 2014 <http://www.independent.co.uk/travel/news-and-advice/aviation-communitydemands-action-on-alcohol-to-combat-increase-in-air-rage-9524252.html> accessed 12 December 2014 61

CHILD LAW

Reporting of Child Abuse – Should it be Mandatory for Professionals? Daniela Azzopardi Bonanno

Daniela Azzopardi Bonanno

REPORTING OF CHILD ABUSE FOR PROFESSIONALS?

– SHOULD IT BE MANDATORY

DANIELA AZZOPARDI BONANNO

_______________________________________________________ Dr Daniela Azzopardi Bonanno completed the law course at the University of Malta in 2014, summa cum laudae. She is currently working as a lawyer in private practice. Dr Azzopardi Bonanno has a deep interest in family law and child law. Her doctoral thesis, entitled ’Mandatory Reporting: What are the implications of making reporting child abuse mandatory?’ received the Professor David J Attard Best Doctor of Laws Thesis Award in 2014 and has been incisively reported in the media. Although Dr Azzopardi Bonanno is passionate about family law and child law, she has a growing interest in human rights and is keen to expand her field of work and knowledge. Dr Azzopardi Bonanno is also a co-founder and an executive team member of the recently set up NGO ‘Gender Liberation’ which advocates for and supports people within the trans* gender variant and intersex continuum and their relatives. ____________________________________________________________________

Introduction

In 2006, the World Health Organization (WHO) held that approximately 40 million children around the world under the age of 14 are victims of child abuse or neglect every year. 1 When insufficient or inadequate care and protection is given to these children by their caregivers, or when the caregiver is the perpetrator of abuse or neglect, it becomes the responsibility of the State under the Convention on the Rights of the Child (CRC) to provide special care and protection to these children. In order for the state to intervene and protect such a child, someone has to bring the situation to the attention of the authorities. Ideally, every citizen should feel responsible to safeguard and protect the most vulnerable in society. However, individuals in K Svevo-Cianci, S Hart and C Rubinson, ‘Protecting children from violence and maltreatment: a qualitative comparative analysis assessing the implementation of U.N. CRC Article 19’ [2010] Child Abuse & Neglect 34, 53 1

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society have no legal obligation to make a report to the Executive Police or to the Child Protection Services (herein referred as the ‘CPS’) when they have knowledge or a founded suspicion that a child they know is being maltreated in some way or another. These individuals make a moral choice whether to bring the situation to the attention of the authorities, and protect that vulnerable child or whether to remain inactive and passive. In contrast to this, legislation may put a legal obligation on certain individuals, most often professionals working in contact with children, to report any knowledge or belief of child abuse and neglect. Therefore, mandatory reporting refers to the legal obligation that is found in many legal systems whereby mandated reporters have a legal duty to report child abuse and neglect, often against a penalty in cases of default. The concept of mandatory reporting is supported by many professionals working in the best interests of children as well as by academics. Mandatory reporting came to the forefront in America in 1962 with the publication of an academic paper on the ‘Battered Child Syndrome’. This paper aroused such interest and debate that the federal government funded a conference on the subject that same year, from which emerged the Child Abuse Prevention Movement. Professionals at this conference suggested that laws should be introduced to push professionals themselves to report, given that child abuse was then recognised as a public quandary. Within five years all the states of America had introduced mandatory reporting in their respective legal systems. However, the introduction of the 1974 Child Abuse Prevention and Treatment Act (herein referred as ‘CAPTA’) obliged each state to specifically list who such mandated reporters were under its legislation, what immunity they enjoyed, what penalties they would incur for not fulfilling their obligation, and to provide for confidentiality of records. Furthermore, it established the National Centre on Child Abuse and Neglect, which provided for the appointment of a guardian ad litem for child victims of abuse and neglect. Although, nowadays, all the states in America provide for mandatory reporting, there is great variation between the legal systems. In 2007, it was estimated that out of 82 million children in the US, 3.5 million were reported as victims of

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maltreatment and had their situation assessed.2 School teachers, police officers, and social workers lodged the most reports. Since mandatory reporting emerged as an obligation to report physical abuse from the awareness created by the Battered Child Syndrome, this meant that the initial focus was on physicians and medical personnel treating physical injuries. Soon afterwards the obligation was extended to other professionals that work closely with children. Nowadays, all states have listed medical professionals, teachers, day care carers, social workers, counsellors, and the Police as mandated reporters. Exceptions found in all states are advocates and priests when child abuse is disclosed to them under the sacrament of penance. Moreover, Kentucky, Mississippi, Wyoming, New Jersey, and North Carolina have a general obligation for every individual with knowledge of child maltreatment to report it. If a mandated reporter fails to fulfil the obligation to report, that mandated reporter would be guilty of a misdemeanour (equivalent to a contravention under Maltese law) and the penalty could be both a fine (which ranges between $25 to $5,000 according to State law) and/or a prison term (ranging between 10 days to one year). Moreover, many state laws allow for the victims of abuse to sue professionals for damages for not having protected them. This concept emerged in the landmark 1976 case of Landeros vs Flood.3 In ‘Children 2010’,4 a report published by the National Statistics Office (NSO) Malta in 2010, it was reported that 36% of the reports received by Aġenzija Appoġġ between 1993-2002 concerned physical abuse, 20% of reports concerned child neglect, whereas 18% concerned child sexual abuse. Abuse by the parents was established to be the most frequent. However, these statistics are not reflected in court actions. Although child sexual abuse accounts for the least number of investigations, in relation to court actions they account for the majority of actions. This means that the J Duerr Berrick, ‘Trends and Issues in the U.S. Child Welfare System’ in N Gilbert, N Parton and M Skivenes (eds), Child Protection Systems International Trends and Orientations (1st, Oxford University Press, USA 2011) 18 3 Landeros v Flood, 17 Cal. 3d 399, 551 P. 2d 389, 131 Cal. Rprt. 69 (1976) 4 NSO ‘Publications by Date’ (NSO) <http://nso.gov.mt/en/publicatons/Pages/Publications-by-Date.aspx> accessed 23 February 2015 2

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perpetrators of the more common child abuse, that is physical abuse and neglect, are not always prosecuted. This goes to show that it is an incorrect assumption that once a report is lodged with CPS, the perpetrators support will be refused for prosecution.

The Local Situation

When cases of child abuse are reported, two forms of Court proceedings may follow: those that fall under Civil Law are heard by a Chamber of the Court in its civil jurisdiction and those that fall under Criminal Law are filed by the Police under the Criminal Code. Civil proceedings may lead to the termination of parental authority as laid down in Article 154(1) of the Civil Code due to (i) the parent having exceeded the bounds of reasonable chastisement or having ill-treated or neglected the child; or (ii) the parent having failed to look after, maintain, instruct and educate the child. 5 The Civil Code specifies the duties of the parents in regard to the care of their children and then provides what can be done when the parents fail to fulfil these duties. However, there is nothing specified about the in-between process, that is how it is determined if the parents are fulfilling their duties and if there is a situation of child abuse or neglect, or how such a case is to be brought to the attention of the Court. This lacuna in the law results in a difficulty in allocating responsibility for delayed intervention or for no intervention in a situation of child abuse or neglect. On the other hand, articles 204C and 204D of the Criminal Code consider it a crime to take part in sexual activities with a minor and to compel, cause, or attend a pornographic performance involving a minor respectively; thus criminalising any form of child sexual abuse. It is an aggravating circumstance when the perpetrator has a ‘recognised position of trust’. Moreover, article 339(1)(h) of the Criminal Code introduced on 14 February 2014 by means of Act III of 2014 states:

Civil Code, Chapter 16 of the Laws of Malta, article 3B 68

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Every person is guilty of a contravention against the person who – (h) being authorized to correct any other person, exceeds the bounds of moderation: Provided that, for the avoidance of any doubt, corporal punishment of any kind shall always be deemed to exceed the bounds of moderation. Due to the fact that the corresponding provision under the Civil Code has not been amended,6 the introduction of this contravention creates a potential conflict between the laws. The Civil Code allows ‘reasonable chastisement’ whereas in terms of the Criminal Code any form of corporal punishment, even that classified as reasonable under the Civil Code, is deemed to exceed ‘the bounds of moderation’ and becomes a contravention. Article 247A is the principal provision in the Criminal Code criminalising child abuse and neglect: (1) Whosoever, having the responsibility of any child under twelve years of age, by means of persistent acts of commission or omission ill-treats the child or causes or allows the ill-treatment by similar means of the child shall, unless the fact constitutes a more serious offence under any other provision of this Code, be liable on conviction to imprisonment for a term not exceeding two years. (2) For the purposes of subarticle (1), ill-treatment includes neglecting the child’s need for adequate nutrition, clothing, shelter, and protection from harm, persistently offending the child’s dignity and selfesteem in a serious manner and persistently imposing upon the child age-inappropriate tasks or hard physical labour. (3) The provisions of article 197(4) shall also apply in the case of an offence under this article, when the offence is committed by any ascendant or tutor. This provision criminalises neglect, physical and emotional 6

ibid, article 154(1)(a) 69

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abuse of a child. However, it is extremely disappointing that this protection is offered only to children under the age of twelve. The United Nations Convention on the Rights of the Child (CRC) defines a child as ‘every human being below the age of eighteen years’. If a parent for some reason or another becomes violent towards a child who is older than twelve years, it is not a crime covered by section 247A. This is definitely discriminatory and unreasonable. Most key professionals7 in child protection rely on article 2 of Subsidiary Legislation 440.04 entitled ‘Processing of Personal Data (Protection of Minors) Regulations’, which states: (1) Where any information is derived by any teacher, member of a school administration, or any other person acting in loco parentis or in a professional capacity in relation to a minor, such information may be processed by any of the aforesaid persons if such processing is in the best interest of the minor. (2) Where personal data is being processed as aforesaid, the consent by the parents or other legal guardian of the minor shall not be required if this may be prejudicial to the best interest of the minor. (3) In such a case, no parent or other legal guardian of the minor shall have access to any personal data held in relation to such minor. Despite the existence of this provision, the sharing of information by professionals is still discretionary. CPS relies on the individual professional’s cooperation, in some cases getting the information required for their investigation, whereas some professionals would be more concerned with keeping a good clientprofessional relationship and thus share no information about their client. Lastly, in regard to legislation, it is crucial to look at the Child Protection (Out of Home Care) Bill currently at second reading stage in Parliament, whereby it is being proposed that 7

Including social workers in CPS, doctors, and professionals working with the parents as was established from the interviews held by the author as part of her LL.D thesis data collection. 70

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mandatory reporting is introduced for professionals in contact with children, whether in their paid work or when doing voluntary work. Mandatory reporting should be carried out immediately to CPS. When professionals refer a situation of child abuse or neglect to any other entity, that entity is to refer the report to CPS such that all avenues lead all reports to CPS. It is being proposed that CPS should have a register whereby all reports would be registered and this is to be referred to as the Child Protection Register. In absence of the law, professionals from different sectors have compiled and put into practice sets of policies and procedures. The most structured and inclusive is the ‘Child Protection Procedures for Schools’8 compiled by the Directorate for Educational Services in 1999 and currently being revised. This document contains what procedures the school should undertake when it is known that a student is a child victim of abuse or neglect, as well as giving an extensive description of the symptoms of each kind of abuse. The 1999 Procedures impose as an obligation on staff in schools to ‘refer suspected or actual child abuse cases to the appropriate services and through the proper channels’. Although the Head of School retains the ultimate responsibility, each school can designate a senior member of staff for child protection matters, unless the Head of School performs such role as well. This member of staff acts as a reference point for other teachers that are the first contact with a child victim, to discuss the situation and decide what best to do. These procedures make it clear that disciplinary action can be taken by the Directorate for Educational Services against a member of staff that ignored a serious situation of abuse. 9 To avoid such circumstance, it encourages members of staff to refer to the designated member of staff and if necessary, the latter is encouraged to contact the CPS within the Foundation for Social Welfare Services for advice. Education Division, ‘Child Protection Procedures for Schools’ (Education, 1999) <http://education.gov.mt/en/resources/documents/policy%20documents/child_protect ion.pdf > accessed 23 February 2015 9 ibid 14; Neglecting serious cases of abuse means neglecting one’s professional duties. Thus, it is imperative that educators take the appropriate action, when there is a strong probability of abuse. Disciplinary action by the Education Division may be taken against a member of staff who does not pass on information about a known case of child abuse. 8

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Though these Procedures are very detailed and extensive, they do not bind or emphasise the importance of reporting a situation of abuse or neglect or suspicions thereof without delay or within a short time frame. In fact, a representative from CPS, interviewed by the author, made this point in saying that there have been situations where a school was aware of a child’s situation but then the school only made the referral before the summer break. This delayed matters and delayed intervention by CPS and yet one cannot be held accountable for malpractice as nothing is said about timing and the resulting impact on the child. In 1999 another set of policies and procedures were written by the Church authorities in Malta and Gozo: the ‘On Cases of Sexual Abuse in Pastoral Activity: Statement of Policy & Procedures in Cases of Sexual Abuse’. While these Policies and Procedures are very structured and detailed, it is disappointing to see that they only target sexual abuse. With members of the clergy and members in pastoral activity being in close contact with children, one should consider expanding the responsibility to include all forms of abuse. This document sets out the guiding principles from the start that is that the welfare and best interests of the child is the primary consideration in any procedures that are upheld. Anyone with knowledge of child sexual abuse by a pastoral functionary10 is strongly encouraged to reveal the information outside the Sacramental forum. Moreover, the Policy reserves the right of canonical or civil action against a person that makes false accusations. It is interesting to see that the Policy includes a provision specifically on mandatory reporting: It shall be incumbent on all those institutions which fall under this policy to report immediately to the delegate all cases of child sexual abuse which happen within their domain.

In the Policy, pastoral functionary is defined as follows: This document deals with sexual abuse by a ‘pastoral functionary’. This term refers to clergy (bishops, priests, deacons), consecrated persons and members of societies of apostolic life. It also refers to adult lay people, duly appointed or commissioned to work in the areas of pastoral activity, including catechesis and teaching, spiritual care and guidance. For the purpose of this policy, this term includes also those employees or volunteers engaged in all sorts of activities within Church institutions. 72

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Therefore institutions are obliged to report whereas individuals are ‘strongly encouraged’ to disclose any information of child sexual abuse. It is mandatory for people in the Church and not on the victim to report any case of abuse as soon as they become cognisant of it. All pastoral functionaries, including the Bishop, are mandated to act upon the knowledge of a situation of abuse. Although this Policy and Procedures are currently being reviewed, the same parameters will be kept. Nowadays, reporting of child abuse and neglect to CPS takes place either by means of a phone-in through the landline 179 run by volunteers, or through an intake session done during office hours with a social worker, or by a professional that sends in a referral form. Every referral is catalogued and scored according to initial risk. This assessment done by the leader of the CPS is subjective, as there are no objective criteria laid down determining how to score the initial risk. If a referral is classified as needing investigation, it is passed on to a social worker from CPS who initiates the investigation depending on the information the reporter has given. It is important to note that CPS also accepts anonymous reports with most of these reporters remaining anonymous due to fear of the perpetrators of the abuse finding out who reported them. The staff at Aġenzija Appoġġ tries to inform the person making the report that they protect the identity of the reporter by not informing the perpetrator of the source of the information. If CPS knows who the person making the report of child abuse is, they can follow the case by getting back to this person for more information or clarifications that may be needed. Therefore, CPS encourages such people to disclose their identity under confidentiality but will still take the report if the person keeps insisting on anonymity. American state law also provides for anonymous reporting; however, it is noted that reporters that give their identity to the child welfare agency are taken as more credible and are taken up by CPS workers faster than ones from anonymous reports. 11 Moreover, mandatory reporting by professionals, particularly in states where the professional can be sued, has reduced the number of anonymous reports. Once a report is lodged with the agency there is an official 11

M L McCoy & S M Keen, Child Abuse and Neglect (1st, Psychology Press, USA 2009) 34 73

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record that the mandated reporter fulfilled the statutory duty. Most state laws provide that mandated reporters are obliged to report a situation of child maltreatment when the professional has ‘reasonable cause’. The legal definitions of maltreatment and ‘reasonable cause’ vary between the states’ laws.12 McCoy and Keen report that lack of certainty by the professionals regarding when the obligation to report arises results in the professionals reporting even the slightest suspicions; however, ‘The law requires that you report suspicion, and leaves the determination of abuse to CPS’.13 Aware that this produced an influx of reports, more than twenty states followed the system adopted by Missouri in 1995. In this system professionals had to refer suspicions or minor cases of maltreatment for ‘assessment’, while serious and harmful situations were to be reported to CPS for ‘investigation’. Missouri witnessed a decrease in the number of reports as well as an increase in the substantiation rate to the reports lodged following this system. In fact Berrick writes ‘The large majority of children reported for maltreatment either receive no services (because their report is screened out at the hotline) or voluntary preventive services.’14 When the situation merits an assessment, social workers examine the needs of the family and try to offer support in a non-adversarial manner. Parents’ voluntary acceptance to receive support and collaboration with the state’s welfare agency is considered as a removal of risk to the child. 15 If the parents refuse to cooperate or intensive intervention for the well-being of the child is needed, the case is referred to a juvenile or family court requesting removal of the child from the birth family, as per state laws. Very few cases reach the court, mainly because they are either screened out at the preliminary inquiry or they fall short of adjudication having opted for other measures. Ramsey and Abrams state that in 2008 about 20% of victims were involved in court proceedings. 16

ibid 33 ibid 34 14 Duerr Berrick (n 2) 23 15 Ramsey & Abrams, Children and the Law in a nutshell (4th, West Nutshell Series, United States of America 2011) 92 16 ibid 94 13

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It is interesting to note that once a case appears before a Court of Law with a request for out-of-home care, the courts are obliged to enquire whether social welfare agencies made ‘reasonable efforts’ to maintain the child with the family by giving support services. Where no intervention is undertaken, reports are lodged into a Central State Registry which helps to identify patterns of abuse and detect abusers. These registries are accessible only to governmental entities, social welfare services, the police, and organisations working with children in order to screen potential employees or volunteers. In those states where such entities are allowed this screening, it is actually a duty which, if not fulfilled, can render the organisation liable to damages for negligence in hiring its personnel. The Child Protection Bill in Malta is also proposing in article 4 the setting up of a centralised Child Protection Registry. While CPS will keep this Registry, it is to be owned by the Family Court. Any interested party may apply to the Court to access the Registry. Another practice that is undertaken by CPS in Malta is that once an investigation is underway and the alleged perpetrator is one of the parents, they interview the child at school without the consent of the parents. This is done in order to avoid having contamination of evidence by the alleged perpetrator and as a protective measure for the child. This is a useful practice because the child has not been put under pressure by the alleged perpetrator not to speak up or not to tell the truth. However, there is a strong need that the law backs up this practice. CPS undertake this practice on the assumption that if challenged in court, the member of the judiciary will understand that this practice was undertaken in the best interest of the child and that the member of the judiciary will understand that ‘the risk justifies the action’. When the alleged perpetrator is not one of the parents, CPS call upon the parents, informs them of the substance of the report, and ask the parents to give their consent to interview the child.

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International Obligations

A fundamental premise is that children are persons with rights, which implies that all fundamental human rights appertain to them as well. However, in 1989, it was felt that children’s inherent vulnerability demanded additional protection by law to better address their needs. Hence, in 1989, the United Nations Convention on the Rights of the Child (herein referred as the ‘UNCRC’) was concluded. This was the first international legally binding instrument putting forward obligations on states that ratified the Convention to introduce specific domestic legislation catering for the needs and protection of children. Malta signed and ratified the Convention on the Rights of the Child in 1990 and hence is bound by the obligations under its provisions. The most important article relevant to this study is Article 19 of the UNCRC, which states: (1) States Parties shall take all appropriate legislative, administrative, social and educational measures to protect the child from all forms of physical or mental violence, injury or abuse, neglect or negligent treatment, maltreatment or exploitation, including sexual abuse, while in the care of parent(s), legal guardian(s) or any other person who has the care of the child. (2) Such protective measures should, as appropriate, include effective procedures for the establishment of social programmes to provide necessary support for the child and for those who have the care of the child, as well as for other forms of prevention and for identification, reporting, referral, investigation, treatment and follow-up of instances of child maltreatment described heretofore, and, as appropriate, for judicial involvement. In addition, Article 9 provides for the separation of the child from the parents where necessary, as in the case of abuse and neglect perpetrated by the parents. It specifically states that such 76

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separation is to take place only when this is in the best interest of the child and, unless contrary to these interests, the child has a right to maintain relations with the parents. The UNCRC was supplemented by the ‘Convention on the Protection of Children against Sexual Exploitation and Sexual Abuse’, which came into force on July 2010 and is commonly referred to as the Lanzarote Convention. Malta signed and ratified this Convention on 6 September 2010, coming into force on 1 January 2011. Although this Convention is limited in scope to sexual abuse, it was the first legal instrument advocating criminal penalties in domestic legislations for perpetrators of child sexual abuse.17 In its preamble it gives a list of international instruments adopted in combating child abuse and builds upon these in its determination ‘to contribute effectively to the common goal of protecting children against sexual exploitation and sexual abuse, whoever the perpetrator may be, and of providing assistance to victims’. It obliges state signatories to introduce measures to recruit, train, and raise awareness of sexual exploitation, in particular with regard to people working in contact with children, as well as providing education for children themselves. In Article 11, it introduces the obligation that every state is to set up multidisciplinary structures to provide the support required by child victims of abuse, as well as their close relatives or their carers. Article 12 of the Directive provides for reporting of abuse by professionals, but it does not oblige the introduction of mandatory reporting: (1) Each Party shall take the necessary legislative or other measures to ensure that the confidentiality rules imposed by internal law on certain professionals called upon to work in contact with children do not constitute an obstacle to the possibility, for those professionals, of their reporting to the services responsible for child protection any situation where they have

Daphne project ‘Prevent and Combat Child Abuse: What works? An overview of regional approaches, exchange and research’ Final Report of Work Stream 1: Collecting and Comparing Strategies, Actions and Practice [2012] 3 17

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reasonable grounds for believing that a child is the victim of sexual exploitation or sexual abuse. (2) Each Party shall take the necessary legislative or other measures to encourage any person who knows about or suspects, in good faith, sexual exploitation or sexual abuse of children to report these facts to the competent services. In the year following the Convention, that is in 2011, the European Union adopted two complementary Directives replacing the former Council Framework Decision 2001/220/JHA. Relevant to this study is Directive 2011/92/EU on combating the sexual abuse and sexual exploitation of children and child pornography. 18 According to the Official Journal of the European Union, all EU member States had two years to implement these Directives into domestic legislation. Malta did this through the introduction of provisions in the Criminal Code as well as the enactment of the Protection of Minors (Registration) Act - Chapter 518 of the Laws of Malta, in January 2012. Article 16 of this Directive is almost identical to the above-quoted article 12 of the Convention. Hence both instruments advocate for the facilitation of reporting mechanisms but not for mandatory reporting. Another EU Directive of significant importance is Directive 2012/29/EU establishing minimum standards on the rights, support and protection of victims of crime, and replacing Council Framework Decision 2001/220/JHA.19 This Directive sets as one of its objectives that in the situation of a child victim, the child’s best interests are to be considered as the primary consideration and that these best interests should be assessed on an individual basis according to the child’s age, maturity, views, needs, and concerns. 18

Directive of the European Parliament and of the Council (EC) 2011/92/EU on combating the sexual abuse and sexual exploitation of children and child pornography, and replacing Council Framework Decision 2004/68/JHA [2011] OJ L335/1.This was accompanied by Directive of the European Parliament and of the Council (EC) 2011/36/EU on preventing and combating trafficking in human beings and protecting its victims, and replacing Council Framework Decision 2002/629/JHA [2011] OJ L101/1 19 Directive of the European Parliament and of the Council (EC) 2012/29/EU establishing minimum standards on the rights, support and protection of victims of crime, and replacing Council Framework Decision 2001/220/JHA [2012] OJ L315/57 78

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This Directive outlines the importance of the first contact with the child victim and portrays such first contact as a portal of vital information on their rights under the Directive. This emphasises the importance of training of all professionals that act as potential first contacts. According to Article 4 of the Directive, the first contact should be able to offer information relating to victim support services including information on medical, psychological, and accommodation services; information on the procedures on making a complaint and the following procedures; information relating to protection, legal advice and legal aid, interpretation or translating services; available restorative justice services, and more. Article 9 of the Directive lists the minimum standard of victim support services that should be offered in the Member States of the EU: (a) information, advice and support relevant to the rights of victims including on accessing national compensation schemes for criminal injuries, and on their role in criminal proceedings including preparation for attendance at the trial; (b) information about or direct referral to any relevant specialist support services in place; (c) emotional and, where available, psychological support; (d) advice relating to financial and practical issues arising from the crime; (e) unless otherwise provided by other public or private services, advice relating to the risk and prevention of secondary and repeat victimisation, of intimidation and of retaliation. Furthermore, the European Court of Human Rights (herein referred as the ‘ECtHR’) found a violation of article 3 20 of the European Convention on Human Rights in the case E and Others vs the United Kingdom.21 The case concerned siblings abused both ‘No one shall be subjected to torture or to inhuman or degrading treatment or punishment’ 21 E and Others vs the United Kingdom App no 33218/96 (ECHR, 15 January 2003) 20

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sexually and physically by their stepfather who was convicted of indecent behaviour and issued a probation order with conditions that included him not being able to reside with the family. The social worker in charge of the case found the stepfather present in the family’s home multiple times but did not act on it. Although the children exhibited worrying behaviour such as suicidal attempts and running away from the family home, the authorities did not suspect child abuse. Despite the British government arguing that the abuse would not have been prevented even with more diligent protection and supervision of the family, the Court found a violation because there were a number of available measures that could have been taken that would have made a difference in the lives of the children concerned. The Court stated: The test under Article 3 however does not require it to be shown that ‘but for’ the failing or omission of the public authority ill-treatment would not have happened. A failure to take reasonably available measures which could have had a real prospect of altering the outcome or mitigating the harm is sufficient to engage the responsibility of the State. 22 This principle can be applied to mandatory reporting, as it is a mechanism that mitigates the harm by bringing to light the abuse or neglect and leads to intervention to uphold the child’s best interest.

Concerns around Mandatory Reporting

Many professionals seem to think that introducing mandatory reporting would only cause an overload on the social services. This was the position expressed by the interviewee representing CPS: With mandatory reporting, people will report more. There will be an inundation of the services that cannot cope with the demand. People will think better refer than risk my career. Social workers and other 22

ibid 24, para 99 80

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professionals will not assess the families in more depth. The risk is that with every light situation, people will report. Furthermore, Mathews and Bross write: Economic return from early intervention is very high compared with later attempts to redress imbalances resulting from deficient family environments (Heckman, 2006). 23 Training is critical in reducing unsubstantiated reports, as professionals are aware of what and when they have a duty to report. In fact, King and Scott found that reports by mandated, professional reporters have a considerably higher rate of substantiation when compared to reports filed by members of the community. 24 Mathews and Bross argue that insufficient or inadequate resources to manage the influx of reports should not be used as a barrier to introducing mandatory reporting: Mandated reporting produces more referrals, a proportion of which are not substantiated, which requires resources to screen, assess and investigate, and this may distract overburdened personnel from known cases. However, this is not an argument against mandated reporting, but against insufficient resourcing, and, perhaps, ineffective reporter training and practice, less than optimum screening, and vague reporting laws.25 Moreover, Pietrantonio et al26 identify previous experience as a possible hindrance to health professionals to work with CPS: B Mathews and D C Bross, ‘Mandated reporting is still a policy with reason: empirical evidence and philosophical grounds’ [2008] Child Abuse & Neglect 32, 514 24 C B King and K L Scott, ‘Why are suspected cases of child maltreatment referred by educators so often unsubstantiated?’ [2014] Child Abuse & Neglect 38 <http://dx.doi.org/10.1016/j.chiabu.2013.06.002> accessed 23 February 2015 25 Mathews and Bross (n 23) 513 26 A Pietrantonio, E Wright, K N Gibson, T Alldred, D Jacobson and A Niec, ‘Mandatory reporting of child abuse and neglect: Crafting a positive process for health professionals and caregivers’ [2013] Child Abuse & Neglect 37 102 23

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Health professionals who have had prior negative experiences in dealing with CPS may feel reluctant to report cases to CPS, believing that involvement with CPS caused more harm than good (Flaherty, Schwartz, Jones, & Sege, 2012). Some physicians feel better equipped to address the concerns directly with the family rather than reporting concerns to CPS (Flaherty et al., 2000). However, in a US survey of pediatricians, the majority of respondents identified positive benefits (protection from further abuse; interventions) as a result of CPS involvement (Flaherty et al., 2006). Contrary to common perception, the nurse or the doctor that first sees the child in the Accident & Emergency (A&E) department is not obliged to report the case of child abuse to CPS. However, this first contact is fundamental in the process since it determines the triggering of the child protection mechanism. The procedure practiced at the A&E department is that the initial doctor treats the child, if this is necessary. If the child is admitted for treatment or observation, it becomes the responsibility of the Consultant on the ward under whom the child is admitted to refer the case to the paediatrician in charge of social cases if there is a situation or a strong suspicion of child abuse. The doctor in the A&E department remains responsible for those cases where the child is examined and sent back home, either because of the slight injury sustained or because only minimal treatment is required. This applies particularly to situations of neglect. Such a doctor at the moment has discretion whether to report or not, but ultimately it is that doctor’s responsibility to make a referral of the case to the paediatrician or to CPS. The same applies if the child is taken to a health centre. If the doctor at the health centre finds or suspects that the child is a victim of abuse, the child is to be referred to hospital. If immediate protection is needed or if the doctor suspects that the parents will not take the child to hospital, this doctor can order that the child is taken to the general hospital by ambulance. For less serious situations, the doctor at the heath centre is responsible, but at the moment not obliged, to refer the situation to CPS. Either through hospital or through CPS, the paediatrician examines the child and determines 82

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how to proceed further. If the situation requires welfare services, the paediatrician works in liaison with CPS and the social workers to support the child. If the situation is more serious and there has been the commission of a crime, then the Executive Police are involved by CPS to investigate and prosecute. Academic literature reviewed by the author recognises the challenge of a professional to keep a balance between reporting child abuse and neglect and keeping a collaborative relationship with the patient. Pietrantonio et al propose a strategy to reach such a balance by having the professional discussing with the patient the concerns of the maltreatment and potential repercussions, as well as their duty to report. Pietrantonio et al propose that such professionals receive training on the ‘SPIKES’ protocol, which was originally developed by oncologists to break bad news to patients suffering from cancer.27 The acronym ‘SPIKES’ stands for ‘Setting, Perception, Invitation, Knowledge, Emotion, Strategy’. In their study, Pietrantonio et al give a rendition of each step of the process, an overview of which cannot, unfortunately, be given here for reasons of space. However, these authors believe that this protocol offers positive outcomes when adopted: The manner in which difficult or ‘bad’ news is conveyed to a caregiver directly influences the caregiver’s emotions, beliefs and ongoing relationship with the health professional and how they view their future (Fallowfield & Jenkins, 2004). The SPIKES framework provides structure and support for difficult conversations with caregivers. The informed health professional is better positioned to be supportive to the family, and the [Child Abuse and Neglect] report may be an opportunity for therapeutic change for the child, and for their family. 28 If during the examination of school children by doctors who perform visits and check for specific medical conditions, symptoms of abuse or neglect are noticed on a child, the child is usually referred to a paediatrician in charge of social cases, who then 27 28

ibid ibid 107 83

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follows the case in conjunction with CPS, as the child’s best interests take precedence over parental consent. In fact, professionals in such situations act in accordance to article 2 of S.L. 440.04,29 which authorises the sharing of information between professionals if this is in the best interest of the child. This situation does not arise, however, when a teacher notices symptoms on a child and asks the school nurse or doctor to examine the child. It is interesting to note that educators are in a unique vantage point where they have almost daily contact with children and should be the first professionals to note the signs. This contact gives teachers and school administrators the ability to observe children on a daily basis and make an assessment of a child’s appearance and behaviour compared to the past or compared to the child’s peers. Sudden academic difficulties, drastic change in behaviour, particularly aggression or elusive looks in younger children, are all possible indicators of abuse or maltreatment. Prevention is better than cure, so people becoming parents should be instructed on parental skills that help them decide what is acceptable and what is not. One has to bear in mind the probability that in these situations, the parents are acting in this manner simply because they do not know better. If this was the way they were brought up and no one challenged that model, they will continue to act with the same frame-of-mind, applying the corresponding acquired behavioural regimes with their children. Therefore the author strongly encourages that parents should attend a course on parenting skills during pregnancy and this should be encouraged even when having subsequent children, for many reasons, including that laws and policies are continuously being updated. Alternatively, schools should hold talks with parents to raise awareness about such issues. In order to make these courses or talks effective, the state must enforce their attendance. For the state to fulfil its duty under the UNCRC and the positive obligations set by the ECtHR, it has to go beyond helping the individual. Mandatory reporting ties in with the paramountcy principle, whereby a professional should report when a child is abused or neglected, irrespective of whether the adult having the care and custody of that child is seeking help or not. Mandatory 29

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reporting should not be introduced to prosecute and punish the perpetrators of abuse or parents neglecting their child but it should be introduced primarily to bring to light these situations and intervene as early as possible to protect that child from harm. Mathews and Bross30 write: Without a system where people outside abused or neglected children’s families bring the children’s circumstances to the attention of authorities, many and perhaps most cases will remain hidden. While in some cases a child may disclose abuse to an adult who then reports it, children are rarely the direct source of their own referral, accounting for 0.5% of substantiated reports in the USA in 2004. Parents, who inflict most abuse and neglect, do not usually seek assistance. Providing and strengthening on-going training to professionals will determine whether mandatory reporting will be successful if introduced or will inundate the services unnecessarily leading to a worse situation than at present. CPS holds training sessions of two to three hours with social care students, guidance teachers, heads of schools, and school counsellors, although CPS feels the need to structure these training sessions and give them more depth. This would, however, require a minimum session of one or two days. Working with their limited resources, CPS at present addresses ‘focal persons to whom the other professionals can refer to.’ In this regard, CPS is aided by the Child Safety Services, which is part of the Directorate for Educational Services. However, CPS recognises that these training sessions normally bring about a negative repercussion: The work of CPS is intensive and when this training is done, it normally yields a huge turnover which is a negative thing for the team but a positive thing for the social workers outside CPS. CPS recognises that training is a necessity to professionals that are often the first contact with children, particularly the police officers that are assigned to the local police stations. The 30

Mathews and Bross (n 23) 511-512 85

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interviewee recounted instances when a report was dismissed because of the subjective assessment of the police officer in charge. Therefore it is important to have training seeking to achieve a balance between professionals’ over-sensitivity, fearful approaches, or scrupulous over-reporting and on the other hand, professional desensitization or a dismissive attitude. Moreover, professionals have concerns when deciding whether to file a report or not due to the lack of definitions and guidelines in the law. While it is true that there is a need for clear and homogenous criteria, one has to keep in mind that these criteria will still be subjectively applied and therefore extreme attitudes adopted by professionals cannot be avoided; they can only be addressed in training. Training encourages professionals to be reflective that is to reflect on what feelings the report aroused in them and what was their first reaction to the report. When in doubt, consulting with CPS is highly advisable. General and specialist training of professionals that come in contact with victims of abuse and/or neglect, including police officers, judges, prosecutors, lawyers and court staff, is also a requirement under Directive 2012/29/EU.31 The aim of this training is to ‘increase the awareness of the needs of victims and to enable them to deal with victims in an impartial, respectful and professional manner’. In the case where a teacher in a Church school becomes aware that a student is being sexually abused by a member of the clergy, that teacher is obliged to report to CPS under the Bill (to the designated member of staff under the Education Policy on Child Abuse) as well as to report to the Delegate under the Church Statement and Policy. Two parallel procedures should be initiated to investigate, possibly leading to different outcomes. Another measure that could improve services responding to child abuse or neglect situations is having a multidisciplinary team working with the child or family or parent rather than one social worker. The perception the parent gets is different; having a group of professionals taking a decision that will upset the parent is different than having one professional taking the same decision and in most cases ending up being the target of the parents. It is unprofessional to have one person taking such a life-changing 31

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decision; it should not be the decision of the social worker or worse, the social worker using the words of other professionals to back her decision. Having a multidisciplinary team would help to create more trust between professionals and would help people perceive the decision as a collegial decision truly in the best interests of the child. Having a multidisciplinary team gives the veritable impression of a unified front and would help parents focus on the real problem rather than hitting back at one professional on whom they direct all their anger and emotions. Moreover, an added benefit is that the patient receives attention and support for the multiple needs or issues that one may have. Mennen et al described that there is a ‘usual practice of classifying a child with only one kind of maltreatment which may be the type that brought the child to the attention of the authorities or the one that is easiest to substantiate’.32 However, the same study, which focused on child neglect, showed how this practice of single classification only obfuscates the pervasiveness of the maltreatment: Nearly half of the neglected children were also victims of physical abuse and about 21% were also sexually abused. Neglect needs to be understood not as an isolated event for children but as part of the total amalgam of maltreatment that children experience. 33 The principal implication of introducing mandatory reporting into Maltese law is that the procedure the professional has to adopt will no longer be a matter of choice when faced with a situation of child abuse or neglect. Nowadays professionals face a moral dilemma on what to do with such knowledge or strong suspicion. The fact that there are no guidelines in the law on what constitutes abuse makes it difficult for some professionals to arrive at the right decision. There is very little help for them to discern whether a situation is one of abuse, and therefore merits reporting, or one of bad parenting, or even some other situation involving various

F E Mennen, K Kim, J Sang & P K Trickett, ‘Child neglect: definition and identification of youth’s experiences in official reports of maltreatment’ [2010] Child Abuse & Neglect 34 652 33 ibid 655 32

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interacting variables, that, in their opinion, could be better tackled differently. Investment into the infrastructure and into the services receiving reports is a must if mandatory reporting were to be introduced. There are various ways of avoiding inundations on CPS. To have a more effective service, two separate courses of action should be undertaken following reporting that is assessment and investigation. This should also include raising awareness and informing parents about positive parenting skills, having professionals working in multidisciplinary teams, and encouraging further study and research. A key element in the successful implementation of mandatory reporting is providing training to all professionals working with children. In order to avoid having the child giving multiple testimonies, each time reliving the traumatic experiences, the author supports the Bill’s proposition that Malta should adopt the Nordic Children’s House Model whereby the child is taken in child-friendly premises and testimony is taken in one sitting with all the professionals working in the best interests of the child present for this interview. Moreover, a professional skilled and trained in holding a child interview should conduct this interview. Although social workers as well as police officers, are very sensitive to children in these situations, the author is concerned about their ability to take testimony from a child in a way that is the most conducive to the child’s well being. To protect each child in the best possible manner, professionals in Malta need to move away from the perception that they are capable of doing different sensitive tasks. The author strongly suggests a network of professionals working together in these instances. The office of the Commissioner for Children promotes the introduction of mandatory reporting. In the 2007 Annual Report, commenting on the Council of Europe Convention on the Protection of Children against Sexual Exploitation and Sexual Abuse, it expressed its hope that this Convention would be the means leading to the introduction of mandatory reporting into local legislation. It is also interesting to note that in the 2008 Annual Report it was reported that the Office had received reports of child abuse which it had then referred to Agenzija Appogg or to the Support Services within the Directorate for Educational Services. Although the 88

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Report did not specify who the reporters were (particularly if they were children), it is still relevant to note that people see the office of the Commissioner for Children as a reference point, whether it is to obtain information or whether it is to redress a situation that they are aware of. The procedure within the office of the Commissioner for Children is to refer any reports of child abuse and neglect to CPS. Mandatory reporting also featured in the recommendations made by the Office of the Commissioner for Children in the ‘Manifesto for Children 2013’.

Conclusion

Mandatory reporting would make it an obligation and not a choice to report – hence it would hopefully eliminate professionals approaching police officers informally so as not to go to Court, or reporting anonymously and then CPS not being able to communicate back. Each profession should advocate for the introduction of mandatory reporting in the interest of the profession itself as professionals would be relieved of the burden of making the decision to report or not. However, the most important implication at this stage in introducing mandatory reporting is that the interests of the child are put as the paramount consideration. Whether the professional is willing to take up the responsibility or to sacrifice time and energy to draw up a report and to appear in court or not would be irrelevant; the professionals would now have to serve the best interests of each child. The author thinks that only in this manner will children be truly safeguarded and given the support needed, particularly as they are so vulnerable in these situations of abuse. The implications of introducing mandatory reporting depend on the investment that will accompany this introduction. If mandatory reporting is only introduced legislatively by means of an enactment of a new law or by a provision in a present law, the implications may be disastrous with an inundation of reports filed with child protection services as professionals do their utmost to avoid penalties for not reporting. In turn this leads to longer waiting lists, less social workers wanting to work in this ever-more stressful 89

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environment, and ultimately the child in a critical situation of abuse or neglect having to wait months before there is some sort of response. On the other hand, if mandatory reporting is accompanied by strategy and investment, this would mean that services are coordinated, and professionals know what their responsibilities consist of, including what and when they are expected to report. There will also be early intervention in situations of child maltreatment possibly before some of the situations escalate to the point that the child needs to be removed from the birth family to be given alternative care and protection. CPS in this scenario is part of a network of other social services to which individuals are referred to for support. Early interventions mean that children’s well-being is safeguarded earlier, possibly saving the child from more traumatic experiences. Moreover, a long-term implication of this investment would be that the frequency of parents being the perpetrators of abuse is lessened as there is more awareness on what is acceptable behaviour and what is not. A short term implication of introducing mandatory reporting is that media attention on the subject would lead to a huge amount of situations being reported at once to CPS. Other legislations have noted a spike in the number of referrals just after the introduction of mandatory reporting. Initial increase in the number of referrals should not determine the success or failure of such a system but this should be examined on a more long-term basis. The author opines that the two most important implications of introducing mandatory reporting are, first, that the well-being of children is given the utmost importance and, secondly, that the State would have fulfilled international obligations, particularly those under the CRC. Children are most often viewed as the citizens of the future but this is incorrect; children are living in society today and therefore should have their rights respected today. Furthermore, where a child is being deprived of healthy development and a safe environment, and is not given the care and protection that the child requires by the caregivers, then the State has a responsibility, and a positive obligation as held by the ECtHR, to intervene and help that vulnerable child.

CONSTITUTIONAL LAW

Maltese Constitutional Development at the Turn of the 20th Century: A Historico-Legal Perspective Claire Bonello

Quo Vadis Parliament Autonomy? Revisiting of the Maltese Parliamentary Standing Orders Anġlu Farrugia and Clive Gerada

Questioning Parliamentary Supremacy over the Courts Yet Again Ivan Mifsud

Judicial Importation of Italian Private Law Solutions and its Implications Mark A Sammut

Claire Bonello

MALTESE CONSTITUTIONAL DEVELOPMENT AT THE TH TURN OF 20 CENTURY: A HISTORICO-LEGAL 1 PERSPECTIVE CLAIRE BONELLO

_______________________________________________________ Dr Claire Bonello read law at the University of Malta (LLD) and history at Durham University in the United Kingdom (MA). Her Doctor of Laws thesis was entitled ‘Legislation under the 1887 Constitution of Malta’, while her Master’s dissertation dealt with ‘Malta, Britain, and the 1903 Constitution’. She was granted the warrant to practice as a Notary Public and Commissioner for Oaths in Malta in 2014, and her research interests lie in legal history, conveyancing, gender, and notarial law. She was the editor of Id-Dritt Vol. XXI (2011 edition). ____________________________________________________________________

Introduction

At the turn of the twentieth century, Malta was going through a multitude of changes on a legal and constitutional level. As a British crown colony, the islands depended on concessions from officials in London for the opportunity to help mould Maltese legal development, and the period between 1887 and 1903 presented an unprecedented chance for this to happen. However, a variety of factors were at play during this period resulting in a situation where constitutional progress and legislative development were not evolving at the same pace, and this was undoubtedly apparent with the revocation of the 1887 Constitution in June 1903. The 1887 Constitution introduced a system of representative government for Malta. How representative this government truly was in practice will be further explored below, but the fact remains that the new Constitution in December 1887 heralded a quantum This paper is based on the author’s LLD thesis entitled ‘Legislation Under the 1887 Constitution of Malta’ (LLD thesis, University of Malta 2014) and on her MA dissertation entitled ‘Malta, Britain, and the 1903 Constitution’ (MA Modern History dissertation, Durham University 2012). 1

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leap in constitutional development for the Maltese Islands; one that saw the Maltese elected members in the Legislative Council of Government being at a majority. In reality, however, the workings of this Constitution were not quite a quantum leap in legislative terms. Legislative stagnation and political obstruction were plentiful throughout the period, so much so that the 1887 Constitution was ultimately lifted by 1903, having been often dubbed as essentially unworkable and ineffective. 2 For example, Chief Secretary to Government Gerald Strickland had fully lost faith in its effectiveness by 1901: ‘We have here no House of Lords, no second chamber such as exists in other countries, to check the impulsiveness or the obstinancy of a domineering democratic representative assembly’.3 This article employs a historico-legal perspective, ensuring a more flexible appreciation of the constitutional and legal development at the turn of the twentieth century. It is very limiting to look at a series of laws and enactments while ignoring the social and political elements which contributed to their existence or otherwise. An interdisciplinary approach is thus of vital importance when examining a period of legal development, particularly when non-legal factors have had such a defining effect on the resulting legislative landscape. This article aims to provide a brief evaluation of the legislation enacted between the 1887 and 1903 Constitutions, the factors which helped or hindered Maltese legal development during this period, and the legacy of these two Constitutions. There will be a particular focus on certain legislative hallmarks that were enacted at the turn of the twentieth century in Malta, especially those relating to health legislation and criminal law, which underwent several significant changes throughout the period. A few noteworthy remnants of legislation that are still in force in twenty-first century Malta will also be discussed.

Harrison Smith, Britain in Malta, Volume I: Constitutional Development of Malta in the 19th century (Progress Press 1953) 206 3 House of Commons, Further Correspondence Relating to the Political Condition of Malta (Cd 715, 1901) 107 94

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A Background to the Period 1887–1903

Malta became a British crown colony in 1815, with the Congress of Vienna, which reaffirmed the 1814 Treaty of Paris, after having been voluntarily ceded to Britain in 1802. 4 This meant that Britain had juridical sovereignty over Malta. The Maltese were a people that had been ruled over by several different powers in the past, and yet they still expected that their own rights were not overlooked – in fact, some form of a council of local representatives which would assist the current government had been the norm for hundreds of years (such as the Università in the Medieval Period).5 Soon after the British had settled in Malta, therefore, it was almost a given to the Maltese that there would be at least some form of an advisory council through which they could put forward local concerns. However, even after a suggestion to this effect from the Secretary of State in London, the first Governor of Malta, Sir Thomas Maitland (1813–24), did not comply.6 It was several years until the first Council of Government for Malta (consisting of a seven-member non-elective Council) was constituted, in 1835, and this was after the Maltese had applied considerable pressure.7 In 1849, Malta was granted elective representation on a constitutional level, with a minority of Maltese elected members in the new Council of Government. 8 Consequently, in 1864, the Secretary of State for the Colonies, Lord Cardwell, established the so-called ‘Cardwell Principle’: great consideration should be shown to the opinions of the elected members of Council, in matters of local 4

This was acknowledged in Sammut v Strickland by the Judicial Committee of the Privy Council in England ([1938] AC 678) with their Declaration of the Rights of the Inhabitants of the Islands of Malta and Gozo. An English version of this declaration is found in JJ Cremona (ed), Human Rights Documentation in Malta (Malta University Press 1966) 5–7. 5 Robert Montgomery Martin, History of the British Colonies: Possessions in Europe (James Cochrane and Company 1835) 267 6 Bathurst/Maitland, 28 July 1813, CO 159/4 7 Aberdeen/Ponsonby, 1 April 1835, CO 159/12; Proclamation No V of 1 May 1835 in Malta Government Gazette, 6 May 1835, 153 8 O’Ferrall/Grey, 1 February 1849, CO 158/145; Grey/O’Ferrall, 22 May 1849, CO 159/22 95

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and domestic interest, and no vote of money should be pressed against the majority of the elected members, except under very special circumstances in which the public interests or credit were seriously at stake. 9 While this principle was later limited in 1875 by Lord Carnarvon, who instructed that the Cardwell Principle could be set aside in cases where the garrison was at risk, 10 these developments all formed part of the road leading to the twentieth century and the period that is the focus of this article. This limitation, however, was already an indication of things to come, as shall be discussed further on in this article, and how the British would not think twice about revoking certain concessions that they would have made to the Maltese. Then, in the 1880s, concessions were increasingly granted to the local representatives, such as when Secretary of State for the Colonies, Lord Derby, instructed the Governor of Malta in 1883 to ensure that all local matters were to be submitted before the Maltese elected members.11 The 1880s also brought about the emergence of political parties or, as Brian Blouet describes them, ‘recognisable alliances’, which provoked in the Maltese an increased desire to be more properly represented on a political and legislative level. 12 More and more pressure was being exerted onto the British to appease to the wishes of the Maltese for more concrete and more tangible political representation and law-making power. The much-anticipated constitutional advancement was duly granted in 1887 with the Letters Patent of 12 December 1887, altering the constitution of the Council of Government of Malta. This Constitution was granted amid a great sense of hope and confidence in its proper functioning and in the betterment of circumstances for and relations between the Maltese and the British. This can be seen, for example, from the demeanour of the Governor of Malta in 1888, John Linthorn Simmons, at the first sitting that was held after the 1887 Constitution had been granted: 9

Cardwell/Storks, 19 September 1864, CO 159/27 Carnarvon/Straubenzee, 22 May 1875, CO 158/249 11 Derby/Borton, 8 March 1883, C 3524, 8 12 Brian Blouet, The Story of Malta (Progress Press 1984) 183 10

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Since the last time I had the honour of presiding over a meeting of the Council of Government in this Chamber great changes have taken place in its constitution. Her Most Gracious Majesty the Queen, reposing entire trust and confidence in the fidelity of Her loyal subjects of Malta and its dependencies, has been pleased to confer upon them enlarged privileges, in the hope and belief that they may conduce to the happiness and prosperity of all classes of Her faithful subjects in these islands.13 However, as the period progressed towards the twentieth century, this sense of hope was quickly transformed into one of bitter disappointment for all involved. Two opposing political camps started to polarise even further: the Maltese elected members (staunchly supporting italianità) and the British authorities (and others supporting Anglicisation); the legislative process suffered as a result of these clashes. It is also important to note that a number of other national, regional, and international factors, contributed to this harm; such factors are to be discussed at a later stage in this article.

An Overview of the 1887 Constitution

The Constitution that was in force prior to the 1887 Constitution, the 1849 Constitution, contained the legislative structure of an official majority. Contrastingly, the 1887 Constitution provided for the constitution of a legislative structure of an elected majority, through the introduction of the system of representative government. By virtue of the 1887 Constitution, the unicameral Legislative Council of Government of Malta was composed of twenty members, with fourteen of these being elected representatives. This nominally classified this legislature as being a ‘representative legislature’, meaning a ‘colonial legislature which shall comprise a legislative body of which one half are elected by 13

Debates of the Council of Government of Malta in the Session 1888, Sitting 1, 21 March 1888 97

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inhabitants of the colony’, as according to the first Article of the United Kingdom Colonial Laws Validity Act 1865.14 This meant that the Maltese elected members were at a majority, and could decide on issues relating to public finance and other local matters. 15 However, they were precluded from deciding on imperial matters, and full power was still reserved to the Crown. Therefore, while the 1887 Constitution represented a colossal way forward for Maltese politicians to have a tangible effect on the administration of Malta, the British authorities had maintained well-defined exceptions to the concessions granted to the Maltese representatives. The step forward in the 1887 Constitution was thus still a far cry from ‘responsible government’, with the parliamentary accountability that accompanies this. The situation in Malta at the time can be essentially summarised as having in place a government with an elected majority that included several explicit derogations from this majority’s powers, due to the clear rights of intervention on the part of the British authorities. The new Legislative Council of Government included twenty members (six official and fourteen elected members), as well as the Governor who presided over the Council. 16 A Vice-President was added to the Council by virtue of the 6 February 1893 Letters Patent,17 and the number of elected members was reduced to thirteen by virtue of the 16 December 1898 Letters Patent, which disallowed ecclesiastical persons from being elected to the Council of Government.18 (Dalli vs Decesare, an 1899 case, conveys how even the courts in Malta were confirming that ecclesiastics were not able to form part of the Council.) 19 The official members included the Chief Secretary to the Government, the Crown Advocate, and four other members who held public office and were also members of the

Colonial Laws Validity Act 1865 Law, Letters Patent and other Papers in relation to the Constitution of the Council of Government of Malta (Malta Government Printing Office 1889) 113–132; Holland/Simmons, 14 December 1887, C 5308, 77. 16 Law, Letters Patent and Other Papers in Relation to the Constitution of the Council of Government of Malta (Malta Government Printing Office 1889) 114, cl III 17 ibid 184, cls I, II 18 ibid 207, cl I 19 26 May 1899 15

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Executive Council.20 The fourteen elected members were also divided: ten members being elected by general electors, and four being elected by ‘special electors’, the latter being later reduced to three with the aforementioned 16 December 1898 Letters Patent. 21 To be a general elector, one had to be a male of at least twenty-one years of age who received an annual income from immovable property or paid a minimum of £6 annually to rent immovable property.22 To be an elected member elected by these general electors, one would also have had to have increased rights relating to immovable property, either possessing immovable property (whether in his own right or in the right of his wife) with a value of £100 or more, renting property with the annual rate of £10 or more, or else occupy board and lodging in Malta at a minimum rate of £40 per annum.23 The 19 March 1888 Letters Patent duly divided Malta into ten electoral districts, resulting in one Council member from each district being elected, resulting in those ten members elected by the general electors.24 The special electors had to fulfil a further requirement to those needed for general electors, being that the income received or paid by them had to be a minimum of £60 annually. 25 The four members who were to be elected by the special electors came from four different classes: (1) ecclesiastical persons (who were later disallowed, as discussed above), (2) holders of titles of nobility (Titolati) and persons receiving an annual income of a minimum of £150 from immovable property, (3) members of the Borsa di Commercio di Malta, and (4) University of Malta graduates. 26 The basic legislative process outlined in the 1887 Constitution was as follows: any member of the Council was able to propose a resolution or an Ordinance for eventual promulgation, on condition that ‘due notice’ was given and that the proposals did ‘not impose any tax or dispose of or charge any part of the public 20

Law, Letters Patent and Other Papers in Relation to the Constitution of the Council of Government of Malta (Malta Government Printing Office 1889) 114, cl IV. 21 ibid 207; Clause II of the 16 December 1898 Letters Patent 22 ibid 119–120, cl XIX 23 ibid 116, cl X 24 ibid 155–157, cl XII 25 ibid 120, cl XX 26 ibid 115-116, cl IX 99

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revenue’.27 Questions were to be determined by a majority of the votes of all the members who were present, apart from the person presiding the meeting. Clause XXIX outlined the principal concession granted by the 1887 Constitution: that challenged votes of public money were to be determined by a majority of the present elected members’ votes.28 It was soon clear to the British authorities that this provision was one that ‘afforded facilities for obstruction that could potentially be seriously detrimental to the good government of the Colony’,29 and this Clause was soon amended to require a minimum of eight elected members voting in favour to pass a public money vote.30 It is also noteworthy to mention, however, that the Governor was able to give ‘no force or effect’ to any Council vote or resolution, by means of his power of disallowing any one of these and disregarding any advice from Council members to the contrary.31 Historiography is understandably largely negative when it comes to the 1887 Constitution and its workings. Charles Owen describes it as being a formidable constitutional leap which, however, ‘offered the illusion rather than the substance of executive responsibility’, and that ‘the council was like a child playing at democracy under the eye of parents ready to stop the game when it became too rough’, since the Governor still maintained a power of veto within the Legislative Council of Government.32 WF Monk emphasises the fact that the British expressly maintained their right of intervention by a direct exercise of the Royal Prerogative, 33 while Harrison Smith sees the representative government of Malta that was granted in 1887 as: a mixed legislative and executive body, which possessed none of the fundamental concepts of responsibility as embodied in the English House of Commons, and which gave no recognition to a two27

ibid 123, cl XXXI ibid 122–123, cl XXIX ibid 180; See 23 September 1891, point three 30 By virtue of the 19 August 1891 Letters Patent 31 Law, Letters Patent and Other Papers in Relation to the Constitution of the Council of Government of Malta (Malta Government Printing Office 1889) 123, cl XXIX 32 Charles Owen, The Maltese Islands (Newton Abbot 1969) 64 33 WF Monk, Britain in the Western Mediterranean (London 1953) 172 28 29

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party or multi-party system; it was to take on a clumsy, awkward compromise of representative government34 and as a ‘limited representative form of government that enabled the handful of elected representatives in the mixed executive and legislative council to control the funds for domestic government, but never the administration of the Islands’.35 Other historians focus on other factors that hindered the proper functioning of the administration and legislative process in Malta at the turn of the century, such as Edith Dobie, who looks at the premature ambitions of the Maltese politicians of the time who, rather than making cautious and good use of their newly-acquired political powers, ‘almost at once, their chief objective became wresting still more power from Britain, that is, transforming representative government into responsible government’.36 This objective was wholly unsuccessful, at least until 1921, as will be discussed below, with regard to the revocation of the 1887 Constitution and of the constitutional gains granted by virtue of it.

Constitutional versus Legislative Progress: External Influences, and Economic and Legislative Stagnation

The 1887 Constitution represented a massive step forward for constitutional progress in British Malta, with the introduction of the elected majority in the Legislative Council of Government and, in effect, of representative government. However, legislative and constitutional development did not go hand in hand in the period that followed, as Malta and the world approached the end of the nineteenth century. The legislative product that resulted from the period 1888–1903 was nowhere near that which could have been produced had the legislative process worked on in an unhindered manner. The factors that contributed to this lack of parallel 34

Smith (n 2) 237 Harrison Smith, Britain in Malta, Volume II: Italian influence on British policy in Malta, 1899-1903 (Progress Press 1953) 157–158 36 Edith Dobie, Malta’s Road to Independence (Oklahoma 1967) 38 35

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movement between constitutional and legislative progress were various, emanating from the internal workings of the Council, from national circumstances, and from regional, imperial, and international influences. On the most basic level, a palpable divide was ever-present within the Legislative Council during its sittings between 1888 and June 1903. Political squabbles were frequent, and a number of local issues continuously emerged to hamper any semblance of a smoothly-functioning Council. These stemmed from delicate relations with the Church, an uninterested franchise, the urgent need for public works which kept facing obstructions, a resistance to taxation on the part of the elected members, economic stagnation, and the emergence of the notorious language question and the mixed marriages question. The main repercussions of these factors were the debilitating obstructions on the part of the Maltese elected members in the Legislative Council and, in turn, the unfettered use of the reserved powers by the British authorities. The first issue that must be brought to light, however, is the reality regarding the ‘representative government’ that was granted by virtue of the 1887 Constitution. This political representation was never (and could never have been) plausibly and truly ‘representative’.37 Franchise was very limited (approximately 10,000 persons out of about 184,000)38 and electoral turnout was less than 50%, indicating a very uninterested electorate. 39 The small group of Maltese males that, in reality, actually participated in the outcomes of constitutional progress due to the 1887 Constitution did not offer much diversity or sophisticated political action, and this was also due to external factors and the specific circumstances in which Malta and the British Empire had found themselves at the turn of the twentieth century.40 Furthermore, the conflicts and clashes that existed throughout the period created much political tension. This was not a setting conducive to the discussion and promulgation of legislation – even 37

Certainly not by contemporary standards. National Statistics Office Malta, ‘Census taking in Malta’ <http://census2011.gov.mt/census-taking> accessed 10 April 2014 39 Blouet (n 12) 164 40 Claire Bonello, ‘Legislation under the 1887 Constitution of Malta’ (LL.D. thesis, University of Malta 2014) 127 38

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though, as shall be discussed below, a number of important legislative enactments were introduced during the period. Apart from conflicts on a personal level, often seen between Fortunato Mizzi and Sigismondo Savona, and Gerald Strickland and other official Council members, there was a general Maltese versus British (or pro-British) cleavage that persisted. 41 The mixed marriages and the language questions heightened political tensions, and the Maltese elected members conveyed their discontent throughout the period by using their position as a majority in the Legislative Council to obstruct the legislative process. They rejected several votes, such as salaries of teachers who used English as the language of instruction in their classrooms,42 and finance bills which in turn delayed a variety of capital projects such as schools, hospitals, and drainage and water projects, many of which were an imperial priority.43 The elected members also took to absenting themselves from their seats and resigning at several instances throughout the period.44 The postponement of legislation was one of the most oftenused ways in which the elected members chose to show their displeasure and used their powers to delay legislation. For example, the Post Office Ordinance of 1900 was postponed several times before it was passed – it was postponed on 21 February 1900, 28 February 1900, and 4 April 1900, and finally passed on 2 May 1900 – and a number of other draft Ordinances faced the same fate in the Legislative Council as formed under the 1887 Constitution, particularly those Ordinances and laws relating to taxation. The Public Revenue Improvement Ordinance was introduced in June 1900 to the Council, and included urgently-needed legislation relating to public works. This ended up being postponed and ultimately unenacted due to the rejection of the elected members, since these were against the imposition of taxation and wanted to use their power as the elected majority to show their discontent

ibid 128 House of Commons (n 3) 114 Smith (n 2) 213 44 Debates of the Council of Government of Malta, Sitting 37, 31 May 1889; Fremantle/Chamberlain, 29 April 1898, CO 158/323 42 43

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regarding the language question.45 After another effort in 1901 for these public revenue laws to be passed was again thwarted,46 the British authorities had to resort to the use of the royal prerogative by means of an Order in Council (the 1901 Malta Revenue and General Purposes Order in Council). The reserved powers of the British Crown were specified very clearly within the 1887 Constitution. A despatch from London dated 14 December 1887 shows this: The main object which the new Letters Patent are designed to effect, is to give to the representatives of the people of Malta a specific power of deciding questions of finance and other questions of local concern, while full power is reserved to the Crown, not only as interested in the security of the fortress, but also as responsible for the obligations of the Island Government, to intervene, by legislation or otherwise, in regard to any question.47 The British authorities thus used these rights of intervention on several occasions throughout the period. Certain laws were disallowed, such as Clauses in Ordinance No V of 1895 (wherein its Articles 1, 2, 3, 6, 16 and 17 were disallowed), Ordinance No XI of 1898 relating to public meetings and assemblies, and Ordinance No XIII of 1900, amending the police laws. As discussed, Orders in Council were also frequently used by the British to intervene and impose legislation that was in line with imperial policy. One of the most significant Orders in Council of the period was the 1899 Malta (Use of English Language in Legal Proceedings) Order in Council, which substituted English for the Italian language in Maltese public life within a period of fifteen years, and this was a clear use of the royal prerogative as a tool of intervention, disregarding the spirit of the 1887 Constitution.

See Debates of the Council of Government of Malta, Sitting 35, 15 June 1900, col 1642–44 46 See Debates of the Council of Government of Malta, Sitting 17, 13 February 1901, cols 637–49 47 Law, Letters Patent and Other Papers in Relation to the Constitution of the Council of Government of Malta (Malta Government Printing Office 1889) 134 104

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During the period at hand, the fact remains that Malta was a British crown colony, and an important naval fortress in the middle of the Mediterranean Sea at a sensitive time for international affairs. Imperial policy started to move towards fin de siècle imperialism,48 and this impacted upon Britain’s conduct with Malta and the local representatives and their demands. While in 1887 it was deemed fit to grant the Maltese such a large concession on a constitutional level, as the British Empire approached the twentieth century, things started to change. Particularly where it came to local development and restructuring, the British increasingly used their right of direct intervention to suitably attend to imperial priorities. 49 Other external influences, which affected the administration of Malta at the turn of the twentieth century, included the AngloItalian friendship, and the actions of particular British political figures. The state of the friendship between Britain and Italy constantly impacted British imperial policy as regards Malta, particularly when it came to the language question. The reactions of British policy regarding Malta in the Italian press often directly affected the next step that was taken by Britain, such as when Secretary of State for the Colonies in London, Joseph Chamberlain, withdrew the aforementioned Ordinance that would have substituted English for Italian in the Maltese law courts. The figure of Joseph Chamberlain was also a significant influence on how history and Maltese legal development was shaped at the turn of the twentieth century. Notably, Chamberlain favoured a policy of direct intervention, and this direct involvement angered the Maltese representatives. All this had a ripple effect, which ultimately contributed to the end of the 1887 Constitution. 50

JAS Grenville, Lord Salisbury and Foreign Policy: the close of the nineteenth century (Athlone Press 1964) 3; Simon C Smith, British Imperialism 1750-1970 (Cambridge 1998) 72 49 See Fremantle/Chamberlain, 2 May 1897, CO 158/319 50 Bonello (n 40) 85–89 105

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Maltese Legislative Hallmarks at the turn of the 20th Century

The internal and external influences that affected the functioning of the legislative process in Malta at the turn of the twentieth century all indicate the dire circumstances in which the Legislative Council found itself at the time. Notwithstanding these factors and the legislative stagnation that existed, the period during which the 1887 Constitution was in force saw several legislative hallmarks being introduced, making it a significant period for Maltese legal development. Three of the most significant legislative themes that were impacted included criminal law, health legislation, and mortmain law, and it is also important to note that several remnants of legislation that were enacted during the period are still in force today. Several significant substantive and procedural criminal laws were enacted or amended under the 1887 Constitution. Ordinance No XI of 1900 was one of the most important Ordinances that was introduced during the period, and dealt with several criminal laws. It introduced important criminal law principles, such as the order of hearing of a cause in court: ‘the court shall hear the appellant and the respondent, in the order which it shall deem most convenient, regard being had to the circumstances of the case’.51 It is interesting to note that eleven provisions added by this Ordinance are still in force today. These include provisions relating to the provocation of a tumult or an affray for the purpose of committing a homicide or of causing bodily harm,52 when a criminal inquiry is to be held with closed doors,53 and appeals from interlocutory decrees. 54 Important Criminal Law amendments were also implemented in the period between 1887 and 1903, and several of these have subsequently been left unmodified to the present day. These include the fundamental classification of offences, where the subjective weight between grievous and minor offences was removed in 1901, 51

Criminal Code, Chapter 9 of the Laws of Malta, article 427 ibid, article 238 53 ibid, article 409 54 ibid, article 415 52

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as was the case in the original 1854 version. The latter read: ‘Grievous offences are designated crimes, and minor offences are designated contraventions’, while the version that was amended in 1901 and is still applicable today reads: ‘Offences are divided into crimes and contraventions’.55 Several other significant enactments relating to criminal law under the 1887 Constitution regarded the insertion of detention as a punishment in 1888,56 the definition of bodily harm,57 and the provision relating to unlawful carnal knowledge.58 Therefore, this exercise of comparing different versions of provisions throughout the years and after a number of amendments is very useful in tracing the evolution of law and how different time periods affected legal development. In 1896, Malta was described as one of the empire’s ‘most important hospitals’,59 and thus, health and sanitary legislation was clearly very important at the turn of the twentieth century, and primary legislation (as well as the intervention of the British authorities by means of the royal prerogative through Orders in Council) was repeatedly used in relation to this. The most significant Ordinances that were enacted during this period that related to health and sanitary issues were the sanitary Ordinances, and these consolidated all legislation relating to the practice of the sanitary and kindred professions in Malta, culminating in the Medical and Kindred Professions Ordinance of 1901 (Chapter 31 of the Laws of Malta). While this Ordinance was heavily amended in subsequent years, several original articles that were introduced at the turn of the twentieth century are still in force today, such as the requirement of a licence to set up a chemical laboratory, 60 and a number of articles relating to poisonous substances and the administration of drugs to domestic animals.61 The significance of urgently-needed public works and local restructuring and development at the turn of the twentieth century 55

ibid, article 2 Ordinance No XVI of 1888 Criminal Code, article 214 58 ibid, article 201 59 HC Deb 15 May 1896, vol 40, col 1479 60 Medical and Kindred Professions Ordinance, Chapter 31 of the Laws of Malta, article 96 61 ibid, articles 102–104 56 57

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also brought about a number of important laws relating to health and sanitation, including the aforementioned Malta Revenue and General Purposes Order in Council of 1901. These laws were also intimately linked with taxation and British imperial policy, and were thus quite controversial pieces of legislation for the period at hand. Key laws were promulgated in relation to the prevention of the spreading of diseases, drainage facilities, and hospitals, although the Sanitary Ordinances remain the most important legislative hallmark of the period with regard to health and sanitary legislation. A final theme of legislation enacted under the 1887 Constitution, which can be regarded as a significant legislative hallmark, is that relating to mortmain law. This centres on a single Ordinance: Ordinance No V of 1892, and yet this was one which had important repercussions for the development of mortmain law and was also linked to several other Ordinances that were enacted throughout the period; these related to primary legislation which provided exemptions granted to the Church from the obligation of alienating certain immovable property.62 This Ordinance amended a Proclamation of 1822 that had imposed the obligation that required the Church in Malta to alienate immovable property within one year of acquisition. The significance of the 1892 Ordinance was that it affirmed the status quo that had been in existence since the beginning of the 1800s, and conveys how the State wanted to maintain a certain amount of ‘control’ over acquisitions of immovable property by the Church. 63 A noteworthy observation that should be made with regard to this period is thus also the significance of the use of primary legislation, which also highlights the importance of issues relating to money and taxation, and how these affected the legislative enactments that resulted from the period. Law is not created in a vacuum, and a multitude of factors affect its existence and its success or otherwise. The use of primary legislation clearly indicates where the most important and sensitive issues of Maltese society were at the time, such as laws relating to health and sanitation, since 62

Eighteen instances of these ad hoc exemptions have been traced throughout the period between 1888 and 1903 63 See Charles J Scicluna, ‘The Mortmain Act 1967: Its Genesis and Interpretation’ (LL.D thesis, University of Malta 1983) 108

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this type of legislation necessitates debate on a public level, elevating the legislative process to a more significant context. This was especially true in relation to legislation and votes relating to public finance and local development and restructuring, as already discussed above.

The 1903 Constitution and the Journey towards SelfGovernment

Even though the period between 1887 and 1903 yielded several legislative hallmarks, by 1903, the general unworkability of the 1887 Constitution was apparent, and while the Maltese politicians hoped that their persistent obstructions might translate into increased powers, their protests only made the Secretary of State for the Colonies’ decision easier. After another refusal on the part of the elected members to pass a vote on education, the 1887 Constitution was swiftly revoked and lifted – with a new Constitution being proclaimed on 25 June 1903. This new Constitution meant that there was a reversion to the official majority principle,64 as had been the case under the 1849 Constitution, granted over half a century earlier. JJ Cremona describes the downfall of the 1887 Constitution as being largely due to the division of the executive and the legislative, and how the elected members were given power without responsibility, for they could dislocate the machinery of government without being called upon to form an alternative government and themselves undertake responsibility if they had no responsibility, neither was the executive responsible to them. 65 Sir Charles Mansfield Clarke, the Governor of the time of the lifting of the 1887 Constitution, was similarly unconfident about its 64

JJ Cremona, The Maltese Constitution and Constitutional History Since 1813 (Publishers Enterprises Group 1997) 22 65 ibid 20–21 109

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longevity, admitting that he felt that it was ‘doomed at the outset’, since governance was ‘perpetually hampered by the capricious manner’ of the elected members. 66 Subsequently, the years immediately following 1903 resulted in a worse situation for Maltese representation, since the elected members consistently absented themselves from the Legislative Council, meaning that the administration of Malta was not even benefiting from the minimum input of local representatives; a predicament akin to that during the first decades of the nineteenth century, when Sir Thomas Maitland (‘King Tom’) was Governor of Malta.67 Brian Blouet aptly describes the years between 1903, when the 1887 Constitution was revoked, and 1921, when selfgovernment was granted, as a political ‘cul-de-sac’ for Malta.68 The stagnation that was rampant throughout these years (particularly the years during which the elected members did not even take their seats in the Council) delayed any progress, both constitutional and legislative, and Malta had to go through a severe economic depression, the First World War, and the Sette Giugno riots before constitutional development could take place. On 30 April 1921, the 1921 Constitution, granting selfgovernment to the Maltese people, was proclaimed. It provided for ‘the constitution of Responsible Government in Malta and its Dependencies’,69 and for a diarchic division of government, with one legislature dealing with local matters and another legislature dealing with imperial ones. The legislative branch dealing with local government was bicameral, constituting a legislative assembly and a senate. The latter consisted of seventeen members – ten of these members represented specific classes, such as the University, the Chamber of Commerce, the nobility, and the clergy; while seven members were elected by the electorate at large, which consisted of males of and over the age of 35 who satisfied certain property qualifications.70 The legislative assembly was made up of 32 elected 66

House of Commons, Further Correspondence Relating to the Political Condition of Malta (Cd 1660, 1903) 81 67 Claire Bonello, ‘Malta, Britain, and the 1903 Constitution’ (MA dissertation, University of Durham 2012) 72 68 Blouet (n 12) 161 69 Malta Government Gazette, 4 May 1921, 319–51 70 Cremona (n 64) 23–36 110

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members, elected by the principle of proportional representation, as opposed to the First Past the Post electoral system that had been introduced with the 1887 Constitution. The assent of the Governor was still required for any bills passed by the legislature that had been created by virtue of the 1921 Constitution and, in some special circumstances, the Sovereign in Council needed to give his assent. 71 Overall, the functioning of this Constitution can be said to have been more effective than that of the 1887 Constitution, with the 1921 Constitution being described as having functioned with ‘comparative smoothness’ for a few years at least, until the late 1920s.72 Moreover, in contrast to the scenario during the period between 1887 and 1903, it has been observed that ‘the local dominant classes never stepped further than their limits of jurisdiction. In the first four years, at least, these classes were content to have their control over domestic affairs assured’.73 However, constitutional progress still had a long way to go for British Malta. In the years immediately following the proclamation of the 1921 Constitution, one could observe the ‘polarisation of society into two main blocks [sic]’ (that is, the working masses versus the ruling classes).74 This is a clear confirmation that the new Constitution did not bring with it an end to political difficulties in British Malta.

Conclusion

In June 1900, Joseph Chamberlain made a very telling declaration in official correspondence: ‘I would have never granted representative government to the Maltese people but it is a strong thing to take it away and we cannot do it without a very clear case. My policy is to give the Maltese agitators all the rope possible.’75 The revocation of the 1887 Constitution in June 1903 was thus 71

ibid 30 ibid 36 73 John Chircop, ‘The Left Within the Labour Movement 1921-1933’ (BEd (Hons) thesis, University of Malta 1987) 2–7 74 ibid 75 Chamberlain min 3 Aug 1900 on Grenfell/Chamberlain, 22 June 1900, CO 158/332 72

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almost inevitable when one considers all the forces that existed against the Constitution’s success. This article has given an overview of the legal and constitutional development that occurred in Malta at the turn of the twentieth century, more specifically: during the period between 1887 and 1903, and the years that immediately followed. Particular attention was devoted to the 1887 Constitution, what it represented, and how it worked, as well as the legislation that was enacted under it, and the circumstances in which the legislative process in Malta was trying to function. The amount of legislation enacted under the 1887 Constitution versus the constitutional progress granted in 1887 was a key element that emerged in relation to the period, since the legislative process and the constitutional process could almost be described as having been moving in opposite directions, considering the stagnation that existed. Notwithstanding the stagnation and other factors that hindered legislative progress during this period, a number of legislative enactments were introduced that can be considered legislative hallmarks. These include legislation relating to health and sanitation, criminal laws, and mortmain law, and several of these have had significant repercussions on the development of Maltese law in general, as well as on the state of the Maltese statute book in the present day. The significance of the use of primary legislation was also discussed, as was the importance of issues relating to money and projects that were important to British imperial policy, and how these affected Maltese legal development. Another feature of the period between 1887 and 1903 in relation to legal development is the discrepancy between law and its application, and this is a highly relevant revelation that must be given its due importance at every point in time, for anyone engaging with law and/or administrative policy. History is a vital tool with which past, present, and future policy and legislative development can be assessed. It would be imprudent to ignore the lessons that can be learnt from history, and this is especially so, in this context, for lawmakers, policymakers, and other stakeholders living and working in Maltese society.

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QUO VADIS PARLIAMENTARY AUTONOMY? REVISITING OF THE MALTESE PARLIAMENTARY STANDING ORDERS ANĠLU FARRUGIA AND CLIVE GERADA

_______________________________________________________ Hon Dr Anġlu Farrugia LLD M. Jur (magna cum laude) has assumed office after being elected Speaker of the House of Representatives, Parliament of Malta, during the first sitting of the Twelfth Legislature on 6 April 2013. Dr Farrugia first entered Parliament in 1996, and was re elected in 1998, 2003 and 2008. Between 1998 and 2008, Dr Farrugia was the Shadow Minister for justice. In June 2008, he was elected as the Labour Party’s deputy leader responsible for parliamentary affairs and served for five years as the Opposition’s shadow minister on employment and workers’ rights. Dr Farrugia was chairman of the standing committee of the house for the consideration of bills between 1996 and 1998 and an ad hoc member between 1998 and 2013 on the same committee. Between 1996 and 2008, he was also a member of the Privileges Committee of the House of Representatives. Dr Farrugia has travelled abroad on a number of EU and OSCE missions as an international observer during the holding of various elections, including the ones in Georgia (1999), the Presidential Election in Palestine (2004) and the US Presidential Election in 2004. In 2014 Dr Farrugia was decorated with the Grand Cross of the Order of Honour (Greece) by the President of the Hellenic Republic His Excellency Karolas Papoulias. Dr Clive Gerada was educated at GF Abela Junior College, Msida and subsequently graduated with a Doctor of Laws in 2014 from the University of Malta on his successful completion of a doctoral thesis entitled 'Standing Orders and Parliamentary Democracy'. Dr Gerada was admitted to the bar a year after and currently works within the Legal Unit of the European Union Secretariat, Office of the Deputy Prime Minister)of the Ministry for European Affairs and Implementation of Electoral Manifesto. Dr Gerada formed part of the Għaqda Studenti tal-Liġi (Law Students’ Society) for three successive years: as Publications Officer (in charge of the editorial board which published Id-Dritt Volume XXII); Secretary General and President. In March 2014, Dr Gerada contested the Kunsill Studenti Universitarji (KSU) elections as President, representing the University student organisation PULSE. Dr Gerada is currently reading an MA in European Union Law at Kings College London.

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Introduction

The Maltese Standing Orders date back to the first Legislative Assembly of 1921. Throughout the past ninety-two years of Parliament life,1 practice has changed considerably, nonetheless, the Standing Orders (herein referred as ‘SOs’) are remindful of the first rules of 1921. The recent publication, ‘The Speakers' Rulings (1921-1924)’, outstandingly penned by Prof Raymond Mangion, and the first publication of ‘Is-Sedja Titkellem’, a collection of rulings concerning the twelfth legislature, has underlined vehemently and resurrected the imminent necessity to revise the SOs of Parliament in a comprehensive fashion. The objective of this legal article is to analyse some of Standing Orders which are essential in Parliamentary Procedure and to shed light on the ever evolving discussion of Parliament Autonomy. This legal expose illustrates a number of recommendations which aim at strengthening Parliamentary Democracy.

Parliamentary Democracy

Different interpretations of parliamentary democracy have been coined due to its different connotations. For the purposes of this article, Parliamentary democracy shall be used to encapsulate the role of Parliament as an elected body of representatives, chosen freely by citizens to represent them in the House. This institution is tasked with making laws for the peace, order and good government of Malta in conformity with full respect for human rights,2 whilst acting as one of the main agents for preserving democracy. Furthermore, parliamentary democracy should also be viewed in light of the citizens’ right to choose their preferred political party, 1

The author uses the words House and Parliament interchangeably to refer to the Legislative Organ; Important to note that the Maltese Constitution defines Parliament as the House of Representatives together with the President of the Republic. The term Parliament has been used by colloquially by politicians, in debates of Parliament and rulings of the Speaker, always referring to the term House of Representatives. 2 Constitution of Malta, article 65 114

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which eventually would form the Government. Hence, Parliamentary democracy3 refers to the manner in which the rights of MPs belonging to the minority party and those belonging to government back-benchers are safeguarded. At the same time it sees to the according of proper means in order to facilitate the implementation of the Government's legislative programme, chosen freely by the will of the majority of citizens.

Sources of Parliamentary Procedure

Parliamentary procedures have mostly originated during the period when the Commons' regarded itself as an opposition to the Crown. As a result, the Commons' devised ways of ‘checking and controlling the actions of the Ministers’.4 However, in present times, Crown Ministers enjoy the support of the majority of the Commons', since the Executive organ of the State emanates from the side of the House having majority of seats resulting from the Westminster System of Parliamentary Government. 5 Ergo, today's purpose of these rules is to ‘safeguard the rights of a minority of the House: to guard against the development of an ‘elective dictatorship’.6 There are different kinds of rules of procedure that ultimately derive from different sources, nonetheless, these are considered as important tools in ensuring the smooth running of the institution and preservation of parliamentary democracy. The rules of procedure are derived ‘from practice; from standing orders and ad hoc orders and resolutions; rulings from the Speaker; and from the statute’.7 Standing Orders are considered as the ‘second main basis of procedure’.8 It is imperative that these procedural rules are to be

The author arrived to this definition after gaining a holistic knowledge from the debates and rulings of the Speaker, legal literature such as Erskine May. 4 CJ Boulton (ed), Erskine May’s, Treatise on the Law, Privileges, Proceedings and Usage of Parliament (21st edn, Butterworths, London 1989) 1 5 ibid 6 ibid 7 ibid 2 8 ibid 3 115

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read in conjunction with the Speaker's rulings. The Speakers rulings are described as ‘the principal source of modern practice’. 9

The Standing Orders of Malta's first Legislative Assembly 1921

Following the granting of a qualified responsible government to Malta and the establishment of the first parliament in 1921, the ‘Letters Patent’ of 1921 laid down that: The Senate and Legislative Assembly in their first Session, and from time to time afterwards as there shall be occasion, shall each adopt Standing Rules and Orders.10 The first draft Standing Orders of the 1921 Legislative Assembly were drawn up by Malta Crown Advocate, Sir Michelangelo Refalo, later Chief Justice. 11 It is believed that Sir Refalo consulted the Rules of the Lower House of Transvaal.12 This first draft was adopted by the 1921 Legislative Assembly until a Select Committee, made up of the leaders of the political parties in the House, namely Strickland for the CP, Mizzi for the PDN, Dr Pier Giuseppe Frendo for the LP and Salvatore Borg Olivier for the UPM, amended or adopted the same draft. 13 The draft SOs of the Select Committee were debated and approved in the Legislative Assembly, subsequently approved by the Governor on the 13th March 1922. Needless to say, the back-bone of the approved SO's emanated from the SO's of the Commons’ experience, in fact the text of many of the 1922 SO's corresponded to the text of Erskine May's edition of 1917. It is however, worth noting that the Maltese 9

ibid 5 Raymond Mangion, Speakers Rulings in the Parliament of Malta: the Legislative Assembly 1921-1924 (1st Volume, Part one, Malta University Press, Malta 2012) xxix - xxx 11 Godfrey Pirotta, Malta’s Parliament- An Official History (1st edn, Office of the Speaker of the House of Representatives Malta, Malta 2006) 65 12 Mangion (n 10) xxix - xxx 13 ibid 10

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legislators had sought to ingrain the terse Maltese parliamentary experience within the said rules.14 Yet, the British Parliamentary experience has had a big effect on Commonwealth countries especially in relation to parliamentary procedure. This could also be said in relation to the British influence on the Maltese parliamentary procedure where such influence is still reminiscent in the provisions of our SO's. In fact, Standing Order 197 establishes that: In all cases not provided for by these Standing Orders, resort shall be had to the rules, forms, usages and practice of the Commons' House of Parliament of the United Kingdom, which shall be followed as far as they can be applied to the proceedings of the House, with due regard to the special nature of the Constitution.15

Development of the Maltese Standing Orders throughout the years

Prior to the third legislature, 1927 - 1930, only few amendments were made to the SOs of the Legislative Assembly. It was only during this legislature that a large number of amendments and additions, touching on procedural rules, were brought forward. 16 Among the proposed changes, the Legislators sought to expedite the debate on the Reply to the Speech from the Throne. Other amendments, related to the rule of quorum where the government had proposed that sittings should proceed unless ‘it shall appear, on notice being taken or in the report of a Division of the House, that a quorum is not present’. Furthermore, Government also proposed that ‘on days reserved for government business, the government may arrange such government business, whether orders of the day or notices of motions, in such order as they may think fit’.17 Further 14

ibid Standing Orders of the House of Representatives Order, Subsidiary Legislation 0.02 16 Pirotta (n 11) 92 17 ibid 93 15

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amendments related to procedures when the Estimates where being debated such as: the length of time of the speeches of the MPs inter alia. The Opposition, at that time, had argued that the new Standing Rules would give a great deal of power to the majority party to decide issues and suspend rules to suit its agenda. 18 In fact, the Strickland administration had successfully proposed these amendments with the aim of ‘minimising obstruction and give the government greater control of the parliamentary time-table’.19 During the Fourth legislature, from 1932 to 1933, ‘the new PN government, like the previous Strickland administration in the Legislative Assembly, was not prepared to allow any obstruction from the minority in Senate’. 20 Inter alia, the PN Government had proposed the following: - Motions proposed by the Government and considered urgent by the House would be regarded as not needing any notice; - Independently of whether or not there was a unanimous consent of the Senate, a bill or act may pass through all its stages in one sitting of the House; - Every Standing Order of the Senate could be suspended by a Motion, of which notice has been given in advance, if that motion receives the support of the majority; 21 Following World War II, the 1921 Constitution was withdrawn by the British Government Parliament was dissolved, and a Council of War was established in 1939. And in 1946, Sir Luigi Preziosi, Chairman of the National Assembly, presented Sir MacMichael with the draft Constitution.22 A Select Committee was set up in order to examine the Standing Orders and to revise the said rules.23 The full report of the Select Committee was brought before the House in 1949. However, since other MPs who had not been part of the Select Committee also wanted to propose amendments of their own, the debate in Committee was immediately adjourned.24 18

ibid ibid 97 20 ibid 21 ibid 98 22 ibid 104 23 ibid 109 24 ibid 19

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During the fourth post-war Parliament, that is, from 1953 to 1955, the government’s work had grown considerably, causing an increase in the business being transacted within Parliament.25 The government of that day brought forward a number of revisions to the Standing Orders of the House, touching upon the issues of quorum; adjournment and closure; financial business; and Divisions taken in the House.26 As a result of the 1964 Independence Constitution our political history saw the birth of a new sovereign Parliament. Nonetheless, it appears that the Standing Orders of the House of Representatives kept their form and substance throughout the years until the present day, albeit particular additions which occurred in 1995, which saw the emergence of Standing and Select Committees.

Selected Standing Orders – essential to Parliamentary procedure

This section evaluates a number of selected SOs in light of their effect on Parliamentary democracy and how these are applied in practice. The selected SOs were chosen after a detailed examination of the parliamentary debates, and Speakers rulings during the period of 1988-2013. Furthermore, the selected SOs have special importance in parliamentary procedure and possess a vital link with the maintenance of democracy within Parliament. For the purpose of this section, the selected SOs shall be categorised into a number of appropriate sub-headings. 6.1 Days of sittings Paragraph 1 of SO 8 establishes that the House shall meet at 5 pm on Monday and Thursday of each week (except on public holidays) and on such other days and at such other hour as the House may from time to time determine. Nonetheless, the House can circumvent this provision by laying down different days of 25 26

ibid 128 ibid 119

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sittings, since the provision starts in a negative way with the words ‘unless the House otherwise orders’.27 This means that the House may direct that meetings be held on days other than those which are found in the SO's. This is carried out by motions of procedure introduced by the House, generally at the beginning of each legislature.28 Additionally, SO 8(1) also provides that the Speaker may upon grounds of urgency appoint a meeting of the House. 29 Paragraph 2 of SO 8, establish that private members business shall have precedence over Government business on every alternate Thursday sittings of the House. This means that private membersGovernment back-benchers30 and MPs of the Opposition partyshould be able to propose the business of every alternate Thursday. This provision is of great importance to Parliamentary democracy, especially in relation to safeguarding the rights of private members and the opposition party to propose their own business on specified days, giving each and every MP the opportunity to propose business which will prevail over the business of Government. 6.2 Rules of debate 6.2.1

Addressing the Speaker

A simple rule which is essential in maintaining decorum and respect towards the institution of Parliament is that ‘every member desiring to speak shall rise in his place and addressing himself to the Speaker or the Chairman as the case may be’. 31

Standing Orders of the House of Representatives Order, rule 8(1) Motion of Procedure of the House of Representatives, 26th January 2009 (No 78) <http://www.parlament.mt/motiondetails?mid=82&l=1&legcat=7> accessed 26 October 2014 29 The sitting of 27 July 1988 was urgently called by the Speaker after he had received a letter from the Premier requesting an urgent sitting of the House of Representatives to approve the Bill which was intended to consolidate and reform the law on Education in Malta. After taking into consideration the letter and its implications, Mr Speaker Hon Jimmy Farrugia, held that this was an urgent matter of public importance. On this ground Mr. Speaker appointed the urgent sitting. 30 Those members of Government who are not part of the Executive 31 Standing Orders of the House of Representatives Order, rule 45 28

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6.2.2

Maintaining the Cut and Thrust of Debate 32

A Member shall not read his speech, but may refresh his memory by reference to notes.33 Members should refrain from reading entire speeches. Furthermore the speeches of successive speakers must to some extent meet the argumentation of earlier speeches. Nonetheless, this rule does not prohibit an MP from reading reasonably short extracts or quotations from documentation to strengthen an argument. The aim of this rule is to maintain a flowing debate, however, it seems that in relation to opening speeches and ministerial statements, such as matters relating to foreign affairs, or matters relating to agreements with outside entities or highly technical bills inter alia, the rule is less adhered to since these cases necessitates special precision.34 6.2.3

Time-Limit

SO 49 establishes that during a debate in the House, an MP shall not speak for more than forty minutes at a time. Except when there is a direct motion of want of confidence where the MP shall be at liberty to speak for one hour.35 However, this rule shall not apply when: (a) Minister delivering the Financial Statements, or to the Opposition Leader or any MP deputed by him to speak first in reply to such a statement, who shall each be at liberty to speak for one hour and a half; (b) an MP moving the second reading of a bill, or to the Premier or to the Opposition Leader or any MP deputed by them respectively to speak first in reply to such motion, who shall each be at liberty to speak for one hour and a half; (c) an MP who moved a motion shall not exceed half an hour in the case that a speech in reply is permitted. Furthermore, where the House gives consent, an MP may be heard for a further period not exceeding thirty minutes.36 32

Boulton (n 4) 366 Standing Orders of the House of Representatives Order, rule 47 Boulton (n 4) 366 35 Standing Orders of the House of Representatives Order, rule 49 36 ibid, proviso 33 34

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6.3 Quorum Stading Order 11 provides that if the House does not consist of a quorum, the Speaker shall adjourn the House, without question put to the MPs, until the next sitting day. A quorum of the House shall consist of fifteen members besides the person presiding at the sitting.37 Calls for verification of the quorum arise when any MP who is present draws the attention of the person presiding at the sitting, to the absence of a quorum. The person presiding then proceeds to suspend the sitting for an interval of five minutes to give opportunity to those MPs who are in the building but not present in the House to enter.38 The aim of this provision is not one which intends to discipline absent MPs neither is it there to ensure attendance of Members. However, this provision has a more intrinsic link with parliamentary democracy; President Emeritus Dr. Ugo Mifsud Bonnici said that the rule of quorum ensures that a small group of MPs, which happen to be present in the House, would not be able to take any decisions, by surprise, which the majority of MPs in the House do not approve of.39 6.4 Parliamentary Questions A very important tool laid down by the SOs is the possibility for MPs to put questions to any minister in relation to public affairs or to any other MP relating to any business of the House for which such minister or MP is responsible.40 This rule plays along with the responsibility which parliamentary democracy imposes on the Opposition party: to scrutinise the Executive organ of the State. MPs, however, have to abide by a number of procedural rules when making use of PQs, such as: the parliamentary question shall not publish any name or any statement which is not strictly necessary to make the question clear;41 in case a statement is made 37

Standing Orders of the House of Representatives Order, rule 11(2) ibid, rule11(1) 39 Ugo Mifsud Bonnici, ‘Report on the Standing Orders of the House’ (Select Committee on Strengthening of democracy, 2001) 11 40 Standing Orders of the House of Representatives Order, rule 26(1) 41 ibid, rule 27(1) 38

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the member asking is responsible for the accuracy of the statement;42 MPs must avoid drafting questions containing arguments, opinion, inference, imputation, epithet or ironical expression;43 a question shall not relate to the proceedings in a committee if such proceedings have not yet been placed before the House by a report from the committee.44 Furthermore, questions must not ask for an expression of opinion or solution of an abstract legal question or about a hypothetical proposition. 45 Questions should only ask about the official or public capacity of the person. 46 A question reflecting on the character or conduct of any person whose conduct can only be challenged on a substantive motion shall not be asked;47 a question making or implying a charge of a personal character shall be disallowed;48 a question fully answered cannot be asked again.49 6.5 Adjournment on matters of definite urgent public importance, under SO 13 This refers to that type of adjournment on matters of definite, urgent and public importance. Such motion cannot be made unless an MP at the commencement of business rises in his place and state that he asks leave to move the adjournment of the House for the purpose of discussing a definite matter of urgent public importance.50 In raising such a motion, the MP shall state the matter and deliver to the Speaker a written statement on the subject to be discussed.51 Before admitting such an adjournment, and thus proceeding to commence a debate on the urgent matter, the Speaker must be satisfied that the matter fulfils the necessary elements defined in the

ibid, rule 27(2) ibid, rule 27(3) 44 ibid, rule 27(4) 45 ibid, rule 27(5) 46 ibid, rule 27(6) 47 ibid, rule 27(7) 48 ibid, rule 27(8) 49 ibid, rule 27(9) 50 ibid, rule 13(1) 51 ibid 43

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provision of SO 13. In other words, the matter or issue to be discussed satisfies the following: 6.5.1

Definite

Looking at the Rules of Procedure and the Speaker's directions of the Lok Shaba, the Indian Lower House the definition of 'definite' is described as follows: An adjournment motion is not admissible where the facts are not settled or unless it relates to some precise recent action or omission of the Union Government. Notices about threatened strike or likely dislocation of a service or about a situation which has not actually arisen are inadmissible.52 6.5.2

Public Importance The importance of the matter should warrant interruption of normal business of the House. It should be a larger issue than a merely individual or local grievance. It should be a question of general public concern.53

6.5.3

Urgent54 A matter is deemed to be urgent only if it has arisen suddenly or is in the nature of an emergency. It should not be a continuing matter. The urgency should be such that the matter brooks no delay.55

--, ‘Paper on how the adjournment motion is carried out in the Indian Lower House- Rules of Procedure and Conduct of Business in Lok Sabha and Direction 2 (vi) of Directions by the Speaker’ <http://164.100.47.132/LssNew/abstract/adjournment_motion.htm> accessed 13 May 2014 53 ibid 54 Standing Orders of the House of Representatives Order, rule 13(1) 55 ibid, rule 51 52

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The Speaker has great responsibility under the terms of this SO, he must use his discretion with regard to the aforementioned elements before granting or denying such motion of adjournment. 56 This great responsibility arise from the fact that if this motion is permitted the ‘business of the National Assembly is interrupted at a particular stage to discuss the matter. Because of this potent effect of the rule, disrupting the nation’s legislative business, its cautious application is mandated by the rules which have grown up around its application’.57

Revisiting Parliamentary Standing Orders

The need for a complete overhaul to our SO's is a must in fact this has been the aim for many speakers throughout the years. In fact, Mr Speaker Anton Tabone, way back in 2000, commissioned a report for the revision of the SO's. However, since a long time has elapsed from the drafting of this report, though in its majority still remains valid it is however important to instil new rules which in particular provide for the challenges posed by the influx of EU level legislative implementation. In his speech, Mr Speaker, held that in light of this essential need he was appointing President Emeritus Dr Ugo Mifsud Bonnici, to revisit the SO's of the House of Representatives, with the aim that: din ir-reviżjoni twassal għal andament aħjar taxxogħol parlamentari.58 The rules do not adequately protect the rights of the minority in the House. This consequently leads to a situation where the party in Opposition occasionally tries to put pressure on the government

Mifsud Bonnici (n 39) 14 Ralph Ramkarran, ‘The Adjournment Motion’ (Conversation Tree, 2009) <http://conversationtree.gy/the-adjournment-motion/> accessed 2 April 2014 58 Mifsud Bonnici (n 39) 1; Translation: The revision of the standing orders will better the parliamentary work 57

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by prolonging debates and applying greater attention to the manner how parliamentary procedure is applied.59 On the other hand, the party having majority in the House, prevails with the majority of votes and for that party to accomplish its legislative programme it generally adopts a ‘work to rule’ measure, which in turn negatively affects the efficiency and prestige of the highest democratic institution- Parliament.60 7.1 Quorum in need of a radical change? As it happens quite often in practice, the Opposition party seeks to resort to this rule with the intention of stalling the business of the House, put on the agenda by the Government. This frequently happens when the Government and Opposition are not on good terms, for instance the Opposition would want to move a particular topic on the agenda of the House but Government seeks to postpone. Thus, as a form of protest the Opposition would resort to apply this rule for all the wrong reasons that is, to disrupt the business of the House. It has been suggested that quorum should be abolished all throughout, except in case of a division, thus, following the radical approach adopted in the Commons.61 7.2 Standing Order 13: A better outcome This SO is definitely an important instrument in the hands of the Opposition MPs and Government back-benchers.62 In fact this SO has been widely used in a number of scenarios and one can find a number of rulings interpreting this rule. Nonetheless, one has to note that although this SO was widely invoked during different legislatures, Speakers have seldom permitted adjournment on matter of definite urgent public importance.63

ibid 4 ibid 3 61 Mifsud Bonnici (n 39) 13 62 ibid 63 Vide C Gerada, ‘Standing Orders and Parliamentary Democracy’ (LL.D thesis, University of Malta 2014) Appendix A, Table 1 60

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SO 13 as presently written lacks the necessary punch, since this SO does not propose a vote on the matter after the issue has been thoroughly debated. In other words, the agenda has been setaside just for the sake of discussing the issue without achieving any definite result or conclusive decision. Thus, it is of great need to amend this SO in order to give this instrument a better outcome. 7.3 Standing Order 8: Opposition and Private Members' Days This provision is a far cry from what happens during legislatures. The House for a long period of time has been meeting three times a week: Monday, Tuesday, and Wednesday at 6:00pm. 64 The SO's provides that the House should meet on Monday and Thursday of each week and that private members business shall have precedence over Government business on every alternate Thursday upon which the House sits. 65 This rule has been suspended many times by different legislatures throughout the past forty years. Bringing to a halt the possibility of having a sitting on every alternate Thursday for private members business. Amending this SO is a necessity in order to ensure that private members and the Opposition have reserved days during which they can conduct their own business. It has been suggested that twenty sittings per parliamentary session66 should be allocated for private members, during which government back-benchers and Opposition members would be able to dictate the business to be discussed on those days.67 This proposal is similar to the Commons SO which provide for twenty sittings for the Opposition parties. Dr Frendo argues that: Having the parliamentary agenda at the mercy of government is not an ideal situation, and hence it is important to have fixed dates to debate private member’s bills and items tabled by the opposition. 68

Mifsud Bonnici (n 39) 9 Standing Orders of the House of Representatives Order, rule 8(2) 66 per year 67 Mifsud Bonnici (n 39) 35 68 Keith Micallef, ‘Interview with Speaker Michael Frendo’ The Independent (Malta, 28 January 2013) <http://www.independent.com.mt/articles/2013-0165

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7.4 Standing Order 197: Time to move on? Reference to the Commons' practice seems to have covered the lacunae in our parliamentary procedure. One surely would be tempted to pose the question as to whether it is time to move on. Throughout the past ninety-two years, Malta's Parliament and the Speaker have continuously cited with confidence what happens in the Commons' and what is found in the text of Erskine May, in its different editions.69 Nowadays, there seems to be an even bigger problem because throughout the past fourteen years the Commons' continuously revised their SO's, whereas those of the Maltese Parliament remained the same, albeit some small changes, thus it has lost step with the UK counterparts long time ago. 70 It is noteworthy that for the past number of years Maltese Speakers have established a number of precedents, as a result these precedents find themselves entwined in the rulings laid down by the Speaker today.71 This is an excellent evidence of how these decisions contributed to our parliamentary procedure and have formed an important ‘corpus’ 72 of vital interpretations.73 Consequently, it is suggested that the practice which has been taken place, that is Speakers making reference to preceding rulings would be formalised in the text of SO 197. Thus, before resorting to the Commons' practice in order to decide a matter, the Speaker would have to first look into the rulings of previous Speakers.

28/news/michael-frendo-gives-33-rulings-as-speaker-763756550> accessed 26 October 2014 69 Mifsud Bonnini (n 39) 3 70 UK Parliament, ‘House of Commons Publications’ (parliament.uk) <http://www.publications.parliament.uk/pa/cm/cmstords.htm> accessed 26 October 2014 71 Office of the Speaker, Is-Sedja Titkellem (1st edn, House of Representatives, Malta 2014) 72 Mifsud Bonnici (n 39) 3 73 ibid 128

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Parliament Autonomy74

Unfortunately, Malta is the only member in the European Union that has absolutely no parliamentary autonomy. Cyprus, which is a divided island, has more autonomy than Malta. In fact, a report that was drawn up by an internal commission set up by the author on 16 April 2014, shows that Malta is the only country that has absolutely no autonomy with regards to the administration of the same Parliament and other internal organisations of Parliament. Let’s take the example of Austria. According to the replies that were received by this Commission from the representatives of the national parliaments in Brussels, with regards to autonomy, Austria has a complete organisational administration and is totally distinct from the Government. The same applies with regards to the parliament’s budget, where the budget is decided by parliament in the framework of the general budget procedure and with regards to recruitment of staff in Parliament, recruitment is done by Parliament only. As already indicated, even Cyprus, a divided island, with the northern part of the island declared republic and to date a full member of the European Union following its accession ten years ago together with Malta, is considered to be an independent service, vis-à-vis the legislative power in the context of the separation of powers, but, it is not substantially independent in relation to budget and recruitment of parliamentary staff. Nonetheless this signifies that at the very least it has some form of autonomy. Malta is completely dependent on the Executive with regards to both recruitment and the budget that is allocated to Parliament in the running of administration and also with regards to the same organisation of the administrative staff. As afore mentioned, two principle functions of Parliament in a democracy are the passing of legislation and the scrutiny of the Executive. However, in order to ensure that these functions are performed in the most effective manner, it is imperative that Parliaments have access to adequate independent and unbiased facilities in order to enable members to For the purposes of this section (Parliament Autonomy) the term ‘author’ shall refer to the Hon Mr Speaker Anġlu Farrugia. 74

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perform such functions. This necessitates the non-dependence and the non-subordination of parliament in relation to the same Executive and it is duty bound to hold the latter to account. Here the concept of having an autonomous structure independent from the Executive has long been felt and commented on. In fact, there where two other proposals before the author’s report of this internal commission, which was drawn up on the 16 April 2014, where one of the proposals addressed the issue of strengthening the autonomy of the House of Representatives which was commissioned by the then Speaker Anton Tabone way back in 2005, that is, close to ten years ago. In September 2012, a White Paper addressing the Maltese Parliament, ‘More autonomy more accountability,’ was presented by the then Deputy Prime Minister Tonio Borg. Of course these are two key documents which were also taken into account in the preparation of the author’s report with regards to the report of the Commission on Administrative Autonomy for the Maltese Parliament which the author, as Speaker, presented in Parliament on the 21 May, 2014. In the author’s speech on the 6 June, 2013 in occasion of the Sette Giugno commemoration, the author contended: Parliament can never be free and unshackled unless it is no longer considered administratively as a Government department. Parliamentary authority and autonomy, though different, are intrinsically linked to each other. To achieve an active parliamentary democracy we should not be afraid of taking the next step towards an autonomous Parliament. We need to proceed from words to facts. It is my pleasure as President of the House of Representatives to note that today this principle is accepted by everyone, including both political groups within the Maltese Parliament. 75 On the occasion of the 90th anniversary of the Amery Milner Constitution, Prime Minister Joseph Muscat 76 in his speech to the House said that he was in favour of parliamentary autonomy. This tallied perfectly with the report that was commissioned by the author 75 76

Sette Giugno Speech 2014-12-29 At that time Leader of the Opposition 130

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bringing about a historic junction in the history of the Maltese Parliament. The yearn for a more autonomous parliament shall also be reflected in more practical terms now that the process of migration to the new parliament building shall take place in the coming weeks. The new parliament renders the building in its entirety completely independent from any other infrastructures or buildings which cater for other important authorities in Malta such as the President of the Republic. This in itself is an important step where for the first time Parliament will be housed in its own building and it is a unique opportunity for Parliament itself to radically review its operational and administrative structure and thus, to bring it in line with national parliaments in mature democracies, especially with national parliaments within the European Union. There are various models of how an ideal parliamentary autonomy may be achieved, however, the best definition of autonomy emanates from the interparliamentary union, parliament and democracy in the 21 century, a guide to good practice, which clearly states that it is now becoming widely accepted that parliaments should be independent of the Executive in the way they organise themselves and that the implementation of the principle of parliamentary autonomy in practice involves a number of different aspects which include the organisation of its own business, the parliamentary responsibility for its own staffing and the absolute control of its own budget.77 These requirements are also supported by benchmarks set by at least four other international parliamentary organisations as reproduced in the report of the Office for Promotion of Parliamentary Democracy (herein referred as the ‘OPPD’) of the European Parliament which is the benchmarking for parliaments self-assessment or minimum criteria published two years ago in 2012. This is based on the international organisations like the Commonwealth Parliamentary Association, the Parliamentary Confederation of the Americas, the Assemblée Parlementaire de la Francophone and the Southern African Development Community.

See Inter-Parliamentary Union (IPU) Parliament and Democracy in the Twenty First Century: Guide to Good Practice 131

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Principally all the four international organisations are based on two important principals, those the institutional autonomy should have: (1) Legislative control over its own staff; and (2) Legislative approval of its own budget. The current situation, of course, is that none of this exists. Today, the Maltese Parliament as it is to date, does not have control over its own budget and does not have control over its own staff. The Parliamentary employees are all public service employees. In fact, if reference is made to the state of affairs as required by article 64 subsection 2 of the Maltese Constitution, one finds the following: The Office of the Clerk to the House of Representatives and the offices of the members of his staff shall be public officers. This contrasts very clearly with two independent officers of Parliament that are answerable to the Speaker, that is, the Ombudsman and the Auditor General, who both however, manage their own staffing and recruitment. Reference to the extract from Second Schedule Part I of the Auditor General and the National Audit Office Act,78 provides: The Auditor General shall appoint such number and such classes of officers at the National Audit Office as he make consider necessary to assist him in the discharge of his own functions according to law, and such officers shall be appointed on such terms and shall enjoy such remuneration as the Auditor General may determine. The same applies, of course, as already mentioned in relation to the case of the Ombudsman, and if reference is made to extracts from article 10 of the Ombudsman Act,79 the following is stated: Subject to the provisions of the Constitution, and of any other enactment applicable thereto, and subject to the provisions of this article, the Ombudsman may appoint such officers and employees as may be 78 79

Chapter 396 of the Laws of Malta Chapter 385 of the Laws of Malta 132

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necessary for the carrying out of the functions, powers and duties under this Act. As afore contended, the present situation in the Maltese Parliament is that all recruitment has to follow service-wide regulations and procedures, which means that the creation of new positions or calls for applications require the approval from the Ministry of Finance and the public administration HR office, known as PAHRO. The limits of parliamentary ability to recruit Parliament staff are non-existent and this is a clear case in point where the support services have to be in the hands of Parliament because Parliament itself should know how it should support, for example, various parliamentary committees requiring consultancy services on particular issues. The same applies to the budget. Every year, as it is today, a draft budget plan is prepared by the Speaker’s office through the Office of the Clerk of the House, which is submitted to the Ministry of Finance so that it will be included in the general estimates which are eventually voted upon by Parliament. However, there are no guarantees that the amounts requested by the Speaker’s office in the running of the Parliament are actually allocated. This situation contrasts very clearly and strongly with two independent offices of Parliament those of the Ombudsman and the Auditor General. Another criteria which is never referred to as an important criteria, but which in fact is a very important aspect in making Parliament more autonomous tramite which, this institution becomes more transparent, is the introduction of having a parliamentary channel in our parliament, so as to permit the public itself to scrutinise Parliament and ultimately make it more autonomous by rendering more transparent the manner and way in which the institution is run. The lack of administrative autonomy is itself one of the obstacles that have made it always difficult for Parliament to make use of this medium to improve public awareness about what is being discussed by its very own elected representatives. Following the introduction of Radju Parlament in 1995 with an aim to broadcast plenary debates, the author introduced the audio-web streaming in all parliamentary committees. This was launched in 2012 in one parliamentary 133

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committee- the House Business Committee. However, following the author’s presidency in April of 2013, this system was introduced in all parliamentary committees. The next step in achieving a complete parliamentary autonomy through increased transparency would involve the introduction of a parliamentary TV channel – at the time of publication of this journal; the Office of the Speaker would have signed agreements with two local broadcasting companies. The plenary session is scheduled to be video-streamed as from the first sitting in the new parliament building. 80 These three requirements would lead to a true autonomy, as the institution would have the full control of the administration, full control of the parliamentary budget and furthermore have increased latitude in making Parliament more transparent to such an extent of having the liberty to introduce a parliamentary TV channel since there would be no hindrance from third parties. The afore mentioned recommendations as contended in this article are also the main recommendations that emanate from the report of the Commission on administrative autonomy for the Maltese Parliament, which the author presented to Parliament together with its various proposals. 81 These recommendations also address the role of the Speaker, mainly the requirement of having a Constitutional amendment based on article 23 of the draft bill82 presented with the report, whereby it is provided that when no person is appointed to perform the functions of acting President, the Speaker, being an elected body in the highest institution of the country, that is, Parliament, would be and ex lege so appointed. The Commission also concurs with the arguments put forward in page 37 of the White Paper in support of the proposed Constitution amendment: The first proposal that when no person is appointed as acting president, then ex lege the Speaker shall assume the office of the acting president.

The author is hopeful that the first sitting shall take place on the 4 of May 2015. Parlament ta’ Malta, ‘Report of the Commission on Administartive Autonomy for the Maltese Parliament’ (21st May 2014-12-29) 82 ibid 25, Annex C, Draft Parliamentary Service Act composed of 21 articles 81

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As things stand today article 49 of the Constitution allows the Chief Justice to assume such role. The author believes that the presiding officer of an elected body ought to be privileged in this regard. Moreover, without prejudice to other reasons, the authors argue that since a present or past judge is ineligible to occupy the office of president during his or her lifetime how can one assume ex lege the office of acting President? One can easily refer to the current practice in other European countries whereby the temporary absence of the Head of State from the country, is fulfilled by the presiding officer of a legislative organ who assumes such role temporarily. The above is an extract from the White Paper on the Maltese Parliament, ‘More autonomy more accountability’ of 2012. In fact, recently in the rock colony of Gibraltar, Gibraltar not being an independent state, but is quite autonomous with regards to the running of its democracy, when the Governor is absent from Gibraltar, the Speaker is appointed as acting Governor. A quote from the Gibraltar chronicle, issued on the 27 December 2014, precisely communicates that the Speaker in the absence of the Governor assumes the role of acting Governor: Speaker and Mayor of the Gibraltar Adolfo Canepa is acting Governor of Gibraltar until Sunday, 4 th of January. A Governor’s statesman said that the Governor Sir James Dutton had asked Mr Canepa to fulfil the role of acting Governor from the 20th December, 2014 until 4th of January, 2015. The author quotes this example and alludes to the White Paper on the Maltese parliament, ‘More autonomy more accountability’, in light of the constitutional amendment being proposed. The White Paper addresses a residue of our previous colonists, that is, when Malta was still a colony, which was left untouched also when the Constitution was amended when Malta became a republic way back in December 1974. It is high time that local practices are in line with European practices. On the basis of this report and recommendations, the Commission proposed a Bill, an Act to provide for the establishment of parliamentary services and to provide for methods consequentially and ancillary thereto, which is also attached to the 135

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report as Annex C. This Bill has been now in the hands of the two groups, that is, the Government and the Opposition, for over eight months and hopefully this Bill shall soon be discussed in Parliament, so that Malta will have its own parliamentary services completely independent from the Executive. The author confesses that there were developments, namely in the recent reading of the Budget Speech 2014/2015 by the Minister of Finance Hon Edward Scicluna, where precisely in page 148, an entire page is dedicated to parliamentary administration of the Maltese Parliament, clearly states the following: Iż-żewġ funzjonijiet prinċipali ta’ Parlament f’soċjetà tassew demokratika jikkonċernaw l-għemil tal-liġijiet tal-pajjiż u l-iskrutinju tal-Eżekuttiv. L-argument li l-ogħla istituzzjoni tal-pajjiż ma tista’ qatt tkun ħielsa minn kull xkiel u rbit jekk amministrattivament tibqa’ titqies bħala dipartiment tal-Gvern, ilna nisimgħuh għal numru ta’ snin minn diversi Speakers waqt id-diskorsi tas-Sette Giugno. Fil-21 ta’ Mejju 2014, l-iSpeaker ta’ dan il-Parlament qiegħed fuq il-Mejda tal-Kamra rapport kif ukoll abbozz ta’ liġi li jaħseb biex jagħmel għall-ewwel darba fl-istorja tiegħu li l-Parlament jibda jgawdi minn awtonomija amministrattiva. Huwa maħsub illi matul is-sena d-dieħla jittieħdu lpassi legali u amministrattivi kollha sabiex l-ogħla istituzzjoni ta’ pajjiżna tissaħħaħ kif indikat firrapport u l-abbozz ta’ leġislazzjoni mħejjija millPresident ta’ din il-Kamra. B’dan il-pass, il-Parlament Malti se jingħaqad malParlamenti Nazzjonali tal-Membri Stati fl-Unjoni Ewropea li ilhom igawdu minin din l-awtonomija. The author augurs that throughout 2015 this Bill will become an Act, so as to confer Malta with a clearly and true parliamentary autonomy, such as that enjoyed by other countries in the European Union. The author moreover holds that perhaps it will be a clear case of the best parliamentary autonomy in the European Union.

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Conclusion

The 1921 SOs are still reminiscent of the present rules. Although democracy and parliamentary practice is fast evolving, few amendments have taken place throughout the ninety two years of Maltese parliament life. Such State of affairs could be improved to better serve parliamentary democracy, consequently, this legal paper proposes some amendments intended to improve efficiency of parliamentary procedure and to guarantee a way how parliamentary democracy is better achieved within a setting of Parliament autonomy.83

Gerada (n 63) 143-148

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Ivan Mifsud

QUESTIONING PARLIAMENTARY SUPREMACY OVER THE COURTS YET AGAIN IVAN MIFSUD

_______________________________________________________ Dr Ivan Mifsud graduated from the Faculty of Laws, University of Malta, in 1999 (LL.D.). He completed his Ph.D in Administrative Law (University of Malta) in 2008. After thirteen years working at the Office of the Parliamentary Ombudsman, in September 2013 he joined the Public Law Department, Faculty of Laws, University of Malta, as a Senior Lecturer. ____________________________________________________________________

Preamble

The author of this article subscribes to the view that the supremacy of the Constitution of Malta over Parliament is fact, not fiction.1 Consequently, it is submitted in this article that the Maltese Parliament must not only operate within the confines of the Constitution of Malta, but should also acknowledge this supremacy. A consequence of constitutional supremacy is that the Maltese Parliament is neither superior, nor immune to the jurisdiction of the Courts of Justice. The question of supremacy of Parliament over the Courts of Justice, was the subject of what is now a classic Maltese court judgment Mintoff vs Borg Olivier, and arose again in a recent ruling by the Speaker of the Maltese House of Representatives. The latter ruling is examined in the light of the former court judgment.

Introduction

The Maltese Constitution celebrated its 50th birthday, as Malta marked fifty years of independence, on the 21 September Kevin Aquilina, ‘The Supremacy of the Constitution of Malta: Fact or Fiction?’ (2012 – 2013) 1(3) Dike Kai Nomos Quaderni di Cultura Politico-Giuridica 5 1

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2014. This ‘Independence Constitution’2 was based for the large part on the Westminster Model, comprising the main features of the British Constitution, though certainly not all. 3 One of the differences from the British model is that the Independence Constitution allows for judicial review of acts of Parliament. 4 The issue of whether or not acts of Parliament are subject to judicial review was the subject of a court case, familiar to every Maltese who has studied Constitutional Law in the last four decades: Onorevoli Dom Mintoff vs Onorevoli Dr Giorgio Borg Olivier bhala Prim Ministru ta’ Malta et.5 On that occasion the Labour Party as the Opposition of the day6 contested the validity of the procedures adopted by the Nationalist Government when amending the Constitution of Malta. The Government of the day opposed court proceedings, claiming that the Constitutional Court lacks jurisdiction to review such matters. This notwithstanding, the Constitutional Court ruled that it has the power to review the procedures followed by Parliament when amending the Constitution. Recently, the question of whether or not Parliament had to submit to the Court’s requirements arose once more. 7 The Public Accounts Committee’s8 Chairman9 sought a ruling from the Honourable Speaker of the House of Representatives, in connection with the PAC’s intent to investigate a contract awarded to a private company, by Government.10 Government informed the PAC that 2

JJ Cremona, The Maltese Constitution and Constitutional History since 1813 (PEG Publications, 1994) 75 3 ibid 76 4 Articles 46 and 116 5 Onorevoli Dom Mintoff vs Onorevoli Dr Giorgio Borg Olivier bħala Prim Ministru ta’ Malta et, Constitutional Court, 5 November 1970, as per His Honour the Chief Justice Professor Sir Anthony J Mamo, The Honourable JJ Cremona, The Honourable J Flores, The Honourable Joseph Henry Xuereb and The Honourable A Gauci Maistre. The act in question was Act XXVI of 1970. 6 At the time called ‘Malta Labour Party’. 7 May 2014 8 Hereinafter referred to as ‘the PAC’. This is a Standing Committee of the House of Parliament, regulated by Standing Order 120E, cited at <http://www.parlament.mt/publicaccountscommittee?l=1> accessed 2 December 2014 9 The Honourable Tonio Fenech, who represents the Nationalist Party. 10 Minutes of PAC meeting number 41 (12th Legislature), held on Wednesday 14 May 2014. The meeting was attended by The Honourable Tonio Fenech (Chair), The 140

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this contract was the subject of a court action, and that the Judge had deemed it necessary to keep the contract under lock and key in his Chambers, thereby protecting commercially sensitive information; and informed the PAC, that the contract could not be produced. 11 Thus, on this second occasion, a different kind of supremacy was called into question since the Courts were not scrutinising an act of parliament; but against the power and functions of a Committee of the House of Representatives. Should the PAC obtain the documentation related to the contract in question against the will of the Courts of Justice necessarily to carry out its functions; or bow its head to the restrictions of the court as Government informed the PAC? Interestingly, this time, two political parties took the very same positions they had taken in 1970: while the Nationalist Party favoured parliamentary supremacy over the Courts of Justice, the Labour Party contended that its hands were tied. Together with Parliament itself, through the PAC, it had to respect the will of the Courts of Justice. The PAC sought a ruling from the Speaker of the House of Representatives, on whether it had to wait for the Courts Honourable Dr Owen Bonnici, The Honourable Dr Charles Mangion, The Honourable Kristy Debono, The Honourable Claudio Grech, The Honourable Silvio Schembri and The Honourable Charles Buhagiar. The minutes are publicly available at <http://www.parlament.mt/sittingdetails?sid=4657&l=1&legcat=13&forcat=4> accessed 2 December 2014 11 The The Honourable Dr Owen Bonnici, Minister for Justice, Culture and Local Government explained the situation in the following terms: ‘Hemm kawża li qiegħda tattakka d-deċiżjoni li l-kuntratt jingħata lill-Henley & Partners, għax fit-tellieqa kompetittiva li kien hemm, kien hemm bidders oħrajn, senjatament Arton Capital, li kif għandhom kull dritt jagħmlu, għamlu kawża taħt il-judicial review, jiġifieri taħt lartiklu 469A, fejn saret talba biex dan il-kuntratt jiġi esebit. Fil-fatt, il-Gvern esebixxa dan il-kuntratt fil-proċess tal-Qorti, pero hemm digriet tal-Qorti li jgħid li dan kellu jibqa’ fis-sigrieta tal-Imħallef… This is standard practice in contracts involving sensitive information ta’ natura kummerċjali allura naħseb li jrid isir riflessjoni dwar dan il-punt’. (Translation: ‘There is a court action whereby the decision to award the contract to Henley & Partners is being challenged, because in the competitive selection procedure there were other bidders, namely Arton Capital, who instituted court proceedings for judicial review under article 469A as they have every right to and a request was made for the contract to be exhibited in court. In fact, the Government did exhibit this contract in Court as part of the procedures, but there is a judicial decree which states that this is to remain in the Judge’s chambers. This is standard practice in contracts involving sensitive information of a commercial nature and I think this point should be reflected on’.). 141

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before it could do its work. The Speaker of the House of Representatives ruled on this matter, on 19 May 2014,12 finding in favour of the PAC gaining access to the contract in question, by stating that Parliament is supreme and cannot be left to wait by the Court of Justice. In this article, this ruling is legally examined, and its potential future effect on the question of parliamentary supremacy as opposed to constitutional supremacy, explored.

The Question of Supremacy: Mintoff vs Borg Olivier

Back in November 1970, the Constitutional Court confirmed a judgment of the First Hall of the Civil Court in its constitutional competence, which ruled on the issue of whether it was empowered to review the legality of an act of Parliament amending the Maltese Constitution. This entailed a review of parliamentary procedures when passing the Act in question. The Government of the day, among its defence pleas, claimed that Parliament had the power to regulate its own procedure,13 and that parliamentary procedure was not subject to judicial review except in case of a breach of a written provision of the Constitution itself. In its judgment, 14 the Court considered the situation in England, and then moved on to determine whether this applied to Malta too. The Court acknowledged that in England, Parliament is sovereign and immune, to the extent that it is not subject to review by the Courts of Justice. In this respect the Court cited prominent English authors including William Ivor The Honourable Dr Jason Azzopardi stated that ‘Il-Parlament huwa sovran, huwa suprem, huwa l-ogħla istituzzjoni tal-pajjiż u m’hemm ebda raġuni legali li toħroġ minn ebda liġi, u minn ebda kostituzzjoni tal-pajjiż li l-Parlament, f’dan il-każ ilKumitat, m’għandux jagħmel xogħolu minħabba li hemm kuntratt li ġie esebit u jinstab fis-sigriet ta’ ġudikant minħabba kawża pendent fil-Qorti’. (Translation: ‘Parliament is sovereign, it is supreme, it is the highest institution of the country and there is no legal reason emerging from any law, or from the constitution of the country deeming that Parliament, or in this case the Committee, should not do its work because a contract has been exhibited in court and is being kept in the chambers of the judge because the case is pending’.). 13 Article 68 of the Constitution of Malta, now article 67 14 Decided by the Constitutional Court on the 17 September 1970, and confirmed by the Court of Appeal on the 5 November 1970. 12

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Jennings, Albert Venn Dicey, Thomas Erskine May, and English precedent. Citations from these authorities to be found in the Mintoff vs Borg Olivier case include the following: There were no restrictions on the powers of Parliament whether on the part of the courts or any other authority, so far as the Parliament of Westminster was concerned. 15 The House is not responsible to any external authority for following the rules it lays down itself, but may depart from them at its own discretion.16 The Maltese Court, having cited the position as applicable to the UK Parliament, went on to determine whether the same position applies to Maltese Parliament. It cited Professor Dicey once again, who states that not all legislatures are ‘sovereign’,17 naming France, Belgium and the USA as examples. The American Constitution, for instance, specifically states that every Court is ‘to treat as void any enactment which violates the constitution’.18 The question therefore was whether the Maltese Parliament was as sovereign as the UK Parliament, or whether it enjoyed a lesser level of sovereignty. The Maltese Court gave reasons for deeming that the Maltese Parliament is not absolutely sovereign.19 The Maltese Court cited examples from the Maltese Constitution itself where judicial review is specifically provided for, and deemed that these provisions extend beyond the Constitution to other constitutional provisions such as Standing Orders.20 The Court then ruled that Standing Orders regulating parliamentary procedures are to be observed, though Parliament is free to amend them: the sanction for non-observance is recourse to the Courts.21 The Court agreed that Parliament regulates

AV Dicey, Introduction to the Law of the Constitution (10th edn, 1961); as cited in Mintoff vs Borg Olivier (n 5) 8 16 T Erskine May, The Law, Privileges, Proceedings and Usage of Parliament (16th edn) 60 as cited in Mintoff vs Borg Olivier, Court of Appeal, page 11 17 ibid 12 18 ibid 13 19 ibid 20 ibid 21 ibid 18 143

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its own procedures, but for so long as the procedures are not changed, they remain applicable.22 Comparison was also made with the Constitution of India, where judicial review is specifically prohibited according to the Indian written Constitution, to the extent that the discretion in the application of the same rules cannot be questioned by the Courts. 23 The Maltese Court of Appeal, in the process of upholding the judgment of the court of first instance, stated inter alia that the absence of a provision in the Maltese Constitution specifically prohibiting judicial review is further indicative of the situation in Malta.24 Having established the above, the Constitutional Court, simultaneously, acknowledged and confirmed the importance of the House of Representative, and of its Members, in retaining their independence and dignity. It even acknowledged the need for them to be able to carry out their functions. Referring to parliamentary privileges, the Court further observed that these are necessary for a legislative body to be free to conduct its duties and functions effectively, in the name of the Nation. The above was a preliminary ruling, on whether the Courts are empowered to review an act of Parliament. Having determined that the Courts do indeed possess such powers of review, the Constitutional Court25 went on to review the legislative amendment which the Opposition of the day had challenged. In its second ruling, the Court found that the Act in question was lawful and should stand. Therefore, while the government of the time lost its case to block the Courts of Justice from reviewing an act of Parliament, it ultimately won the day after the Court concluded that Parliament had followed the correct procedures when passing Act XXVI of 1970.

ibid 20: ‘Sakemm dawn in-normi ma jiġux imbiddla jew imwarrba bil-mod meħtieġ, jibqgħu jimperaw’. (Translation: ‘These norms remain applicable for so long as they are not changed or cast aside according to the correct procedure’). 23 ibid 34 24 ibid 35 25 Constitutional Court, 22 January 1971 22

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The Question of Supremacy, Once Again: The PAC’s contention over the Powers of the Courts of Justice

Forty-three years later, the question of the limits to Parliament’s sovereignty vis-à-vis the Courts of Justice reappeared. The Government insisted that it could not provide the Public Accounts Committee with a copy of the documentation it required to carry out its work, out of respect for the Courts of Justice and pending court action. This time, the question arose in Parliament, not in Court, and it was Parliament which had to rule on whether or not it was superior to the Court as to be able to continue with its business notwithstanding the pending court case and notwithstanding a court decree. The court action referred to in Parliament by the Honourable Minister for Justice had been instituted by an unsuccessful bidder, for judicial review of the award of a contract to a private company. 26 The PAC wanted to scrutinise the same contract, from a financial perspective as was within its remit. The Government claimed that it is unable to present the contract for the PAC’s scrutiny, because the Judge retained the contract under lock and key in his Chambers after decreeing that it cannot be made public. The Honourable Minister for Justice explained: Din hija kawża ta’ judicial review. Li qed ngħid jien huwa li l-Gvern huwa parti mill-kawża, hemm digriet li jorbot lill-Gvern, u allura l-Gvern irid jobdi dak iddigriet.27 In reply, the Honourable Shadow Minister for Home Affairs and National Security retorted that this position implied that the PAC would not be able to discuss this contract, until the court judgment is concluded. At a later stage he went on to state that; L-Parlament huwa Sovran u l-fatt li hemm digriet f’kawza civili fejn allura johloq stat ta’ fatt biss bejn 26

Dr Tanya Sciberras Camilleri noe vs Onor Dr Emanuel Mallia et, Application Number 1038/2013JRM 27 Translation: ‘This is a case involving judicial review. What I am saying is that Government is party to this case, there is a court decree binding Government, and therefore Government must abide by that decree’. 145

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dawk il-partijiet ma jfissirx li johloq stat ta’ fatt filkonfront tal-PAC jew tal-Parlament.28 It was agreed to seek a ruling from the Speaker, on the following matters: (i) Jekk il-fatt li bħalissa hemm digriet il-Qorti li tgħid li dan id-dokument għandu jinżamm fisSigrieta inaqqqsx mid-dritt li għandu Kumitat talKamra li xorta jitlob li tali dokument jiġi ppreżentat; u (ii) Jekk il-Kumitat dwar il-Kontijiet Pubbliċi għandux bħala Kumitat Permanenti tal-Kamra, id-dritt li jitlob għall-kuntratt imsemmi.29

The Speaker’s Ruling

With regard to question number one, the Speaker stated in certain terms that Parliament cannot be made to wait: Il-Parlament huwa suprem. Il-Parlament m’għandux u ma jistax joqgħod jistenna xi eżitu tal-Qorti biex jikkonsidra materja li huwa jħoss li tkun fl-interess tal-pubbliku li jiddiskuti. Dan huwa kif stabbilit millistess Ordnijiet Permanenti li jagħtu s-setgħa lillistess Kumitat Permanenti dwar il-Kontijiet Pubbliċi sabiex jagħmel l-iskrutinju finanzjarju fl-interess nazzjonali.30 Translation: ‘Parliament is sovereign and the fact that there is a decree in a civil case, which therefore can only have effect between the parties to this case, does not mean that it will have consequences in regard to the PAC or to Parliament’. 29 Translation: ‘1. Whether the fact that at present there is a court decree stating that the document has to be kept in the judge’s Chambers, reduces the right of the Committee of the House of Parliament to still request to be presented with the document; and 2. Whether the PAC, as a permanent committee of the House, has the right to request the mentioned contract.’ 30 Translation: ‘Parliament is supreme. It does not, and cannot, await the outcome of a court case before considering matters which it deems to be in the public interest to discuss. This is determined by the same Standing Orders which empower the PAC to scrutinise financial issues in the national interest’. 28

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The Speaker then went on to substantiate his ruling, with literature, citing Anglo-Saxon authors John Alder, Anthony Bradley, William Wade, and Albert Venn Dicey, who state the following: On the supremacy of parliament / parliamentary sovereignty, parliamentary supremacy is a term used to describe a situation where the legislature has absolute power over the laws of the land. Unless the parliament itself approves laws that bind to the same function of parliamentary sovereignty Parliament can make law concerning anything. Parliamentary supremacy means that a legislative body is supreme to all other government institutions, including any executive or judicial bodies. The courts cannot overrule its executive.31 The Ruling also cites Dicey’s Doctrine of Parliamentary Supremacy: It is a fundamental principle in a true democracy that the courts have no authority to judge statutes invalid, and that there are no fundamental constitutional laws that parliament cannot change, other than the doctrine of parliament sovereignty itself. The Honourable Speaker then observed that the Maltese court did not in any way ‘communicate’ with Parliament over this matter. He contrasted this with what happened in Uganda in February 2014 when the Ugandan Constitutional Court ruled that four individuals lost their seat in Parliament after they were expelled from the political parties they represented: Is-Sedja tinnota li fil-każ in eżami ma kien hemm lebda komunikazzjoni mill-Qorti jew xi forma ta’ digriet jew verbal li ġie indirizzat lill-istess Parlament biex dan ikun jista’ jiġi meħud in konsiderazzjoni. Dan qiegħed jingħad għaliex jista’ jkun hemm każ fejn il-Qorti b’sentenza jew anke b’digriet li tkun tat tkun qed tagħmel referenza jew komunikazzjoni mal31

Which author is being cited here, is not specified in the Speaker’s ruling. 147

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parlament kif ġara riċentement fi Frar 2014 filParlament tal-Uganda. Hemmhekk l-iSpeaker talKamra Rebecca Kdaga kellha komunikazzjoni millQorti Kostituzzjonali dwar deċiżjoni tal-istess qorti li permezz tagħha erba’ Membri Parlametari tilfu ssiġġu tagħhom fil-parlament. Dan kien każ partikolari u ċertament li hawnhekk m’għandniex din issitwazzjoni fil-każ in eżami. 32 Therefore in the absence of such an involvement of the courts in the Maltese parliamentary affairs, the Speaker saw no reason to consider the matter further.

Observations on the Speaker’s Ruling

The response to the question whether the PAC’s requirements prevail over those of the Courts of Justice, depends on the position taken regarding the extent of Parliament’s supremacy, primarily over the Independence Constitution of 1964, and consequently over the Courts of Justice. Insofar as the question of whether Parliament is supreme over the Constitution, or vice-versa, two schools of thought have emerged in recent years. 33 Judge Giovanni Bonello, former Judge of the European Court of Human Rights and renowned historian, argues that ‘according to the Constitution, Malta is a state that follows the doctrine of the supremacy of the Constitution’,34 The ‘supremacy of the Constitution starts with the legislative power of Parliament (which) Translation: ‘The Chair observes that in the case under consideration there was no decree or other form of communication from the Court to the Parliament, for it to take into consideration. This is being observed because a situation could arise where the Court, in a sentence or decree makes reference or communicates with Parliament, as occurred recently in February 2014 in Uganda. There, the Speaker of the House Rebecca Kdaga received a communication from the Constitutional Court about a decision taken by the same Court whereby four Members of Parliament lost their seats in Parliament. This was a particular case and certainly this is not the kind of situation before us’. 33 Aquilina (n1) 14 34 G Bonello, ‘Constitutional Law Obfuscation’ Times of Malta (Malta, 6 June 2012) 32

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is expressly subordinated to the overriding shackles of the Constitution and expressly limited by them’.35 According to Judge Bonello, if Parliament breaches the limits and restrictions imposed on it by the Independence Constitution, according to article 116 of the same Constitution any person may bring a challenge before the Constitutional Court. Judge Bonello also refers to article 6 of the Constitution, which states in no uncertain terms that the Independence Constitution is supreme.36 Professor Kevin Aquilina argues in favour of ‘the manifestation of the Constitution’s supremacy over Parliament’,37 while Dr Ivan E Sammut believes that ‘the supremacy of the Constitution cannot be doubted’.38 The second school of thought on supremacy, is that professed by Chief Justice Emeritus Professor Giuseppe Mifsud Bonnici, according to whom, ‘our Constitution was modelled on the lines of the British Constitution and there Parliament is supreme. And so it is with us; the only difference being that, in our case, this supremacy is watered down by the two-thirds majority rule. But nevertheless, Parliament is supreme – not the Constitution, much less our Constitutional Court’.39 Parliament possesses the ultimate power to amend the Constitution, and with the necessary support from its Members can do as it wills, amending and even replacing the Constitution. According to Professor Mifsud Bonnici, this makes Parliament supreme over the Constitution. Such supremacy does not imply that Parliament is above the law, or above the Constitution, but that Parliament abides by the Constitution until it decides to amend it. 40 Thus, if one believes, like Professor Mifsud Bonnici, that Parliament is superior to the Constitution, it follows that the Courts of Justice should not hinder the workings of the PAC. The Speaker 35

ibid Article of the Constitution states that ‘if any other law is inconsistent with this Constitution, this Constitution shall prevail and the other law shall, to the extent of the inconsistency, be void’; See also G Bonello, ‘True and faithful allegiance’ Times of Malta (Malta, 20 June 2012) G Bonello, ‘Constitution – a stretcher case’, Times of Malta (Malta, 4 July 2012) 37 K Aquilina, ‘The Constitution is Supreme’ Times of Malta (Malta,13 June 2012) 38 IE Sammut, ‘The Constitution Prevails’ Times of Malta (Malta, 6 August 2012) 39 G Mifsud Bonnici, ‘The Supremacy of Parliament’ Times of Malta (Malta, 16 June 2012) 40 See also Mifsud Bonnici G., Supremacy: ‘What is’ against ‘what should be’ (1), Times of Malta, 28th June 2012. 36

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indeed and rather dangerously, took this one step further, by citing authors such as Dicey, according to whom the Courts do not even have authority to judge a statute invalid. As seen earlier, according to the passages cited by the Speaker from the works of Dicey, the UK Parliament is not subject to judicial scrutiny. By citing Dicey, the Speaker of the Maltese Parliament is declaring that Parliament is supreme, not to the extent cited by Professor Mifsud Bonnici, who rests his theory of Parliamentary Supremacy on the power of Parliament to amend the Constitution, but beyond that, by disregarding the provisions of the Constitution which allow for judicial scrutiny of acts of the Maltese Parliament, and even overlooking history by not even acknowledging that in the past such scrutiny has actually been carried out, as in Mintoff vs Borg Olivier. Inexplicably, the Speaker qualifies this, by observing that the Court never ‘communicated’ with Parliament. This qualification, that the situation would have been different had there been a ‘communication’ from Parliament, might be interpreted as implying that if there had been such a communication between the Courts of Justice and Parliament, in other words, if the ongoing court case involved Parliament directly, then the Speaker of the House might have considered ruling the other way, that is, in favour of the Government’s position, that the documents required by the PAC could not be handed over to it. However, such a qualification does not detract sufficiently from the final position taken by the Speaker in his Ruling, which was that the Maltese Parliament is as sovereign as its Westminster counterpart, and therefore could continue its work unhindered. It is submitted that the correct position on the Doctrine of Parliamentary Supremacy over the Constitution, is that of Judge Giovanni Bonello et al. The starting point has to be that we live in a country where true supremacy lies in the Constitution, which as Dr Austin Bencini41 reminds us ‘embodies the very values which make the Maltese people a nation, a country, a community, a State and created a democracy for the Maltese based on the constitutional balance of powers of the state and the observance of the rule of law

Dr Austin Bencini is the Head of Department, Public Law Department, Faculty of Laws, University of Malta. 150

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in the name of limited government’.42 The Constitution establishes amongst other things the roles, functions and powers not only of Parliament, but also of the Courts of Justice. A balance is struck between the different stakeholders. Parliament’s role is to be respected, but on its part it must operate within the confines of the Constitution, which according to article 6 of the same, is supreme. The Courts’ powers over Parliament emerge from the same Constitution, from the Mintoff vs Borg Olivier case, which the Speaker does not refer to in his Ruling, and ironically, from the writings of Dicey himself. When comparing this Ruling with Mintoff vs Borg Olivier, it results that the Speaker’s choice of authors overlapped with that of the Courts of Justice in Mintoff vs Borg Olivier. Regrettably, the Honourable Speaker did not read into Dicey as profoundly as the Court did forty-three years before, leading the Honourable Speaker to equate the level of sovereignty of the Parliament of Malta with that of its Westminster counterpart in the UK. Acknowledging the supremacy of the Constitution implies acknowledging the limits of Parliament’s powers and also the extent of the powers of the Courts of Justice, because these are laid down in the same Constitution. Why the Speaker of the House made no reference to the Mintoff vs Borg Olivier case is questionable. It may be argued that it would not have made sense for the Honourable Speaker to turn to the Courts of Justice for guidance, precisely on whether or not Parliament and its Committees have to wait for the Courts of Justice to deal with a matter before taking it up themselves. Indeed to refer to a Court judgment might even have been interpreted as a sign of weakness on Parliament’s part, a sign even of admission that Parliament is subservient to the Courts of Justice. Seen from this perspective, it made sense for the Honourable Speaker not to refer to a court judgment in his ruling. One might even argue that the Ruling sought by the Public Accounts Committee did not, in any way, concern the courts’ power (or absence of power) to review a legislative act, and therefore it would not make sense to refer to a court judgment on such a subject. This A Bencini, ‘Uphold the Constitution’s Values’ Times of Malta (Malta, 23 June 2012); See also A Bencini, ‘Constitutional supremacy is self-evident’ Times of Malta (Malta, 26 May 2013) 42

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could be a second reason not to refer to Mintoff vs Borg Olivier: the issue at stake insofar as the Honourable Speaker was concerned, was not judicial powers to review parliamentary action, but jurisdiction of the Courts of Justice over Parliament and whether a court decree can extend in effect all the way to the PAC and hinder its work! Had the Speaker acknowledged the supremacy of the Constitution over Parliament, had he not cited Dicey so incompletely, and if he had referred to Mintoff vs Borg Olivier, there would have probably been scope for commenting on the absence of ‘communication’ between the Courts and Parliament. There would have been scope to argue that in the absence of an action scrutinising an act of Parliament, the PAC should not be hindered in its work. There would have even been scope to argue that in the absence of any court action or decree directly involving Parliament, there was no reason for hindering the PAC’s work. In other words, by acknowledging the supremacy of the Constitution, but arguing that there was no ‘communication’ between the Courts and Parliament, the Honourable Speaker could still have reached similar conclusions to the ones he did. Alternatively, had the Honourable Speaker acknowledged the limitations to sovereignty of the Maltese Parliament, but not gone into the question of whether or not there existed a communication between the Courts and Parliament, he might perhaps have found some more grounds for supporting the Government’s reluctance to hand over a copy of the contract in question to the PAC for scrutiny. However, had he taken this route, the Honourable Speaker would have also had to give more weight to the claim that there was no decree at all, a thorny and potentially embarrassing point he brushed aside when he said ‘hemm jew m’hemmx digriet’.43 Had the Honourable Speaker of the House of Representatives concluded that Parliament’s sovereignty is not at par with that of the UK, the issue of whether such a decree existed, and if so, what the Court actually decreed, would have had to be considered by the Honourable Speaker in the ruling under discussion.

Page 9 of the Ruling. Translation: ‘whether or not there is a decree’. 152

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Concluding Observations

The outcome of this Ruling results in an opportunity being lost, to cement the question of jurisdiction of the Courts of Justice, over Parliament, by the latter acknowledging that it may be subjected to Courts’ requirements. We have known for the last forty-three years that the Courts of Justice claim to have such jurisdiction over Parliament. In this Ruling, the Honourable Speaker could have confirmed Parliament’s acceptance of the Courts’ powers over it, but he chose not to. Indeed, by equating the sovereignty of the Maltese Parliament with that of its English counterpart, he has indirectly ruled that Parliament rejects the Mintoff vs Borg Olivier judgment on judicial review of an Act of Parliament. This may be of little consequence in practice insofar as the Courts and judicial review of parliamentary Acts are concerned, and certainly does not in any way cast doubt on the validity of the classic Mintoff vs Borg Olivier. If another case arises whereby the Courts of Justice are required to scrutinise an Act of parliament, the Courts of Justice would be expected to simply follow the position taken in Mintoff vs Borg Olivier. The Courts of Justice will have no reason to refer to, let alone feel bound by, the Honourable Speaker’s Ruling of May 2014. This notwithstanding, the Honourable Speaker of the House of Representatives presides over the same House, maintains order and guides it on all questions of privilege and practice.44 His rulings are binding on the House of Parliament, 45 and cited many years after they are handed down.46 What the Honourable Speaker concludes is likely to be followed by the House of Representatives, and also is to be taken as the official position of the House of Representatives. The importance of a Speaker’s ruling is thus not to be underestimated. It is precisely the Honourable Speaker of the House 44

O Hood Phillips, Constitutional and Administrative Law (7th edn, Sweet & Maxwell) 184 45 Vide for example the Standing Orders of the House of Representatives (S.L. Const.02) regulation 62, which states that a ruling of the Speaker on a question of order cannot be questioned, although where rulings on a question of order are concerned, a motion can be passed to have it reviewed. 46 This ruling itself cross-referred to rulings of the early 1970s, at page 11. 153

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of Representatives’ status, and the significance of Speakers’ rulings which makes this particular Ruling from Parliament so regrettable. One would expect the Courts of Justice and the House of Representatives to be in sync over issues such as the limits and extent of Parliamentary sovereignty, and to concur over matters of such importance. In all probabilities, neither the need, nor the opportunity, ever arose for Parliament to specifically state that it accepts the Mintoff vs Borg Olivier judgments. However, once such an opportunity presented itself, it would have been desirable for the Honourable Speaker, as president of the House of Representatives, to send out a different signal from Parliament and to not put a question mark over forty plus years of doctrine. It is also regrettable to equate the sovereignty of the Maltese Parliament with that of the UK Parliament. Yet, this is what the Ruling of May 2014 has done. This ruling truly amounts to a lost opportunity for Parliament to confirm its acceptance of its limitations to sovereignty as pronounced by the Courts of Justice back in November 1970. Things would certainly have been more clear-cut and desirable had the Honourable Speaker of the House of Representatives based his ruling on the all important, indeed fundamental, distinction between the absolute supremacy of the UK Parliament, built largely on history and convention, and the Maltese Parliament’s which although based on the Westminster Model, has a lesser level of supremacy, which emerges from a written constitution and is bound by the parameters laid down in the same written Constitution. It would have been more desirable had the Honourable Speaker of the House of Representatives, after recognising and acknowledging the Maltese Parliament’s limited supremacy when compared with that of the UK, gone on to determine the question of whether or not a court decree could hinder the Public Accounts Committee in the carrying out its functions, and whether the PAC had to wait for the court case to run its course as the Government requested. As stated earlier, this would in all probabilities have resulted in the Honourable Speaker having to determine whether the decree well and truly exists or not, with the ensuing embarrassment for Government, if it turned out that - as the Opposition claimed - the decree did not exist. However, presuming that the decree in question exists and was correctly interpreted by the Government, the 154

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Honourable Speaker might have ruled that, since the Maltese Parliament does not enjoy the level of sovereignty of its Westminster counterpart, the Public Accounts Committee must indeed suspend its planned review of the contract in question, and allow the court proceedings under way, to run their course. Alternatively, the Honourable Speaker of the House of Representatives might have made a distinction between a case of judicial review of an Act of parliament, where Parliament must accept the Courts’ authority, and this scenario where, as the Honourable Speaker himself pointed out, there was never even any form of communication between the House of Representatives and the Courts of Justice, and thus no reason for the Public Accounts Committee to be hindered from carrying out its planned scrutiny of the government contract in question. This latter position would have even been supported by the Mintoff vs Borg Olivier judgment itself, when the Courts of Justice put substantial emphasis on the rights and prerogatives of Member of the House of Representatives, which were required for them, and the House of Representatives, to carry out their duties effectively. 47 Had the Honourable Speaker not equated the Maltese Parliament’s sovereignty with that of the UK, he might have ruled against the Government, as in effect he actually did, without however making the claims to a sovereignty which, with all due respect to the Honourable Speaker of the House of Representatives, the Maltese House of Representatives simply does not have. A different ruling, based on the premise that the Maltese Parliament’s sovereignty is limited when compared with the authentic Westminster Parliament, might also have triggered off an interesting debate about the limits of the Courts’ powers over the House of Representatives. All in all, a golden opportunity has been allowed to slip away.

Mintoff vs Borg Olivier (n 5) 42 155

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JUDICIAL IMPORTATION OF ITALIAN PRIVATE LAW SOLUTIONS AND ITS IMPLICATIONS MARK A SAMMUT

_______________________________________________________ Dr Mark A Sammut studied at the University of Malta (LL.D., M.Jur. (summa cum laude), M.A.) and at the University of London (LL.M. in Legal Theory and Legal History, and Historical Sociology at the London School of Economics). He has published (with Prof. Giuseppe Mifsud Bonnici) Il-Liġi, il-Morali, u rRaġuni (iusmelitae, Malta, 2008) and The Law of Consular Relations (XPL Publishing, UK, 2010) and numerous articles in Id-Dritt (Malta), Melita Historica (Malta), Diplomazia Commerciale (Italy), and other publications. He has participated in The Mediterranean: Different Perspectives, Common Objectives (Ministry of Defence, Italy, 2010) and edited and co-authored Malta at the European Court of Human Rights (iusmelitae, Malta, 2012). The author would like to thank Drs Patrick Galea, David A Borg, and Antonio Depasquale, and Professor James Busuttil for their respective contributions in the preparatory stage of this article.

_____________________________________________________________ Il diritto è dimensione di una civiltà. Civiltà significa storia, significa un certo contesto storico in tutta la ricchezza delle sue espressioni, ed è peculiare atteggiamento dello storico [del diritto] quello di collocare il dato che ha di fronte all’interno del contesto che lo ha generato e in cui vive. Egli può e deve ricordare al privatista e al pubblicista, tutti conquistati dai proprii testi normativi, che il testo è sempre rappresentazione d’una realtà retrostante, per giunta rappresentazione parziale e artificiosa. – Paolo Grossi1 Beneath the language of a foreign Law or a foreign legal text there exists a substratum of implied premises and even the words used have connotations, which dictionaries of a particular language might not explain. The legal culture of a country would in many cases have forged concepts and a specialised language which may be different from the prevalent non-legal, ‘lay’ culture and language of that country. One should be wary of trying to decipher a foreign law or legal document without some introduction into that legal culture. – Ugo Mifsud Bonnici2 1

P Grossi, Società, Diritto, Stato. Un recupero per il diritto (Giuffrè, Milan 2007) 17 U Mifsud Bonnici, An Introduction to Comparative Law (Malta University Press, Malta 2004) 83 2

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Inspiration

This article is inspired by four paragraphs (10-13) of a Court of Appeal (Civil) judgment of 2009.3 The appellant argued that there were important differences between the Italian and the Maltese situations being examined by the Court, and that there were also important differences between the relevant provision of the Italian Civil Code and the relevant provision of the Maltese Civil Code. The Court of Appeal observed that ‘għalkemm l-appellant jallega illi hemm differenzi fis-sustanza bejn il-liġijiet Maltin u dawk Taljani, ftit li xejn huwa speċifiku’,4 and it therefore did not have the opportunity to discuss this possible exception to judicial importation of foreign law through foreign judgments. In this article, the present author shall try to discuss the implications of the judicial importation of foreign solutions when the foreign legislation and Maltese legislation do not contain identical provisions.

Italian Judgments and Italian Authors as a Source of Maltese Law

With varying degrees of controversy, it is generally accepted that the sources of Maltese law are the written law, customs, judicial decisions, negotium juridicum (or legal transactions),5 equity, and authoritative opinions.6

Galea vs Falzon, Court of Appeal (Civil), 9 October 2009 ibid, para 13 5 The Rechtsgeschäft is ‘the means by which legal subjects can change the legal positions of themselves or other persons intentionally. Examples from private law are contracts, terminations of contracts, last wills, transfers of rights, and the creation of rights in rem such as usufruct and mortgage [hypothecs]’ – J Hage, ‘What is a legal transaction?’ in M Del Mar & Z Bankowski (eds), Law as Institutional Normative Order (Ashgate, Surrey 2009) 103 6 Dr Patrick Galea: Unpublished lectures on Prolegomena, University of Malta. 4

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For many reasons, which there is no need to enter into here, judicial decisions and authoritative opinions might be both local and foreign. Let the reader consider the scenario in which a Maltese Civil Court refers to and adopts the reasoning of a foreign judicial decision and foreign authors from the same jurisdiction who seem to confirm the pronouncement in that foreign judicial decision. In the case of Italian judicial decisions, such similarities between judgments and authors are not surprising, even if Italian Courts do not usually disclose their proximity to academia. ‘Italian courts,’ write Sir Basil Markesinis and Jörg Fedtke, ‘are among those which do not cite academic authorities in their judgments, be they of national or international origin’. They point out that ‘such citation is prohibited by Art 118.3 of the Rules Concerning the Application of the Code of Civil Procedure (1942)’. But, they continue: this does not mean that Italian judges do not consult academic literature. Indeed, there is emerging (and, arguably, widespread) consensus that in the field of private and commercial law some important national innovations have been the result of extra-judicial meetings and exchanges between judges and academics.7 In other words, it would seem only natural to find Italian judgments and Italian academics concurring in their opinions, because Italian Courts listen to academics. This traffic of opinions originating from academia and reaching the judiciary is important for the proper understanding of those judgments, since they sometimes end up becoming part of Maltese Civil Law.

Implications of Judicial Importations

When Maltese Courts refer to contemporary Italian judgments, they are therefore indirectly referring to both the 7

B Markesinis & J Fedtke, Judicial Recourse to Foreign Law. A New Source of Inspiration? (Routledge, Oxford 2006) 62 159

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evaluation of the facts and their societal circumstances by the Italian Court, and the doctrinal undercurrents which help to forge the dominant legal culture of the moment in Italy. To put it differently, the Maltese Courts would be obtaining their inspiration from facts taking place in a different society and commented upon by authors trained in a different legal milieu. This milieu, like every other national milieu, is constantly evolving. For many reasons, of which the present author shall highlight only three: (i) legislative interventions by Italy’s Sovereign power; (ii) changes in society caused by peculiar circumstances obtaining there, some historical, others societal; (iii) internal developments within the legal community itself. In 2006, Paolo Grossi, highly respected Judge of the Constitutional Court of Italy and academic, expressed this thought in these words: ‘È oggi che qualcosa, anzi molto, sta cambiando, e proprio su un piano di psicologia collettiva dei giuristi [emphasis added]’.8 He then proceeded to explain how the legal community in Italy had been reacting to what it perceived as the strictures of ‘exegetic enslavement’ (servitù esegetica).9 Ugo Mifsud Bonnici explains this point elegantly and lucidly: Every country has its own legal culture. It is important to distinguish the elements that compose each country’s legal culture. The truth is that the law of any given country is not solely that in its statute books or customs, but a whole complex and continuously changing mass of interacting positive laws, ideas and habits. It is wise for any Court to seek to ascertain the true import of a foreign law not simply through the reading of the text in the original or more so when translated. 8

Grossi (n 1) 15 ‘Il dato va valutato con attenzione; per buona parte il metodo di lavoro del giurista di oggi è determinato da linee metodologiche che si elaborano lungo il 19° secolo. Il giudizio di mera esegesi, attribuito a questi giuristi, va con tutta probabilità corretto’ – R Ferrante, Dans l’ordre établi par le Code civil. La scienza del diritto al tramonto dell’Illuminismo giuridico (Giuffrè, Milan 2002) passim and R Ferrante, Codificazione e cultura giuridica (2nd edn, Giappichelli, Turin 2011) passim 9

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In Civil Law countries there is more recourse to the quotation of the latest authoritative textbooks. Some study of Comparative Law could acquaint legal practitioners with the basic principles in the understanding of a foreign law.10 In Public Law, international developments seem to have a more legitimate place in the judicial importation of foreign concepts and solutions. After all, the liberal democratic Modern State is more or less the same all over the West; it places emphasis on the freedoms of the individual and on the market economy. On the other hand, in Private Law, the implementation of the market economy has taken different national routes. This is one problem which the current European civil law harmonisation project sets out to solve, namely the removal of divergences between national contract law regimes in order to ease cross-border transactions and allow citizens to take full advantage of the internal market, and for which it is also being criticised.11 However, the essential point is that the creation of the national Civil Codes in nineteenth-century Europe took place in an ideological context which no longer believed in a European ius commune (the law common to all Europeans which had characterised Europe in the High Middle Ages and Early Modernity – the ancien régime period) but believed wholeheartedly in a shared European legal culture which served as background to the diverse national socio-economic situations.

Not all friends are true: the Italian Civil Code

When contemporary Italian judgments are consulted, it would be wise to avoid the presumption that the Italian and the Maltese Civil Codes always say the same thing. Furthermore, one 10

U Mifsud Bonnici, An Introduction to Comparative Law (Malta University Press, Malta 2004) 83-86 – already mentioned in fn 2 above 11 R Halson & D Campbell, ‘Harmonisation and its discontents: a transaction costs critique of a European contract law’ in J Devenney & M Kenny (eds), The Transformation of European Private Law Harmonisation, Consolidation, Codification or Chaos? (Cambridge University Press, Cambridge 2013) 100 161

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has to verify which Italian Code one is referring to. Unified Italy has had two Civil Codes, one promulgated in 1865 and the other in 1942. The 1865 Code followed, more or less, the Code Napoléon, that is, the Civil Code of the French of 1804. The lynchpin of Italian Civil Law thus remained property and its ownership, even if the social and historical context of the Italian Code was different from that obtaining in early nineteenth-century France. Because of this orientation, the Civil Code became the legal toolbox of liberal 12 or bourgeois Italy. The 1942 Code, on the other hand, was heavily influenced by the Bürgerliches Gesetzbuch (BGB), the Civil Code of Unified Germany published in 190013 and also by German notions which had not made it to the BGB. An example of the latter would be decadenza and prescrizione. To borrow Barbara Pozzo’s words: To understand the origin of the differentiation of decadenza and prescrizione in the Italian [1942] code, unknown to other systems, it is necessary to go back to the mid-nineteenth century and the studies which were being pursued into the legal effect of prescription periods and how time runs in legal terms. The subject was set in a single framework from the conceptual point of view and referred to one single legal regime – that of prescription. This method of proceeding was accepted by both French and German academic commentators. The 12

Nineteenth-century liberalism was different from contemporary liberalism (or neoliberalism, or radical liberalism). 13 ‘The unification of Germany in 1870 created the political base for the unification of the law. The Pandectists, who dominated the German faculties of law, had the choice of staying on the sidelines or of co-operating. On the grounds that the development of German law was now sufficiently advanced and had achieved completion, many opted in favour of the latter. The Bürgerliches Gesetzbuch, introduced in 1900, was accordingly also primarily the work of the Pandectists’ – R Lesaffer, European Legal History A Cultural and Political Perspective (Cambridge University Press, Cambridge 2009) 471. The Pandectists (an offshoot of Friedrich Carl von Savigny’s (1779-1861) historical school) were a German school of thought which believed that, using strict logic, scholars could extrapolate new rules from Justinian’s Corpus juris civilis and the Pandects, in particular apt at regulating modern socio-economic factsituations. They opposed codification as they considered rights to exist de facto rather than being State-given. 162

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notion of prescription embraced several institutes which would be collocated today in quite a different way. Prescription included at one and the same time not only its extinguishing aspect, but also that of acquisition (usucapione). The 1865 Italian civil code reproduced this single archetype. However, after the 1865 civil code had been decreed, Italian academic lawyers came under the influence of their German counterparts, in particular the work of Grawein and Weiss. German legal thought started to make a distinction between Präklusivfristen and so-called Verjährungsfristen, but in the German civil code (the BGB), which came into force on 1 January 1900, no specific provisions in the field of decadenza were included. However, the code allowed that there were points which legal scholars may have wished to develop. In contrast to this, the Italian law-makers introduced a differentiation between decadenza and prescrizione into the 1942 code, a novelty with respect to the 1865 version, following the line of thought coming from German legal scholars which greatly influenced the debate in Italy in the early years of the XXth century. The outcome of this is that the clear distinction between decadenza and prescrizione, which is a feature of the legal language of Italian jurists, is nonexistent or much more attenuated elsewhere, such as in France, where the expression délais prefix is used by legal academics, but not in the code.14 Generally speaking, our own Code reproduces most of the provisions of the 1865 Italian Civil Code and, like it, carries two extra topics compared to the Code Napoléon: community and possession. The Code’s original drafter, Sir Adriano Dingli (1817B Pozzo, ‘Multilingualism, Legal Terminology and the Problems of Harmonising European Private Law’ in B Pozzo et al. (eds), Multilingualism and the Harmonisation of European Law (Kluwer Law International, The Hague 2006) 9 10 14

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1900), ‘also consulted the provisions of other leading Continental Codes and the treatises of textwriters of repute. He also referred to the Code of Louisiana, itself based on the Code Napoléon.’15 On account of the needs and mores of the Maltese people, however, on numerous occasions he had to modify the European legislations serving as his model, adding special provisions too.16 Whereas Harding claims that the Ordinances which later became the Maltese Civil Code were ‘more progressive than the Code Napoléon because they incorporated provisions containing solutions to the controversies which arose after the promulgation of the Code Napoléon’,17 Biagio Andò claims that from the time of the redaction of the Ordinances, ‘the Maltese Code has remained one of the most faithful codes to the original Code Napoleon when compared with the civil codes of other civil law systems which have undergone revision. In fact, the Maltese Code has remained fairly stable’.18 In sum, the situation we have at the moment is quadrangular: On the first side of this quadrangle, we have the 1865 Italian Civil Code, which followed more or less the Code Napoléon. On the second side, the 1942 Italian Civil Code, which was heavily influenced by the provisions of the German Civil Code of 1900 and by notions elaborated by German authors but not incorporated in their country’s Civil Code. On the third side, the Maltese Civil Code, which has remained by and large faithful to the original Code Napoléon, albeit with interpolations, some of which incorporate autochthonous rules while others reflect rules taken from other codes such as the Code of Louisiana. On the fourth and last side, the Code Napoléon itself, which has undergone numerous amendments over the years. H W Harding, ‘Law’ in H Frendo & O Friggieri (eds), Malta Culture and Identity (Ministry for Culture and the Youth, Malta 1994) 216 16 C Billiet, Lois Civiles de Malte Traduites et annotées et mises en concordance avec le code français, Traduction publiée avec l’autorisation de M. le Premier Président de la Cour d’appel d’Alger, Collect. de Codes Étrangers XVII (Paris Pedone, Paris 1896) 1 17 Harding (n 15) 216 18 B Andò, ‘The Role of Judges in Mixed Legal Systems’ [2011] Journal of Civil Law Studies Vol 4 Issue 2 245 15

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The quadrangle in the middle is Maltese praxis. The question becomes self-evident. When the Maltese Judge refers to contemporary Italian judgments, can she merely make those decisions hers without first verifying their origins, or at least their legislative bases, to compare them with the Maltese provision(s) at hand? Could there be cases of faux amis? Not merely linguistic, but also legal faux amis ... false friends which could lead us down the wrong path? Another question raises its head. If we are going to quote contemporary Italian judgments, why don’t we, in the light of the above, quote contemporary French judgments as well? There will certainly be cases when a French judgment will be based on a provision the contents of which are closer to our own than the Italian provision dealing with the same subject-matter.

The Same Legislative Bases

It is clear that when there is a gap, or lacuna, in the law, the Civil Court cannot send the litigants back home on the basis that there is no law which decides their case. If legislation, custom, previous judicial decisions, the volition of the parties themselves, equity, and authoritative opinions are all silent about the facts of the case at hand, and it is not even possible to interpret broadly any of these sources, then it is obvious that the Civil Court has to ‘create’ a rule ‘according to justice and right, and in accordance with the laws and customs of Malta, to the honour of God and the Republic of Malta’.19 If foreign judgments can offer a solution which fits the terms of the oath of office, 20 then one cannot see why there should be any obstacle to the judicial importation of it. 19

This is how the Judge binds herself to carry out her duties when she takes the oath of office – Code of Organisation and Civil Procedure, Chapter 12 of the Laws of Malta, Article 10 20 Indeed, the oath of office of a judge somehow delimits the functions of the Court by using the old device of concretising an abstract concept by incarnating it in a human being. The abstract functions of the Court become the concrete functions of the Judge. The formula is not just logical, it is beautiful! Unlike the elected Member of Parliament (who represents a part of the electorate and therefore has to be partial), 165

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The same applies when there is a clear case of ambiguity in Maltese legislation. This might seem an oxymoron, but indeed it is not, for what the present author means here is that it would be preferable if ambiguity were not forced on an otherwise fairly clear provision in order to accommodate an interpretation which is so broad as to almost verge on illegitimacy. In German legal literature, one finds arguments about the legitimacy of Court creativity in the matter of interpretation. Essentially, the arguments run along the following lines: does the Court, in its interpretation of the statute, respect the ‘boundaries of the system and the objectives (teleology) of the statute’ or does it not?21 The same questions arise with regard to the respect for the boundaries of the system and the teleology of the statute, particularly, when there is no gap in a particular piece of Maltese legislation, which also happens to be unambiguous to boot. In this case, one doubts whether a Maltese Court is empowered to modernise the law by importing a foreign judgment based on a differently-worded legal provision as this would probably be tantamount to the abrogation of the current law and the enactment of a new law, namely the foreign provision. If the two provisions are not identical, one cannot see how the Maltese Court could adopt the foreign reasoning.

the Judge represents the State and therefore has to be impartial. Her functions she is to carry out ‘in accordance with the laws and customs of Malta’ but within the confines of ‘justice and right’, and ‘to the honour of God’, which translates into the Judge’s conscience, and to the honour of ‘the Republic of Malta’, which can only refer to the Sovereignty of the State, namely the boundaries of the administrative and legal setup and the teleology of the law being examined (vide infra). 21 German legal literature distinguishes between Gesetzesimmanente Rechtsfortbildung and Gesetzesübersteigende Rechtsfortbildung, the latter describing the case when Courts exceed the boundaries. K Larenz, Methodenlehre der Rechtswissenschaft (1st edition, Springer Berlin Heidelberg, Berlin 2008) 366-367. Being unable to read German, the present writer has learnt this through T Barkhuysen, M L van Emmerik and J Uzman, ‘The Dutch Supreme Court: A Reluctant Positive Legislator?’ [2010] Electronic Journal of Comparative Law Vol 14.3 <http://www.ejcl.org/143/art143-16.pdf> accessed 3 February 2015. If one were to translate the terms used, Rechtsfortbildung would mean the ‘creation of law by means of case-law’, Gesetzesimmanente ‘that is still covered or implied by positive law’, and Gesetzesübersteigende ‘that goes beyond what is stated by positive law’ – the present author would like to thank Dr Werner Miguel Kühn for his assistance. 166

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Dangers and Obstacles in the use of Foreign Law

There is a chapter22 in Sir Basil Markesinis and Jörg Fedtke’s book, already quoted above, which carries this title. The present author shall not summarise it here, but shall only enumerate the subheadings which add up to a list of dangers and obstacles in the use of foreign law: - lack of precise information, - is the information about the foreign legislation and the society which it regulates up-to-date? - detailed consideration versus generalities (‘the use of foreign law is impeded by the fact that it is merely translated into the language of the potential ‘receiver’ rather than packaged in a manner that made it useable by the judges and lawyers of the receiving system’23), - the impact of the socio-economic and political environment, - legal certainty, - do courts have enough time to deal with other legal systems? - the ‘depth’ of analysis of foreign legal ideas.

Summing Up

Whereas the traditional, nineteenth-century authors, such as Pothier, Pacifici Mazzoni, Giorgi, Ricci, Baudry-Lacantinerie, and all the others, be they Italian or French in translation, clearly express ideas which are closer to the spirit and letter of our Civil Code, contemporary Italian judgments have to be considered with caution, because they might be based on provisions of the 1942 Italian Civil Code which contain rules different from those of its 1865 predecessor and the Maltese Civil Code. It is probably difficult to justify the importation of the reasoning applied to a 1942 provision the wording of which is different to the Maltese provision on the same subject. 22 23

Markesinis (n 7) 139 et seq. ibid 145 167

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Needless to say, this situation might seem ridiculous – why should twenty-first century Malta still be governed by a nineteenthcentury Code? If the time has come to modernise the Code, then Parliament, empowered by the Constitution to make laws, should tackle the matter. The same degree of care clearly applies in the case of other laws, not just the Civil Code, which our legislator may have copied from Italy or other jurisdictions. Furthermore, if the foreign provision has remained unchanged, but the legal culture within which it is now being applied has developed significantly, then it follows that contemporary judgments of the country of origin are also suspicious and to be treated as such. Finally, it would dispel worries of illegitimacy if the importation of the judicial reasoning were justified on the basis of an exercise which evaluates whether the imported foreign reasoning, forged in different administrative and socio-economic conditions, fits in well with the teleology and boundaries of our domestic legal system. Perhaps, had the appellant in the appeal case mentioned above gone through this exercise, the Court of Appeal would have had the opportunity to make a pronouncement on this point, thereby further clarifying accepted practice. Perhaps, also, the local study of Italian legal history would be useful too.

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CRIMINAL LAW

The Necessary Requisites of Judgments According to Article 382 of the Criminal Code Amadeus Cachia

Amadeus Cachia

THE NECESSARY REQUISITES OF JUDGMENTS ACCORDING TO ARTICLE 382 OF THE CRIMINAL CODE AMADEUS CACHIA

_______________________________________________________ Dr Amadeus Cachia was educated at St. Aloysius’ College, Birkirkara and subsequently graduated Doctor of Laws in 2014 from the University of Malta on completion of a doctoral thesis entitled ‘Revisiting the Application of Ultima Ratio in International Criminal Law’. Dr Cachia was admitted to the bar a year later and currently works with a local legal firm; Franco Debono and Associates. Dr Cachia occupied the role of academic officer within the University of Malta Law Students’ Society for two years. His main areas of interest are Criminal Law, Civil Law and Constitutional Law.

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Introduction

Black’s Law Dictionary defines a judgment as ‘a court’s final determination of the rights and obligations of the parties in a case’.1 Thus, one may infer that a judgment is a decision by a competent court or tribunal resolving a controversy whilst determining the rights and obligations of the parties and as such it is the final part of the whole court case. The Maltese Criminal Code in article 662 (1) defines a decision as including, every verdict of the jury on the facts, every judgment of a court acquitting, convicting or sentencing the person charged or accused, every procès-verbal drawn up in connection with any inquest or other inquiry held under the provisions of this Code (other than an inquest for the purpose of an inquiry relating to the ‘in genere’), and, in general, every decree or other definitive order of a court.

Bryan A Garner, Black’s Law Dictionary (8th edn, West Group 2004) 171

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A judgment must be in writing and must clearly show that all the controversies have been adjudicated. In fact in accordance with article 377 of Chapter 9 of the Laws of Malta, the Court when delivering judgment must either discharge or sentence the accused. Each judgment delivered by the Criminal Courts must thus, either declare the accused not guilty of all or any of the charges brought against him or must find him guilty of all or any of the charges brought against him. The court seized with the case may also hold the accused not guilty with regards to some of the charges brought against him, and guilty in relation to other charges, imposing a punishment in the latter two situations for the charges of which the accused has been reputed guilty. The Code moreover provides that every decision of the court shall be delivered by the Judge or Magistrate in open court. 2 The Registrar is also mandated to record the decision delivered by the Criminal Court, which recording constitutes authentic proof of this same decision.3 Where the decision is delivered by the Court of Magistrates, such decision when reduced in writing by the sitting magistrate, shall be kept in its original form. Furthermore, a summary of the decision shall be recorded in a special register, and such summary shall constitute authentic proof of such decision in the same manner as a certified copy thereof.4 Such summary shall indicate by which court the decision was delivered, the names of the parties, the date of the decision, and the particulars referred to in article 382, or, in the case of any decree, the substance of the order contained therein. 5 Additionally, any decision by which a question of law is determined by the Court of Criminal Appeal and the Criminal Court shall also include the reasons which led the court to that decision.6 These reasons shall also be recorded by the Registrar.7 2

Nonetheless, article 663(1) of the Criminal Code (Chapter 9 of the Laws of Malta) provides an exception to this rule in the sense that a decision granting or refusing bail may be given in camera. 3 Article 663(3) of the Criminal Code states that every decision of the Criminal Court shall be recorded by the registrar, and such record shall constitute the authentic proof of such decision. 4 Criminal Code, Article 663 (5) 5 ibid, article 663 (5) 6 ibid, article 662 (2) 7 ibid, article 663 (4) 172

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Necessary Formalities in terms of the Provisions of the Criminal Code

In other words, while a judgment delivered by the Court of Magistrates must include the Court by which the decision was delivered, the names of the parties, the date of the judgment, and the requirements found in article 382,8 a judgment delivered by the Criminal Court or Court of Criminal Appeal must include the Court by which the decision was delivered, names of the parties, date of the judgment, the requisites found in article 382 and most importantly the reasons which led the Court to that decision. Articles 663(5), 377(1) and 382 of the Criminal Code indicate what ought to be included in a judgment delivered by the Court of Magistrates. Local Courts have given a rather restrictive interpretation of these articles especially Article 382 and have simply abided by the formalities mentioned in these articles without adding further requirements which are not mentioned in such provisions. For instance in Il-Pulizija vs Gesmond Sant,9 the Court of Criminal Appeal held that neither article 377(1) nor article 382 provide that the judgment should on pain of nullity be written by the Magistrate himself/herself but these articles only stipulate that what has been said by the Magistrate is registered and written in the judgment, and as a result the grievance raised by the defence that the judgment delivered by the first Court was null was rejected. 10 Moreover the Court of Criminal Appeal in Il-Pulizija vs Carmel Polidano,11 after differentiating article 382 to article 662(2) stated that: 8

Which will be discussed later on. Court of Criminal Appeal, 19 February 2014 The Court stated that: ‘L-Artiklu 382 tal-Kap 9 jagħti direzzjoni lil Qorti ta’ x’għandu jkun fiha s-sentenza u cioe, għandha tgħid il-fatti illi tagħhom dak li jkun ġie misjub ħati, tagħti l-piena u ssemmi l-Artiklu tal-Kodċi jew kull Liġi oħra li tkun tikkontempla r-reat. Iżda dan l-Artiklu ma jgħidx li s-sentenza għandha bilfors tinkiteb mill-Magistrat.’; Vide: Il-Pulizija vs Albert Bezzina, Cpourt of Criminal Appeal, 25 July 1994, wherein it was stated that: ‘La l-Artiklu 377 (1) u lanqas lArtiklu 382 tal-Kodiċi Kriminali ma jirrikjedu li s-sentenza tinkiteb mill-Maġistrat. Dak li trid il-Liġi hu li dak li jgħid il-Maġistrat meta jgħid is-sentenza jiġi reġistrat u riprodott fil-kopja tas-sentenza.’ 11 Court of Criminal Appeal, 11 December 2013 9

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Jiġifieri sentenza tal-Qorti tal-Maġistrati li ma ssemmix ir-raġunijiet li wassluha għad-deċiżjoni tagħha ma titqiesx nulla. Naturalment huwa dejjem rakkomandabbli li jissemmew almenu minimu ta’ raġunijiet, iżda n-nuqqas tagħhom ma jwassalx għannullita` tas-sentenza. The restrictive approach embraced by our courts vis-a-vis the requirements of judgments is further underscored by court pronouncements which repeatedly hold that judgments should be upheld as much as possible especially when the rights of the accused have not been prejudiced. In fact, the Court of Criminal Appeal in Il-Pulizija vs Francis Zammit,12 held that: Mhix il-prattika ta’ din il-Qorti tkun formalisitika żżejjed specjalment meta nullita’ simili ma ssibx konsegwenzi partikolari. Il-formaliżmu m’hemmx postu u għandha tigi salvata s-sentenza anki fuq il-massima ‘ad salvandum actum consummatum omnis favorabilis capienda venit interpretatio’. This leads to the crux of the article; domestic jurisprudence attests that judgments delivered by the Court of Magistrates which are not motivated are not null and void. Moreover, the need by our Courts not to motivate their judgment has been considered even truer in cases when an admission was given by the accused to the charges brought against him. In fact in Il-Pulizija vs Emmanuele Magro,13 the Court of Criminal Appeal held that: Rigward l-ewwel aggravju illi s-sentenza ma kinitx motivata, il-Qorti tagħmel riferenza għall-ammissjoni tal-istess appellant permezz tal-verbal tad-disgħa u għoxrin (29) ta’ Novembru tal-elfejn u tnax (2012), f’liema każ, allura, l-ewwel Qorti ma kellhiex alternattiva ħlief li tgħaddi minnufiħ għas-sentenza kif fil-fatt għamlet u stante din l-ammissjoni ma kellhiex għalfejn toqgħod tidħol fid-dettal b’ħafna argumenti dwar il-ħtija o meno tal-appellant. Kien biżżejjed 12 13

Court of Criminal Appeal, 16 January 1986 Court of Criminal Appeal, 30 October 2014 174

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għall-ewwel Qorti illi ssemmi l-artikolu tal-liġi illi taħtu l-appellant kien qed jinstab ħati u l-fatti tal-każ li liema fatti ġew esposti fil-bidu tal-ġudikat tramite lakkuza miġjuba mill-Prosekuzzjoni. Despite the afore quoted pronouncement by the Court of Criminal Appeal, it seems that a consensus on the matter has not as yet been achieved. In Il-Pulizija vs Paul Chetcuti Caruana,14 the Court of Criminal Appeal held that: Jibda biex jingħad illi l-appellant tressaq il-Qorti fuq proċedura sommarja fid-distrett tal-Mosta f’liema każ allura l-Qorti tal-Maġistrati biex tissodisfa l-vot talliġi kien ikun biżżejjed li tagħmel riferenza għall-fatti kif esposti fiċ-ċitazzjoni, tindika l-artikoli tal-liġi u tagħmel id-dikjarazzjoni ta’ ħtija o meno u jekk ikun il-każ, il-piena. M’għandhiex għalfejn terġa’ tirrepeti b’mod aktar dettaljat il-fatti kif jidhru fil-bidu taċċitazzjoni peress illi jekk ippruvati, l-Qorti tista’ tagħmel pjena riferenza għalihom u xejn aktar. F’dan il-każ il-Qorti hekk għamlet u teknikament ma hemm xejn ħażin fis-sentenza tal-Qorti tal-Maġistrati. Però din il-Qorti tirrileva illi mhux il-kawżi kollha sommarji għandhom jimxu bl-istess mod peress illi ċerta kawżi għad illi jkunu bdew bi proċedura sommarja jkunu ta’ ċerta importanza u tajjeb illi tingħata motivazzjoni għar-ragunament tal-Qorti. F’dan il-każ il-motivazzjoni hija nieqsa kompletament u hawnhekk din il-Qorti tħoss illi għandha tiċċensura ‘l-Qorti tal-Maġistrati peress illi f’kawża bħal din kien jimmerita motivazzjoni u konsiderazzjonijiet u mhux taqbad u tiddeċiedi fuq il-ħtija o meno mingħajr ma tagħmel l-iħken motivazzjoni jew konsiderazzjoni. Il-Magistrat għandha tagħraf tiddistingwi limportanza ta’ kawża minn oħra u fejn normalment forsi jkollha raġun illi ma jkollhiex għalfejn tidħol filmotivazzjoni, ċerta kawżi però min-natura tagħhom stess jirrikjedu aktar studju, motivazzjoni u 14

Court of Criminal Appeal, 19 February 2014 175

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konsiderazzjonijiet, u dina hija proprja waħda minnhom fejn il-Qorti imissha tat aktar importanza għas-serjetà ta’ din il-kawża u l-konsegwenzi tagħha. Hi x’inhi, però, bħalma ġià ingħad, teknikament lewwel Qorti kienet korretta bil-mod kif kitbet issentenza u ma tistax din il-Qorti tilqa’ t-talba ta’ nullità tal-appellant. While at law the Court of Magistrates is not bound to motivate its decisions, cases which warrant particular importance due to the nature of the circumstances or the gravity of the offence, the Courts ought to motivate their judgments, despite the fact that a lack of motivation by the First Court, regardless of the importance of the case, will not bring about the nullity of the judgment.

Article 382

Article 382 of the Criminal Code is a very important article as it embodies the necessary requisites which a judgment delivered by the Court of Magistrates must possess. In fact, article 663 (5) in establishing what shall be mentioned in the summary of the judgment delivered by the Court of Magistrates provides that the elements found in article 382 must be present too. Thus, the elements found in this article are a sine qua non elements for the validity of judgments. Article 382 provides that: The court, in delivering judgment against the accused, shall state the facts of which he has been found guilty, shall award punishment and shall quote the article of this Code or of any other law creating the offence. Therefore, according to this article the Court in delivering the judgment must clearly mention the: (i) Facts of which the accused has been found guilty; (ii) Punishment meted to the accused; and (iii) The article of the Code or of any other law creating the offence.

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All these three elements must be found in the judgment delivered by the Court of Magistrates. Various times before our Courts the issue of which judgment should be considered as the final and binding one has arised since these three requisites must be found in the final written judgment. The Court of Criminal Appeal in Il-Pulizija vs Gesmond Sant made it clear that the judgment that ought to be considered as binding is the official copy issued by the Deputy Registrar and therefore these three requisites must be found in the official copy of the judgment issued by the Deputy Registrar. In fact, the Court explained that: Dan ifisser quindi illi l-appunti illi jikteb il-Maġistrat, jibqgħu biss appunti għall-informazzjoni tiegħu. Issentenza illi tagħmel stat fil-konfront tal-partijiet u terzi, hija dik il-kopja uffiċjali illi toħroġ mingħand id-Deputat Registratur, taħt il-firma tiegħu biss. IlMaġistrat m’għandux għalfejn jiffirma l-kopja uffiċjali. Dan ‘l għaliex l-istat legali jkun intlaħaq mid-Deputat Registratur u mhux mill-Maġistrat pero, jekk il-Maġistrat jagħżel li jiffirma ma jagħmel xejn ħażin, basta li fuq il-kopja jkun hemm ukoll il-firma tad-Deputat Registratur. Moreover in Il-Pulizija vs Raymond Parnis,15 the Court of Criminal Appeal reiterated that: Wara li l-Qorti rat l-atti tal-kawża specifikament lappunti li kitbet il-Maġistat fis-sentenza kif ukoll ilkopja uffiċjali, tikkonferma illi l-raba’ akkuża hija nieqsa mill-konsiderazzjonijiet illi jidhru fil-kopja uffiċjali. Dan jidher illi huwa żball tat-traskrittur illi bi żvista jew għal xi ħaga oħra naqas milli jipproduċi eżatt dak illi kitbet il-Maġistrat. Jingħad mill-bidu nett li hija l-kopja uffiċjali maħruga mid-Deputat Registratur illi jagħmel stat fil-konfront ta’ terzi u mhux l-appunti jew is-sentenza li tkun miktuba mill-Maġistrat. Dana stabbilit u ovvju pero’ illi hemm diskrepanza bejn il-punti li kitbet ilMaġistrat u s-sentenza uffiċjali, liema diskrepanza 15

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hija sforz lapsus jew żball tekniku tad-Deputat Registratur. Peress illi huwa dmir tal-Qorti illi ssalva kemm jista’ jkun l-atti, ma tħossx illi għandha tmur għall-estrem tan-nullita’ tas-sentenza, aktar u aktar meta dan l-iżball jista’ faċilment jigi rrangat u dak li qalet il-Maġistrat jista’ jigi riprodott fedelment fissentenza uffiċjali. Għalhekk din il-Qorti tiddisponi mill-eċċezzjoni tannullita’ imqajjma mill-Avukat Ġenerali billi tiċhad listess, iżda tordna illi l-atti jintbagħtu lura lill-Ewwel Qorti ħalli d-Deputat Registratur joħrog kopja uffiċjali oħra w jirriproduċi fedelment dak illi qalet ilMaġistrat fis-sentenza tagħha. Courts have in various occasions stressed the importance of adherence with the requirements mentioned in article 382. In fact, various judgments have explicitly held that the lack of any one of these formalities regarded as necessary for the validity of the judgment, should lead to the nullity of the judgment as a result of a defect in formality.16 In other words, these requirements are not mere formalities but are necessary requisites for the validity of the judgment. In Il-Pulizija vs Emanuel Azzopardi,17 the Court of Criminal Appeal held that: Skont ġurisprudenza paċifika tal-Qorti tal-Appell Kriminali, l-inosservanza ta’ xi wieħed mir-rekwiżiti tal-artikolu 382 tal-Kodiċi Kriminali jammonta għal nuqqas ta’ formalita’ sostanzjali fis-sens tal-artikolu 428(3) tal-imsemmi Kodiċi, bil-konsegwenti nullita’

Vide Il-Pulizija vs Donald Cilia, Court of Criminal Appeal, 24 April 2002; IlPulizija vs Benjamin Muscat, Court of Criminal Appeal, 28 June 2002 and 10 July 2002; Il-Pulizija vs Joseph Zahra, Court of Criminal Appeal, 9 September 2002; IlPulizija vs Paul Cachia, Court of Criminal Appeal, 25 September 2003; Il-Pulizija vs Mark Portanier, Court of Criminal Appeal, 14 September 2004; Il-Pulizija vs John Axiaq, Court of Criminal Appeal, 19 May 2005; Il-Pulizija vs Stefan Abela, Court of Criminal Appeal, 2 Februuary 2006; Il-Pulizija vs Emanuel Mercieca, Court of Criminal Appeal, 7 February 2006; Il-Pulizija vs Anthony Borg, Court of Criminal Appeal, 1 June 2006; Il-Pulziija vs Marcel Dingli, Court of Criminal Appeal, 9 February 2007 17 Court of Criminal Appeal, Vol LXXXIII 1999, Part IV 178

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tas-sentenza jew ta’ parti minnha skont il-każ. Tali nullita’ hija sollevabbli ‘ex ufficio’. Moreover in Il-Pulizija vs Mario Agius,18 the Court of Criminal Appeal restated that: In-nuqqas ta’ osservanza ta’ dak li hemm provdut flartikolu 382 tal-Kodiċi Kriminali jammonta għannuqqas ta’ formalita` sostanzjali. These requisites are alternatives to each other and therefore in order for a judgment to be annulled by the Court there is no need to find a lack in all the three formalities but a failure to include one of the formalities will suffice. Thus, since, all the three requisites mentioned in Article 382 must be present in the decision given by the Court of Magistrates, the lack of any one of them, will result in a lack of substantial formality and consequently, will result in the nullity of that decision.

Requisites of a Judgment

Article 382 explicitly mentions three requisites which must be found in judgments delivered by the Court of Magistrates. In the following sections of this article, the author shall analyse each element separately. 4.1 Facts of which the accused has been found guilty The first requisite stipulated in article 382 is that the judgment must ‘state the facts of which he [the accused] has been found guilty’. Article 382 purports no denotation of what would constitute the facts for which the accused has been found guilty. Thus, it is necessary to turn to jurisprudence in order to better comprehend what the legislator meant by ‘facts of which he has been found guilty’. The Court of Magistrates in delivering judgment must explicitly either discharge or sentence the accused. Where the 18

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presiding magistrate mentions the facts of which the accused has been found guilty, it must necessarily declare the accused guilty. Therefore, the Court of Magistrates in delivering judgment must on pain of nullity declare that the accused has been either found guilty or not guilty of all or any of the charges brought against him. In fact, in Il-Pulizija vs Joseph Agius,19 the Court of Criminal Appeal held that the first court after mentioning the article of the law,went on to deliver the punishment without declaring the accused guilty and as such this constituted a breach of the elements found in article 382: Ovvjament la l-Qorti hija marbuta illi tagħti l-fatti illi tagħhom l-appellant ikun ġie misjub ħati dana jfisser illi għandu jkun hemm id-dikjarazzjoni ta’ ħtija għax altrimenti huwa inutli illi ssemmi l-fatti. Article 382 refers to the facts of which the accused has been found guilty. In Il-Pulizija vs Elton Abela,20 the Court of Criminal Appeal gave a definition of these facts: Il-fatti li l-artikolu 382 jirreferi għalihom huma lfatti tar-reat u mhux, kif jippretendi l-appellant, ilfatti li jiġġustifikaw il-kundanna ossia lmotivazzjoni. Fis-sentenza appellata l-fatti tar-reat huma effettivament elenkati fil-bidu nett. L-ewwel Qorti mbagħad għaddiet biex telenka l-artikoli tal-liġi relattivi għal dawk ir-reati kollha u ddikjaratu ħati wara li qalet li kienet semgħet ix-xhieda kollha u eżaminat id-dokumenti esibiti. Dak li kellha f’mohha l-ewwel Qorti huwa ċar, cioe` li kienet qed issib ilħtija għall-imputazzjonijiet kollha peress li ma għamlet l-ebda kwalifika, u wiehed m’għandux għalfejn janalizza s-sentenza biex jipprova jiddetermina ta’ x’hiex hija kienet qed issib lillappellant ħati. Ċertament kien ikun deżiderabbli li kieku l-ewwel Qorti żiedet il-kliem ‘ta’ limputazzjonijiet kollha’ wara l-kelma ‘ħati’. Dan innuqqas però fil-każ in diżamina ma jrendix issentenza nulla. 19 20

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Usually ‘il-fatti tar-reat’ are read out viva voce in open court when the officer of the Executive Police in charge of the prosecution21 or the complainant or his advocate or legal procurator22 appear before the Court of Magistrates. As rightly pointed out in Il-Pulizija vs Philip Schembri;23 L-użu tal-kliem testwali tal-liġi hu meħtieġ biss fil-każ tal-Att ta’ Akkuża miġjub mill-Avukat Ġenerali quddiem il-Qorti Kriminali (ara Art. 589 (d) tal-Kap 9). Fil-każ taċ-ċitazzjoni maħruġa mill-Pulizija Eżekuttiva, din tirrikjedi biss li jkun fiha il-fatti talakkuża (Art. 360 (2)) u dan bl-istess mod bħalma meta tinqara l-akkuża fil-qorti mill-prosekuzzjoni din lakkuża jeħtieg li jkun fiha il-fatt tar-reat (Art. 374 (i) (i) u 375 (c)). Dawn il-fatti, naturalment, iridu juru b’mod ċar ir-reat li tiegħu il-persuna tkun qed tiġi imputata, mingħajr il-ħtieġa ta’ tiġbid ta’ kliem jew immaġinazzjoni, jiġifieri b’mod li l-imputat ikun jaf ta’ liema reat jew reati qed jiġi akkużat u għal liema reat jew reati jrid iwieġeb. Usually, in various summary cases, the judgment would be written on the charge sheet itself where the facts of which the accused has been found guilty would be present. Thus, according to our Courts when a judgment by the Court of Magistrates is written on the charge sheet itself the requisites enunciated by article 382 would be present even with regards to the facts of which the accused has been found guilty.24

When proceedings are instituted by the Police ex officio. When proceedings are instituted on the complaints of the injured party. 23 Court of Criminal Appeal, 18 November 1994 24 In ‘Il-Pulizija vs Emmanuel Zammit’, the Court of Criminal Appeal (16 Januar 1986) held that: ‘Meta s-sentenza oriġinali tkun miktuba fuq iċ-ċittazzjoni li fuqha jkun hemm riprodotti l-fatti u mis-sentenza kif redatta ma jkunx hemm dubju dwar liema fatti jkun ġie misjub ħati l-imputat, il-formaliżmu ma hemmx postu u għandha tiġi salvata s-sentenza, però dan ma hux il-każ, għax hawn si tratta ta’ sentenza motivata u mhux miktuba fuq il-kopja tal-komparixxi li jkollha l-Qorti bħal kif jiġri kważi dejjem fil-kawżi li jinstemgħu bil-proċedura sommarja, u proprju hemm iddubji fuq imsemmija’. 22

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4.2 Punishment meted to the accused The second requisite as per article 382 provides that the judgment must indicate the punishment to be meted out by the accused. Article 7 of the Criminal Code stipulates the punishments to which crimes and contraventions are subject and differentiates punishments which are to be meted out following the perpetration of crimes and punishments which are to be meted out following the commission of contraventions. In fact, while the punishments that may be awarded for crimes are (saving the exceptions laid down in the law) imprisonment, solitary confinement, interdiction and fine (multa), those that may be awarded for contraventions (subject to the provision of article 53 or of any other special law) are detention, fine (ammenda) and reprimand or admonition Obviously the Court of Magistrates will give punishment if it finds the accused guilty since punishment is meted out consequent to a breach of law. In other words, if the Court does not find the person guilty of any of the charges brought against the accused no punishment will be meted out. According to article 382 of the Criminal Code, the Court of Magistrates must specify in the sentence delivered by it the quantum of punishment given to the accused. In other words, the Court of Magistrates in delivering the judgment to the accused if it finds him/her guilty of all or any of the accusations brought against him/her, must state the punishment awarded to him/her. However, as rightly pointed out by our Court various times, article 382 does not require the Court of Magistrates, in delivering the judgment to write and quote the article contemplating the punishment but it only requires the Court of Magistrates to mention the article creating the offence. In Il-Pulizija vs Gaetano Portelli,25 the Court succinctly held that: Fi kliem ieħor, dak li hu neċessarju li jissemma’ hu lartikolu li jikkontempla ‘ir-reat’ (‘…the section…creating the offence’, fit-test Ingliż), u mhux ukoll l-artikolu li jikkontempla l-piena jew pieni. 25

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This was confirmed in Il-Pulizija vs Benjamin Muscat,26 wherein the first court wrongly quoted the articles contemplating the punishment. However, according to the Court of Criminal Appeal, the Court of Magistrates is not bound to quote the articles contemplating punishment but only the articles contemplating the facts of which the person is accused of and as a result the Court of Criminal Appeal upheld the judgment delivered by the Court of Magistrates: Illi kif ġie ritenut minn din il-Qorti diversament preseduta fis-sentenzi tagħha kontra l-istess appellant odjern tat-28 ta’ Ġunju 2002 , ‘tali riferenza żbaljata ma ġġibx in-nullita’ tas-sentenza appellata . L-art. 382 tal-Kap. 9 jirrikjedi li Sentenza tal-Qorti talMaġistrati bhala Qorti ta’ Ġudikatura Kriminali jkun fiha ‘inter alia’ l-artikolu tal-liġi li jikkontempla rreat u mhux l-artikolu tal-liġi LI JIKKONTEMPLA LPIENA. Issa is-sentenza kjarament tindika, fost artikoli oħra , l-art. 338 (gg) tal-Kap.9 għal dak li jirrigwarda ir-reat kontemplat fl-imputazzjoni dwar id-daqq tal-mużika wara l-11 p.m. Huwa ċar ukoll illi bit-talba għas-sospensjoni jew skwalifika tal-liċenzja kif miġjuba mill-Pulizija fiċ-ċitazzjoni, ilProsekuzzjoni kienet qed invoka l-art. 30 tal-Kap.9 li effettivament jagħti s-setgħa lill-ewwel Qorti li , fiċċirkostanzi kontemplati fil-paragrafi (a) u (b) tassubartikolu (1) ta’ l-imsemmi Art. 30 tiswalifika lillħati milli jkollu jew milli jikseb liċenzja kif hemm imsemmi. Fi kliem iehor l-ewwel Qorti KELLHA ssetgħa li tiskwalifika lill-appellant mill-liċenzji dwar daqq ta’ mużika; dak li ġara kien sempliciment li, evidentement bi żvista, il-Qorti tal-Maġistrati ċċitat artikolu tal-liġi flok ieħor. Dan, però kif ingħad ma jġibx għal xi nullita’ fis-sentenza. Il-piena applikata – ssospensjoni tal-liċenzja - kienet waħda li l-ewwel Qorti setgħet legalment tinfliġġi fiċ-ċirkostanzi tal-każ 26

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u l-fatt li ġie kkwotat artikolu b’ieħor, b’riferenza għall-piena (mhux għal fatti li jammontaw għar-reat) ma jġibx bħala konsegwenza li dik il-parti tassentenza, fejn si tratta dwar is-sospensjoni tal-liċenzja għandha neċessarjament tiġi varjata. An interesting case was that of Il-Pulizija vs Lawrence Camenzuli,27 wherein the appellant was accused of not allowing his wife access to their matrimonial home. The Court of Magistrates found him guilty of the charge brought against him and by application of article 22 of Chapter 446 of the Laws of Malta acquitted him with the condition that he must return a copy of the key of the house within two weeks from the judgment. However, according to the Court of Criminal Appeal, article 22 of Chapter 446 of the Laws of Malta provides that the only condition which can be imposed on the accused when given a conditional discharge is that he does not do a crime within the period of which he is discharged. Therefore, according to the Court: Sabiex l-ewwel Qorti setgħet tagħmel l-ordni li lappellant jagħti kopja taċ-ċavetta tad-dar msemmija lil martu, tali ordni kellu jsir skond l-artikolu 377 talKap. 9 tal-Liġijiet ta’ Malta. Skond l-artikolu 382 talKap. 9, meta Qorti tagħti s-sentenza kontra l-imputat, ‘għandha tgħid il-fatti li tagħhom dan ikun ġie misjub ħati, tagħti l-piena u ssemmi l-artikolu ta’ dan il-Kodiċi jew ta’ kull liġi oħra li tkun tikkontempla r-reat’. Bil-mod kif iddeċidiet l-ewwel Qorti ġiet illi naqset milli tagħti piena peress illi filverita`, għalkemm għamlet referenza għall-artikolu 22 tal-Kap. 446, hija ma applikatx, jew naqset milli tapplika korrettement, il-provvedimenti ta’ dak lartikolu. Konsegwentement ma ġiet inflitta l-ebda piena fuq l-appellant u s-sentenza appellata hi nulla. Għalhekk din il- Qorti sejra tittratta l-każ mill-ġdid.

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4.3 Articles of the law The third requisite provided for by the legislator in article 382 is that the judgment must stipulate the articles of the Criminal Code or of any other law creating the offence. As afore mentioned, in section 4.2 of this article, local Courts have held that article 382 only stipulates that the judgment must quote the articles creating the offence and not the articles contemplating the punishment. Our Courts have always held that failure to quote the article or articles creating the offence in question in the judgment, will result in the nullity of the judgment itself. In Il-Pulizija vs Anthony Zahra the Court held that: In-nuqqas ta’ indikazzjoni tal-artikoli tal-liġi skont lartikolu 382 tal-Kodiċi Kriminali jammonta għal nuqqas ta’ formalita’ sostanzjali sollevabbli millQorti ‘ex officio’ anke jekk l-appellant ma jilmentax min-nullita’ tas-sentenza. In fact, the Court of Criminal Appeal in Il-Pulizija vs Joseph Cutajar,28 was very clear and held that; Illi l-artikolu hawn fuq imsemmi [referring to Article 382 of the Criminal Code] jagħmilha ċara li l-artikolu tal-liġi għandu jissemma. Dan mhux każ ta’ ‘lapsus calami’ iżda dan hu każ ta’ nullita’ tas-sentenza msemmija. Our Courts have held that the articles referred to in article 382 need only be mentioned in the judgment itself and not in the summons. For instance, in Il-Pulizija vs Saviour Borg D’Anastasi,29 the Court held that: lli dwar l-aggravju li hu ma ġiex mgħarraf bl-artikoli tal-liġi jew regolamenti li taħthom kien qed jiġi akkużat, dan hu manifestament infondat għax dan mhux rikjest bil-liġi. Di fatti l-art.360 (2) tal-Kodiċi

28 29

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Kriminali li jiddisponi x’għandu jkun fiha iċċitazzjoni, ma jsemmix dan ir-rekwiżit fost id-dettalji kollha li jinkludi li għandhom ikunu inklużi fiċċitazzjoni, kuntrarjament għal dak li hu provvdut flart. 382 tal-istess kodiċi li jgħid li is-sentenza għandha issemmi ‘l-artiklu ta’ dan il-Kodiċi jew ta’ kull liġi oħra li tkun tikkontempla r-reat’ vot li ġie osservat mill-ewwel Qorti fis-sentenza Tagħha. This was explained better in Il-Pulizija vs Gary Grech, wherein the Court held that; L-appellant jissottometti li la ċ-ċitazzjoni oriġinali ma tindikax l-artikoli li abbażi tagħhom ħargu lartikoli, spetta għall-ewwel Qorti li dawn tispeċifkahom fic-ċitazzjoni li fiha hemm miktub issentenza minn idejn il-Qorti stess. L-artikolu 382 tal-Kap 9 jesiġi li jkunu inidkati lartikoli li tagħhom imputat ikun instab ħati. Iżda mkien ma jorbot lill-Qorti lil dawn tniżżilhom fuq iċċitazzjoni fejn tkun kitbe is-sentenza b’idejha. Lewwelnett l-ebda artikolu tal-Kap 9 ma jirrkjedi li ssentenzi jinkitbu fuq ic-citazzjoni nnifisha u t-tieni mhux l-ewwel darba li s-sentenza ma tinkitibx fuq iċċitazzjoni, speċjalment meta l-Qorti tkun tirrikjedi aktar ħsieb jew ma tinkitibx dak in-nhar stess taludjenza u l-każ ikun iddefirit għal data oħra għassentenza. B’danakollu l-artikolu jridu jidhru fis-sentenza. F’dan il-każ jidhru fis-sentenza dattilografata li ġġib ukoll il-firma tal-istess Maġistrat ġaladarba fis-sentenza dattilografata hemm imniżżlin l-artikoli, l-artikolu 382 kien soddisfatt u għalhekk il-Qorti qed tirrispingi din il-parti tal-ewwel aggravju.

There are various instances when the third requisite as stipulated in Article 382 of the Criminal Code will not be satisfied: 30

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(i)

Mistakenly quoting the article of a different law than that of the law creating the offence

An instance where the requisites of article 382 will not be satisfied is that if the Court of Magistrates in delivering judgment mistakenly quotes the article of a different law instead of the legal provision creating the offence. For instance in the case Il-Pulizija vs Fiona Marie Aquilina,31 the Court of Magistrates mistakenly stated that the Articles under which it found the appellant guilty were under the thirteenth Schedule of the Criminal Code, when in reality the Articles under which the appellant should have been found guilty were to be under the Value Added Tax Act.32 As a result the Court of Criminal Appeal held that: L-ewwelnett din il-Qorti tosserva illi meta l-ewwel Qorti ċċitat l-artikoli li taħthom kienet qed issib ħtija, hija ċċitat l-artikoli 51, 77(o) u 82 u l-partiti 1, 2, 3 u 10 tat-Tlettax-il Skeda tal-Kap. 9. Evidentement dan huwa żbaljat peress illi l-imputazzjoni dedotta kontra l-appellant hija miġjuba taħt il-liġi tal-VAT (Kap. 406 tal-Ligijiet ta’ Malta) u mhux taħt il-Kodiċi Kriminali. Din il-kwistjoni timpinġi fuq il-validità o meno tassentenza appellata, u tista’ titqajjem, kif qiegħda titqajjem, minn din il-Qorti ex officio. Kif osservat, l-ewwel Qorti ċċitat artikoli taħt liġi differenti minn dik li taħtha l-appellanti ġiet akkużata. F’dawn iċ-ċirkostanzi għalhekk is-sentenza appellata tirriżulta difettuża minn wieħed mir-rekwiżiti essenzjali kontemplati fl-artikolu 382 għall-validià ta’ sentenza. Dan għalhekk irendi s-sentenza appellata nulla. (ii)

Mistakenly quoting an inexistent article or indicating another article by mistake

Another instance which would result in the annulment of a judgment delivered by the Court of Magistrates, would occur when the Court 31 32

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quotes an inexistent article or indicated another article by mistake, as this would be equivalent to the Court not having quoted the article contemplating the offence. In fact in Il-Pulizija vs John Sultana,33 the Court held that: S’intendi jekk l-artikolu tal-liġi ċitat fis-sentenza jkun jew ineżistenti jew jiġi ċitat artikolu b’ieħor, dan ikun daqs li kieku l-artikolu tal-liġi li jikkontempla r-reat ma ġiex indikat. Hekk jidher li ġara f’dan il-każ; lArtikolu 338(zz) tal-Kodiċi Kriminali ma jeżistix. Lartikolu tal-liġi li jikkontempla r-reat ipotizzat flimputazzjoni huwa l-Artikolu 338(z). Kif ġie dejjem ritenut minn din il-Qorti, tali difett jammonta għal nuqqas ta’ formalità sostanzjali b’mod li jkun applikabbli s-subartikolu (3) ta’ l-Artikolu 428 talKodiċi Kriminali. In Il-Pulizija vs Kenneth Borg,34 the Court of Magistrates indicated article 45(1)(d) of Chapter 399 of the Laws of Malta as the article contemplating the offence when instead it should have indicated article 35A of the same chapter, seeing that the former article does not exist. The Court of Criminal Appeal held that: Huwa minnu illi l-Artiklu kkwotat mill-Maġistrat 45 (1) (d) tal-Kap 399 ma jeżistix, hu ovvju illi lMaġistrat kellu jnizzel 35A tal-Kap 399. Il-Qorti tqis dan l-iżball bħala lapsus tal-Maġistrat illi forsi kien distratt sforz l-għagla jew il-pressjoni ta’ xogħol anke bl-ammont ta’ kawżi u nies jistennew fl-Awla illi dak il-ħin faċli tieħu żball bħal dan, però tajjeb jew ħażin żball bħal dan dejjem ġie meqjus bħala nuqqas ta’ formalità sostanzjali li jġib miegħu n-nullità tasSentenza appellata, hekk qalet il-kawża fl-ismijiet IlPulizija vs George Camilleri tas-16 ta’ Ġunju 1995, ‘L-indikazzjoni żballjata ta’ l-Artiklu tal-Liġi li jikkontempla r-reat li tiegħu persuna tkun ġiet misjuba ħatja ġie dejjem ekkwiparat fil-ġurisprudenza ta’ din il-Qorti ma nuqqas ta’ tali ndikazzjoni għal 33 34

Court of Criminal Appeal, 2 March 2001 Court of Criminal Appeal, 14 November 2013 188

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finijiet ta’ l-Artiklu 382 tal-Kodiċi Kriminali. Dan innuqqas ta’ formalità sostanzjali li jġib bħala konsegwenza n-nullita tas-Sentenza appellata u smieħ mill-gdid fil-meritu tal-kawża minn din il-Qorti mittermini ta’ l-Artiklu 428 (3). In Il-Pulizija vs Carmelo Farrugia u Patrick Farrugia,35 the Court of Magistrates erroneously indicated the article contemplating the crime of ragion fattasi when instead according to the accusations brought against the appellants it should have indicated the article contemplating voluntary damage to property. As a result the Court of Criminal Appeal in its sentence reiterated that: Il-fatti miġjuba fl-imputazzjoni jipotizzaw ir-reat ta’ ħsara volontarja fil-proprjeta`, li huwa reat kompletament separat u distint minn dak ta’ eżerċizzju arbitrarju ta’ pretensjonijiet. Kif ġie dejjem ritenut minn din il-Qorti, l-indikazzjoni żbaljata ta’ lartikolu tal-liġi li jikkontempla r-reat li tiegħu persuna tkun ġiet misjuba ħatja jammonta għal nuqqas ta’ indikazzjoni tal-artikolu tal-liġi għallfinijiet tal-Artikolu 382 tal-Kodiċi Kriminali (ara, fost oħrajn, Il-Pulizija vs Mario Agius App. Krim. 3/2/1995; Il-Pulizija vs Mary Grech App. Krim. 7/7/1995). Dana n-nuqqas ta’ formalità sostanzjali jġib bħala konsegwenza n-nullità tas-sentenza appellata u s-smiegħ mill-ġdid fil-mertu minn din ilQorti fit-termini ta’ l-Artikolu 428(3) tal-imsemmi Kodiċi. Anqas jista’ jingħad f’dana l-każ li lewwel qorti kienet qed issib lill-appellant ħati ta’ ragion fattasi bħala reat inferjuri iżda kompriż u involut f’dak ipotizzat. Kif diġa ngħad, iż-żewġ reati huma f’dan il-każ separati u distinti. Għalkemm huwa veru li l-istess att materjali jista’ jagħti lok għar-reat ta’ ragion fattasi jew għal reat ieħor (per eż., ħsara volontarja, serq) u jekk ikunx hemm dana r-reat ta’ ragion fattasi jew dak ir35

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reat l-iehor ikun jiddependi mill-intenzjoni ta’ l-aġent (Il-Pulizija vs John Portanier, App. Krim. 29/4/1998), b’dana kollu ma jistax jingħad li r-reat ta’ ragion fattasi huwa kompriż u involut f’dak ta’ ħsara volontarja jew viċe versa.

Effects of Article 382

As indicated above, the lack of any of the formalities enunciated in article 382 will lead to the nullity of the judgment delivered by the Court of Magistrates since these requirements are essential for the validity of the judgment. The Court of Criminal Appeal in cases where either ex officio or through the grievances of the appellant regards that the Court of Magistrates failed to adhere with the requirements stipulated by article 382 would first of all annul the judgment delivered by the Court of Magistrates and then the Court of Criminal Appeal would either continue to hear the case itself or else it will send back the case to the Court of Magistrates so that the case would be heard again from the beginning. In the former case, the Court of Criminal Appeal would continue to hear the case itself according to article 428(3) of the Criminal Code, 36 and would proceed to determine the merits of the case. However, in this case, the Court of Criminal Appeal in delivering judgment would be still bound by the judgment of the Court of Magistrates in the sense that if the Court of Magistrates in its judgment would have declared that the accused is not guilty of any of the accusations brought against him, then the Court of Criminal Appeal in its judgment should confirm this in its appeal judgment. As was explained by the Court of Criminal Appeal in IlPulizija vs James Demanuele;37 36

Article 428 (3) of the Criminal Code states that if the superior court finds that the inferior court, being competent to deal with the case, declared that it was not so competent, it shall quash the judgment, and shall proceed to determine the merits of the case. The same procedure shall be followed where the superior court finds that a breach or an omission of any of the formalities prescribed by the law under pain of nullity, or otherwise substantial, has taken place. 37 Court of Criminal Appeal, 26 November 2009 190

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Illi skond ġurisprudenza kostanti ta’ din il-Qorti nnuqqas li jsir dan jimporta n-nullità tas-sentenza appellata. Dan għaliex dan-nuqqas jammonta għal nuqqas ta’ formalità sostanzjali. F’ każ simili dan jintitola lil din il-Qorti li tħassar is-sentenza w tgħaddi biex tiddeċiedi l-kawża mill-ġdid fuq il-mertu skond l-artikolu 428 (3) tal-Kodiċi Kriminali (ara f’dan is-sens: ‘Il-Pulizija vs Paul Cachia’ [25.9.2003]; ‘Il-Pulizija vs Joseph Zahra’ [9.9.2002]; ‘Il-Pulizija vs Benjamin Muscat’ [10.7.2002 u 28.6.2002] ‘Il-Pulizija vs Donald Cilia’ [24.4.2002] u oħrajn), b’ dana però li fejn l Ewwel Qorti tkun illiberat minn xi imputazzjoni, dik il-parti tibqa’ treġġi. Dan għaliex, kif ġie ritenut minn din ilQorti diversament preseduta Mill-Onor Imħallef (illum Prim’ Imħallef) V. De Gaetano fl-appell kriminali ‘Il-Pulizija vs Charles Micallef’ [23.6.1995]:Tali tħassir japplika biss għal dik il-parti tas-sentenza fejn l-appellant instab ħati. Dan hu hekk peress li, lewwelnett, l-artikolu 382 tal-Kodiċi Kriminali jesiġi li tiġi indikata d-dispożizzjoni tal-liġi biss fejn tkun qed tinstab ħtija u mhux ukoll f’ każ ta’ liberazzjoni; u ttieni nett, il-għaliex kieku kien mod ieħor, ikun qiegħed indirettament jiġi estiż id-dritt ta’ appell ta’ lAvukat Ġenerali bi ksur ta’ l-artikolu 413(10)(b). In the second case, that is, when the Court of Criminal Appeal decides to send back the case to the Court of Magistrates, the case would be heard again afresh from the Court of Magistrates as though the case is being heard for the first time before a court of justice.

Ex officio

The importance of Article 382 is underscored by the fact that the validity or otherwise of a judgment in terms of article 382 can be 191

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raised ex officio. In fact, in Il-Pulizija vs Paul Cachia,38 the Court of Criminal Appeal held that: Illi qabel xejn, għalkemm l-appellant ma adduċa ebda aggravju dwar dan, din il-Qorti osservat illi l-Ewwel Qorti fil-parti dispożittiva tas-sentenza ċċitat biss lartikoli tal-liġi taħt il-Kap. 37 u taħt l-Att dwar itTaxxa tal-Valur Miżjud li jirrigwardaw biss is-sejbien ta’ ħtija tal-ewwel imputazzjoni w dana għalkemm kienet sabet ħtija wkoll taħt l-erba` imputazzjonijiet loħra dedotti kontra l-appellant li jaqgħu taħt liġijiet oħrajn. Issa dan in-nuqqas jimporta n-nullità tassentenza appellata għax ma ġiex rispettat il-vot talliġi indikat fl-artikolu 382 tal-Kodiċi Kriminali. In other words, the Court can annul a judgment delivered by the Court of Magistrates on appeal even if no grievance was adduced in that sense and this shows that our Courts have regarded the requirements found in Article 382 of a fundamental importance.

Conclusion

The general rule adopted by the Court of Criminal Appeal is to try and uphold the validity of judgments delivered by the Court of Magistrates especially when no prejudice has been suffered by the accused. However, when the judgment delivered by the Court of Magistrates has one of the essential requisites mentioned by article 382 lacking then the Court of Criminal Appeal must annul that judgment since the requisites mentioned by article 382 are not mere formalities but are necessary requisites for the validity of the judgment itself. Thus, the Court of Magistrates when delivering judgment must adhere to the requisites mentioned by article 382 and as interpreted by our Courts.

Court of Criminal Appeal, 25 September 2003; Vide Il-Pulizija vs Fiona Marie Aquilina, Il-Pulizija vs Fiona Marie Aquilina, 15 September 2010 192

DATA PROTECTION LAW The Right to be Forgotten: Bringing the Data Protection Directive into the Internet Search Engine Era Ann Marie Spiteri

Ann Marie Spiteri

THE RIGHT TO BE FORGOTTEN: BRINGING THE DATA PROTECTION DIRECTIVE INTO THE INTERNET SEARCH ENGINE ERA ANN MARIE SPITERI

_______________________________________________________ Dr Ann Marie Spiteri obtained her LL.D. degree from the University of Malta in 2010. In early 2011 she was admitted to the Maltese Bar, and worked with a local firm, focusing mainly on court litigation. Between 2012 and 2013 she read for an Advanced Masters in International Criminal Law at Leiden University, The Netherlands, where she focused her research on international criminal procedure and defence rights. Dr Spiteri formed part of the defence team of Mico Stanisic, former Minister for the Interior of Serbia, in his appeal at the International Criminal Tribunal for Former Yugoslavia (The Prosecutor v Mico Stanisic and Stojan Zupljanin). Dr Spiteri is a registered trial observer with the International Centre for Trade Union Rights and a member of the Peace and Justice initiative. Dr Spiteri is also a practicing lawyer and a thesis examiner within the Faculty of Laws. ____________________________________________________________________

Introduction

Contrary to the human default of forgetting, the internet has an iron memory. This became even more clear after the advent of internet search engines, which enable individuals to compile a rather detailed profile of data subjects by exercising a simple name-based search, finding information that they would not have otherwise found without the use of the search engine. For this reason, search engines can be regarded as having a dual identity: champions of the freedom of information on the one hand and agents of surveillance on the other.1 Information about individuals which finds its way on the internet will be impossible to remove, and thanks to the search engine technology, it remains ubiquitous for decades. 1

B Van Alsenoy, A Kuczerawy and J Ausloos, Search Engines after Google Spain: Internet@liberty or privacy@peril? ICRI Working Paper Series, Working Paper 15/2013 (Lueven, 6 September 2013) 5 195

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This precise issue was at the heart of the reference for a preliminary ruling made to the Court of Justice of the European Union (herein referred as the ‘CJEU’) in the Google Spain case, where a Spanish national was seeking to have links to information published about him decades earlier removed, claiming that this information was no longer relevant. In what proved to be one of the most controversial cases of 2014, the CJEU recognized the existence of a right to be forgotten stemming from the Data Protection Directive, and confirmed that individuals do have a right to have links to information about them removed, if certain conditions are met. Strangely though, while recognizing that this would entail the balancing of competing rights, the CJEU left it wholly up to the internet search engine service provider to decide on such requests.

The Catalyst: Google Spain SL ,Google Inc v Agencia Espanola de Proteccio de Datos (AEPD), Mario Costeja Gonzales2

2.1 The facts of the case In 1998, La Vanguardia, a newspaper which is widely circulated in Spain, published two announcement regarding a realestate auction arising out of attachment proceedings due to social security debts in its printed edition, on the order the Spanish Ministry of Labour and Social Affairs which wanted to attracts as many bidders as possible. The announcements referred to Mario Costeja Gonzales as being the owner of one of the properties. Sometime later, the newspaper was made available online by the publisher, prompting Costeja Gonzales in November 2009 to lodge a complaint with the newspaper due to the fact that when his name was inputted in the Google search engine links appeared to the pages of the newspaper contained the real-estate auction announcements. He contended that the attachment proceedings which related to his social security debts had been concluded many 2

Case C-131/12, Google Spain SL, Google Inc. v Agencia Española de Protección de Datos (AEPD), Mario Costeja González [2014] 196

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years ago, and were no longer of any relevance, and asked for the erasure of the data. La Vanguardia denied his claim, arguing that the announcements were published on order of the Spanish ministry of Labour and Social Affairs and thus erasing the data would not be appropriate. Following the newspaper refusal to erase the data in question, Costeja Gonzales contacted Google Spain, requesting that search results for his name and surname stop showing links to the newspaper containing the announcements that had been ordered by the Ministry. Google Spain forwarded the request to Google Inc, arguing that the internet search service was provided by the latter, and that therefore it was the entity who could decide on Costeja Gonzales request. This led Costeja Gonzales to lodge a complaint with the Spanish Data Protection Agency (Agencia Española de Protección de Datos, herein referred as the ‘AEPD’) against the newspaper as well as Google Spain and Google Inc. He requested that the newspaper be ordered to remove the data in question, and that Google Spain or Google Inc. be required to remove or conceal any links to the data. He argued that now that his social security debts issue had been fully resolved and the attachment proceedings concluded, reference to them was entirely irrelevant and he therefore had a right to have the data removed. In a decision dated 30 July 2010, the Director of the AEPD rejected the complaint against the newspaper, stating that since the announcements had been lawfully published, the newspaper had no obligation to remove them. However, the complaint against Google Spain and Google Inc., was upheld and they were ordered to remove the links complained of, on the basis of the argument that search engine operators are data controllers, and as such subject to the Data Protection Directive,3 therefore being under the obligation to remove links to data upon a request by the data subject. Google Spain and Google Inc. lodged separate appeals against the decision of the Directors of the AEPD before the National High Court of Spain (Audiencia Nacional). Apart from 3

Directive 95/46/EC on the protection of individuals with regard to the processing of personal data and on the free movement of such data, L 281 , 23/11/1995 P. 0031 – 0050 197

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basing their appeal on the territorial scope of the Data Protection Directive and the legal position of a search engine service provider under the Directive, they also argued that there exists no right to have lawfully published material erased. The appeals were joined by the Spanish Court, which then stayed the proceedings, referring to the Court of the Justice of the European Union (CJEU) for a preliminary ruling on a number of questions regarding the interpretation of the Data Protection Directive, in particular whether the Directive provides for a right to be forgotten. 2.2 Opinion of Advocate General Jääskinen4 The Advocate General began by noting that the role and legal position of internet search engines has not yet been expressly regulated by law, but held that this notwithstanding, their legal position must be analysed in light of the legal principles regulating the limitations on liability of internet service providers.5 He argued that the advancement made in the field of information dissemination and accessibility by internet search engines is a double-edged sword. On the one hand, universal accessibility of information on the internet relies on these search engines, which make the dissemination of data considerably easier and far more efficient. On the other hand, internet search engines may be used for extensive profiling of individuals, by searching for and collecting their personal data, a fear which was the source of inspiration for the development of modern data protection laws. 6 The Advocate General held that proper examination of whether there exists a right to be forgotten requires consideration of the right to protection of personal data in Article 8, right to respect for private and family life in Article 7, freedom of expression and information as protected in Article 11 (and both with respect to the freedom of expression of publishers of web pages and the freedom of internet users to receive 4

Case C-131/12, Google Spain SL, Google Inc. v Agencia Española de Protección de Datos (AEPD), Mario Costeja González [2013], Opinion of Advocate General Jääskinen 5 ibid, paragraphs 37-38 6 ibid, paragraphs 45 198

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information), and the freedom to conduct a business in Article 16. Indeed, the rights of data subjects in Articles 7 and 8 will need to be juxtaposed against the rights protected by Articles 11 and 16 of those who wish to disseminate or access the data. The Advocate General opined that even if the Court were to disagree with him and find that internet search engine service providers are data controllers within the meaning of Article 2(d) of the Directive, Articles 12(b) and 14(a) of the Directive do not provide for a right to be forgotten. Article 12(b) provides for a right to erasure, rectification or blocking of personal data if its processing does not comply with the Directive, in particular because of its incomplete or inaccurate nature, and therefore it was inapplicable in the case at hand, because there was no contention that the information in the announcements was incomplete or inaccurate. Even Article 14(a), which provides for the possibility of having data erased or blocked ‘on compelling legitimate grounds’ could not be held to provide for a right to be forgotten according to the Advocate General. He held that the purpose of processing and the interests served by [the dissemination of personal data], when compared to those of the data subject, are the criteria to be applied when data is processed without the subject’s consent, and not the subjective preferences of the latter. A subjective preference alone does not amount to a compelling legitimate ground within the meaning of Article 14(a) of the Directive. As such, the Advocate General concluded that the Directive does not provide for a right to be forgotten as claimed by Costeja Gonzales. This notwithstanding, the Advocate General held that since internet search engine service providers process personal data which is displayed on third-party web pages, such process can amount to an interference of Article 7 of the Charter, which enshrines the right to respect of one’s private and family life, home and communication, and therefore it is necessary to assess whether such an interference is justified in light of the competing rights of

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freedom of expression and information and the right to conduct a business.7 With regards to an individual’s right to freedom of information, the Advocate General considered that when an internet user inputs the data subject’s name and surname in an internet search engine, ‘the internet user is actively using his right to receive information concerning the data subject from public sources for reasons known only to him’.8 He concluded that in contemporary information society, the right to search information published on the internet by means of search engines is one of the most important ways to exercise that fundamental right. This right undoubtedly covers the right to seek information relating to other individuals that is, in principle, protected by the right to private life such as information on the internet relating to an individual’s activities as a businessman or politician. An internet user’s right to information would be compromised if his search for information concerning an individual did not generate search results providing a truthful reflection of the relevant web pages but a ‘bowdlerised’ version thereof.9 On the basis of these considerations, and considerations relating to freedom of expression and the right to conduct a business, the Advocate General concluded that ‘the particularly complex and difficult constellation of fundamental rights that this case presents prevents justification for reinforcing the data subjects’ legal position under the Directive, and imbuing it with a right to be forgotten’.10 In particular, the Advocate General advised the CJEU against reaching the conclusion that a satisfactory balance of all the rights in question could be found on a case by case basis, and to not place the burden of such decisions on internet search engine service providers as this would amount to a restriction of the right to 7

ibid, paragraphs 112-119 ibid, paragraphs 130 9 ibid, paragraphs 131 10 ibid, paragraphs 133 8

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freedom of expression of the web pages’ publishers, leaving such publishers with no adequate legal protection.11 2.3 The CJEU Ruling In its ruling of the 13 May 2014, the CJEU decided to depart from the opinion of the Advocate General and found that not only are internet search engine service providers processers and controllers of data within the meaning of the Directive, but also recognized the existence of a right to be forgotten. The Court’s finding that an internet search engine service provider is a data controller was a significant one because it departs from the notion that such service providers are just passive reporters of information collected and made available by other users, bringing internet search engine service providers within the scope of applicability of the Directive. The Court considered that it is the search engine operator which determines the purposes and means of the processing of personal data carried out by the search engine in the context of its activities and as such it must be regarded as controller within the meaning of the Directive, especially since it would be contrary to the wording and objectives of the Directive to exclude internet search engines service providers from its applicability, when, through a broad definition of ‘controller’ the Directive sought to ensure effective and completely protection of data subjects. The Court referred to the decisive role that internet search engines play in the overall dissemination and accessibility of information, including to internet users who without the search engine would not have found the webpage where the relevant information is published. It held that internet search engines may enable internet users to compile a more or less detailed profile of the data subject through the list of results given by the search engine which generally contains a structured overview of the information that can be found about that particular data subject on the internet. 12 Answering the question relating to the existence of a right to be forgotten, the Court, unlike the Advocate General, found that ibid, paragraphs 133 – 137 Google Spain SL, Google Inc. v Agencia Española de Protección de Datos (AEPD), Mario Costeja González, paragraphs 32 – 41 11 12

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Article 12(b) of the Directive could indeed be applicable in a situation such as that of Costeja Gonzales. It held that incompatibility with the Directive in the processing of data does not result only from data which is inaccurate or incomplete as suggested by the Advocate General, but also when the data is inadequate, irrelevant or excessive in relation to the purpose of the processing, when the data is not kept up to date or when it is kept for longer than is necessary unless the data is needed to be kept for historical, statistical or scientific purposes. The Court held that from this it follows that even if data would have been originally lawfully processed, it may still eventually become incompatible with the directive, in particular when it is no longer relevant in the light of the time that would have elapsed. It held therefore that a data subject has a right to ask for the erasure of links to this data to be erased from the list of results, and such request must be complied with if the ‘information appears, having regard to all the circumstances of the case, to be inadequate, irrelevant or no longer relevant, or excessive in relation to the purposes of the processing at issue carried out by the operator of the search engine’ thus recognizing the existence of a right to be forgotten. 13 The Court disagreed with the Advocate General that the rights to freedom of expression and information and the right to conduct a business override the right to privacy in these circumstances. On the contrary it held that a data subject’s fundamental rights under Articles 7 and 8 of the Charter will, as a rule, override the economic interests of internet search engine service providers and even the interest of the general public in finding that information, when the information that the data subjects is requesting to be excluded from the list of search engine results is be inadequate, irrelevant or no longer relevant, or excessive in relation to the purposes of the processing at issue carried out by the operator of the search engine. Exceptions to this rule were held to be permissible by the court, depending on the circumstances of the case, when it appears that the interference with the data subject’s rights is justified by the preponderate interest of the general public in having access to that information. 14 13 14

ibid, paragraphs 92 – 95 ibid, paragraphs 97 202

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On the basis of these considerations the Court confirmed the existence of a right to be forgotten and ruled that in order to comply with Articles 12(b) and 14(a) of the Directive, search engine service providers must remove from the list of results links to third-party web pages when the provisions in those articles are satisfied, even when the publication on the third-party web pages itself is lawful. 15

The Aftermath: Google’s Response to the CJEU’s Google Spain ruling

The CJEU’s ruling in Google Spain proved to be rather controversial, becoming one of the main talking points of 2014. The publicity given to the ruling raised public awareness on the issue and the recognition of the existence of a right to be forgotten quickly became quite popular with internet users and Google was inundated with requests to remove search results following the ruling. From the date of the ruling till the 1 March 2015, Google received almost a quarter of a million requests for search removals, removing 40.4% of the URL evaluated.16 In order to implement the ruling, Google issued a ‘take down’ request form, an quickly began to assess requests, even though it advised that it would take some time to consider how to properly implement the ruling. Other search engines, such as Microsoft and Yahoo! quickly followed suit. However, the way the ruling was being implement quickly showed that the right to be forgotten is indeed no memory charm. Google decided to issue a notice for all results, warning users that ‘some results may have been removed under data protection law in Europe’, possibly leading to the creation of paranoia among users, who are always on the alert that the data subject in question is trying to hide information from them. Furthermore, Google adopted a practice of informing publishers when it takes down links following requests 15

ibid, paragraph 3 of ruling --, ‘European privacy requests for search removals’ (Google Transparency Report) <http://www.google.com/transparencyreport/removals/europeprivacy/> accessed 1 March 2015 16

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for take downs, which can easily lead to backlash, even if unintended, against the data subject by the publisher of the third party website. A simple post on a website that some of its content will not show up in a google search because a particular individual ‘forced’ Google to remove the URLs in question in order to hide information about him from the public will undoubtedly create suspicion. To make matters worse, some media organisations are responding to a take-down notification from Google by maintaining details of links removed and sometimes even providing summaries of the relevant content, for easy online access. Furthermore, Google insisted that decisions regarding take-down requests European Google domains, thereby greatly restricting the scope and applicability of the take-down decision. Soon after the ruling, Google convened a council of experts, including Frank La Rue, the United Nations Special Rapporteur for the Promotion and Protection of the Right to Freedom of Opinion and Expression, in order to seek advice on the principles that Google ought to apply when deciding individual cases. The Council issued its report on the 6 February 2015, advising Google on how to balance an individual’s right to privacy and the public’s interest in access to information.17 In its report, the Council advised Google to evaluate delisting requests on the basis of four primary criteria, which recognize no hierarchy amongst them, and with each individual criterion not being determinative on its own. These criteria are the data subject’s role in public life, the nature of the information, the source of the information and the time. The Council makes a clear distinction between individuals who have no discernible role in public life, advising that requests from such individuals are more likely to justify de-listing, and individuals with clear roles in public life, in which case de-listing in unlikely to be justified since the public will tend to have an overriding interest in finding information about them through namebased searches. The Council also referred to individuals who role in public life is a grey area; people with a limited or context-specific 17

The Advisory Council to Google on the Right to be Forgotten (6 February 2015) < https://drive.google.com/file/d/0B1UgZshetMd4cEI3SjlvV0hNbDA/view> accessed 1 March 2015 204

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role in public life and individuals who are related to people playing a role in public life. The Council advises that in such cases, the content of the information being listed should bear more weight in a de-listing decision, as it is the content of the information which is more likely to determine whether the request should be accepted or not.18 When dealing with the nature of the information relating to a delisting request, the Council suggests some types of information that creates a bias in favour of accepting the request, and others that create the exact opposite kind of bias. However, even with those types of information that create a strong bias in favour of accepting a de-linking request, the role of the data subject in public life tends to have a great bearing on the decision making process, bar specific circumstances, such as private contact or identification numbers, information deemed sensitive under EU Data Protection Law, information that appears in image or video form and private information about minors, who enjoy special privacy considerations under the United Nations Convention on the Rights of the Child. With regards to the types of information that create a bias towards a public interest, the Council strongly discourages delisting information that is related to political, religious and philosophical discourse, underling the strong public interest in sharing and disseminating opinions freely on such matters. Discussing delisting on information about criminal matters, the Council advises that information about human rights violations and crimes against humanity should weight against de-listing.19 It is unclear why the Council chose to omit other crimes which have been considered to be serious crimes of concern to the international community, such as war crimes and genocide, but the assumption is that since these crimes are at the same scale of gravity and public concern as crimes against humanity, information about such crimes would also weight against de-listing. The Council considered that in assessing whether there is a legitimate public interest in links to information obtained by means of a name based results, particular consideration has to be given to the source of the information and the motivation behind its 18 19

ibid 7-8 ibid 9-13 205

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publishing. A presumption against delisting information contained in government websites and in journalistic entries operating under journalistic norms and best practices is created in the Council’s report, which concludes that there is a great margin of public interest in accessing this type of information. 20 The criterion of time draws from the CJEU’s ruling which made express reference to the relevance of the information as a requirement for the continuing lawful processing of that information. The Council held that this criterion is particularly important with regards to information of criminal matters, arguing that the severity of the crime may suggest an ongoing public interest in the information.21 However, as had already been pointed out in the Council’s report itself, some countries regulate the processing of data relating to criminal matters specifically, and in those cases that specific law should prevail. What remains unclear from the Council’s report is what ought to happen in cases where the domestic law regulates the concealment or deletion of convictions after a specified passage of time on official documents, such as criminal records, but does not regulate the processing of this data on other means. This leads to the question of whether a request to delink information about a criminal conviction of a data subject should be upheld, after the statutory time period according to which this information should remain visible on the individual’s criminal record would have elapsed. The Council’s report also dealt with a critical issue in respect of delinking requests, which the CJEU’s ruling remained dead silent about, that is, the procedure to be followed by the internet search engine service provider, or at least, the procedural principles to be observed, when deciding on delinking requests. The procedural elements listed in the Council’s report aim at imbuing a semblance of legality in the procedure that would have to be undertaken by Google in order to process delinking requests, drawing on key principles such as accessibility of information for making delinking requests, transparency and the availability of a right of appeal. The Council advised that that not only should the information about delinking requests be easily accessible and intelligible to data 20 21

ibid 13 ibid 14 206

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subjects, but also that the delinking request forms should provide optional fields to accommodate any further relevant information that the data subjects might want to give about their request, in order to facilitate the public interest balancing test which Google would have to undertake. The Council suggested what information data subjects should be required to include in the delinking request form and advised that data subjects must give their consent to the processing of this information.22 Taking into account the concerns raised during the public consultation process, the Council advised that the search engine should inform, to the extent permissible by law, the affected webmasters about decisions taken by it to delist information. In some complex cases, the Council even suggested that the webmaster should be notified prior to the internet search engine service provider reaching a decision, as this would improve the quality of the decision, by giving additional context and as such improving the accuracy of the decision.23 In this regard, the recommendations of the Council went directly against the Guidelines on Implementation published by the Article 29 Data Protection Working Party which expressly states that ‘search engine managers should not as a general practice inform the webmasters of the pages affected by de-listing of the fact that some webpages cannot be acceded from the search engine in response to specific queries. Such a communication has no legal basis under EU data protection law’.24 According to these Guidelines webmasters have limited, if any at all, interest in receiving communication from an internet search engine service provider about a de-linking decision because firstly such a decision only has a limited impact and secondly because webmasters can make limited use of such communication as they have no control or influence over the processing operation carried out by the controller. The Guidelines argue that search engines do not even recognize a legal right of webmasters to have their contents indexed or ibid 15 – 16 ibid 17 24 Guidelines On The Implementation Of The Court Of Justice Of The European Union Judgment On ‘Google Spain And Inc v Agencia Española De Protección De Datos (Aepd) And Mario Costeja González’ C-131/12, Article 29 Data Protection Working Party (14/EN WP 225) adopted 26 November 2014, paragraph 23 22 23

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displayed.25 There is agreement however on the issue of ‘difficult cases’, whereby the Guidelines also suggest that in the cases it might be legitimate to contact webmasters before reaching a decision, when it would be necessary to get a fuller understanding of the case.26 Due to the controversy created by the fact that deciding on delinking requests was left at the hands of internet search engine service providers, the Council pointed out in its report that assessing legal removal requests is not a new phenomenon but an actual established norm, and in some cases even expected behavior of search engines in contexts outside of data protection. The Council advised that a right to appeal delinking decisions should not only be enjoyed by data subjects but also by publishers, since delinking decisions affect their rights and interests.27 The geographic scope for delisting has been one of the most controversial issues in the struggle for the implementation of the CJEU’s ruling. Although many criticized Google for applying delisting decisions only on European version of Google, the Council backed Google’s decision, holding that this will as a general rule protect the rights of data subjects adequately, given the current state of affairs and technology. The Council considered that internet users outside of Europe have a competing interest to access information through a name-based search in accordance with the laws of their country which might be in conflict with the delisting procedure afforded in the European Union, and these competing interests outweigh the additional protection afforded to data subjects. It also explicitly rejected a proposal to prevent internet users in Europe from accessing search results delisting under European law, expressing concerns that this could set a dangerous precedent, possible giving repressive regimes to possibility of locking internet users into a heavily censored version of search results. 28 This suggestion also went directly against the Guidelines on Implementation of the Article 29 Data Protection Working Party, which expressly held that ‘limiting de-listing to EU domains on the 25

ibid ibid 27 The Advisory Council to Google on the Right to be Forgotten (n 17) 18 28 ibid 18 – 20 26

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grounds that users tend to access search engines via their national domains cannot be considered a sufficient means to satisfactorily guarantee the rights of data subjects according to the judgment’.29 It stressed that de-listing decisions must be implemented in a way that ensures that EU law cannot be easily circumvented, and that guarantees the effective and complete protection of the rights in question. In fact it is difficult to understand why Google is refusing to apply de-linking decisions outside of European domains, other than as a way of showing its opposition against the ruling. When links are removed from Google under United States copyright law, the de-linking decisions affects all Google domains and not just the United States one. There is therefore no reason as to why Google cannot adopt the same approach in terms of the right to be forgotten; in the same that it ensures effective protection of intellectual rights by giving global effect to its decisions, it should ensure that privacy rights are effectively protected by giving a similar global effect to its decisions. The final procedural element listed by the Council is transparency. It left at the discretion of internet search engine service providers the decision to provide a notice to internet users that search results may have been subject to a delinking request, provided that such a notice is generally not to reveal information about a particular request. The Council also advised that search engines should give information about the general policy of the search engine regarding delinking and anonymized statistics, always making sure that the data subjects’ rights are not compromised. Finally, the Council advised that delinking decision should always give detailed reasons for the decision. 30 This report came under fire due its backing of Google’s practice to implement delinking decisions only on European versions of Google. In fact, Isabelle Falque-Pierottin, chair of the French Data Protection Agency (Commission Nationale de l’informatique et des Libertés) stated that Google would be acting illegally if it did not remove links globally and that Google could 29

Guidelines On The Implementation Of The Court Of Justice Of The European Union Judgment On ‘Google Spain And Inc v Agencia Española De Protección De Datos (Aepd) And Mario Costeja González’(n 24) paragraph 20 30 See above note 15 pg 21. 209

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face judicial action if it continued to insist on engaging in this practice.31 Since the report has only recently been published however, and negotiations are still underway, it is still early to say what effect this report might have on the implementation of the CJEU’s ruling.

Legal Considerations Regarding the Ruling

The CJEU’s ruling has received a substantial amount of legal criticism, on practically every aspect of the decision, from the classification of internet search engine service providers as data controllers within the meaning of the Directive to the procedural aspect linked with order that Google is to decide on delinking requests in accordance with the Directive. All the criticism united around the one belief that the court completely got it wrong. However, this criticism ignores the fact that the ruling is a fair and reasonable interpretation of the Directive and the deeply held privacy values enshrined in it.32 It is argued here that what the CJEU did get wrong in its ruling is not the recognition of the existence of a right to be forgotten, but the practical aspect of the ruling which shifts on a private commercial entity the burden to adopt rules and decide on issues which affect the exercise and protection of fundamental human rights. 4.1 Recognising the existence of a right to be forgotten The CJEU has been criticised for creating an inexistent right in its Google Spain ruling and of prioritising privacy rights over

Murah Ahmed, Richard Waters and Duncan Robinson, ‘Google risks legal action over “right to be forgotten” report’ The Financial Times (6 February 2015) < http://www.ft.com/intl/cms/s/0/3db91400-ae15-11e4-919e00144feab7de.html#axzz3TBfLwxif> accessed 1 March 2015 32 Court Of Justice Of The European Union Creates Presumption That Google Must Remove Links To Personal Data Upon Request — Case C-131/12, Google Spain SL v. Agencia Española de Protección de Datos (2014) 128:735 Recent Cases, Harvard Law Review 738 – 739 31

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nearly all rights by creating an assumption towards data erasure. 33 However, these criticisms fail to take into account two fundamental concepts. Firstly, human rights law is not static; it is a body of laws that develops to reflect developments in society, in order to ensure that the rights enshrined in the law remain practical and effective and are not reduced to a theoretic and illusory legal statement with the passage of time. As such, there was nothing out of the ordinary in the CJEU interpreting the Data Protection Directive and the Charter of Rights in such a way that the rights protected therein remain practical and effective even in the era of internet search engines, especially considering that the Data Protection Directive predates internet search engines, thus requiring a degree of judicial activism in order to remain effective in the constantly changing digital landscape. Secondly, the court’s interpretation is a faithful reflection of the underlying values of the Directive, which subordinates the free flow of data to the aims of the Directive, that is, the protection of the fundamental rights and freedoms of natural persons, and in particular their right to privacy. 34 It should also be considered that the right to be forgotten is not an entirely novel concept. In fact, the possibility of a right to be forgotten started being discussed in the 1990s, as being part of the ‘admirable products of European thinking and law-making’.35 Furthermore, before the advent of internet search engines and the proliferation of social media platforms, individuals were already feeling the need to protect their privacy and identity when they suddenly, and temporarily, entered the public limelight, exercising

See for instance Martin Husovec, ‘Should We Centralize the Right to Be Forgotten Clearing House?’ [2014] Centre for Internet & Soc’y 8; Steve Peers, ‘The CJEU’s Google Spain Judgment: Failing to Balance Privacy and Freedom of Expression’ (EU Law Analysis, 13 May 2014) <http://eulawanalysis.blogspot.co.uk/2014/05 /thecjeus-google-spain-judgment-failing.html> accessed 1 March 2015; --, ‘EU Court Enshrines “Right to Be Forgotten” in Spanish Case Against Google’ (Reporters Without Borders, 14 May 2014) <http://en.rsf.org/union-europeenne-eu-court enshrines-right-to-be-14-05-2014,46278.html> accessed 1 March 2015 34 See above note 32, 740 35 DH Flaherty, ‘Controlling Surveillance: Can Privacy Protection Be Made Effective?’ in PE Agre and M Rotenberg (eds) Technology and Privacy: The New Landscape (Cambridge 1998) 172 33

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what was referred to a droit a l’oubli.36 As a result of the exercise of a droit a l’oubli for instance, the Swiss Federal Tribunal enjoined a play about the life of a murderer who had been sentenced to death from being broadcast, after a descendant of the criminal opposed its broadcast, arguing that it would harm him personally by intruding in his private sphere.37 While it is true that the exercise of a right to be forgotten may restrict someone else’s right to freedom of expression or information, this does not necessarily mean that the CJEU was wrong in recognising the existence of this right. The only fundamental right that is absolute and knows of no exception is the prohibition of inhuman or degrading treatment or torture. Every other right, including the right to life, admits exception. With regards to the right to freedom of speech, it has been recognised that the law must balance respect for private life on the hand, and the rights to freedom of expression and information on the other, 38 which is an argument reflected in the CJEU’s ruling. In fact, the ECHR has held that ‘where a question arises of interference with private life through publication in mass media, the state must find proper balance between the two Convention rights’ with the Court’s function being that of examining whether the state struck the proper balance between the rights in question. 39 Thus it is clear that the idea that the rights to freedom of expression and information can be restricted to safeguard the right to privacy of an individual is not an irrational idea of the CJEU, as seems to be suggested by the critics of the decision, but one which has for years been accepted and implemented by the ECHR without much fanfare and censorship accusations. The great importance given to the right to privacy by the CJEU was required in order to faithfully interpret the Directive, which does give the right to privacy stronger protection than the right to information. However, the CJEU itself pointed out that this right to be forgotten is in no way absolute, and can be restricted in order to ensure that the rights to freedom of expression and information and also safeguarded. 36

H Graux, J.Ausloos and P Valcke, The Right to be Forgotten in the Internet Era, ICRI Working Paper Series, Working Paper 11/2012 (Lueven, 12 November 2012) 37 X v. Societe Suisse de Radio et de Television, BGE 109 II 354 (1983) 38 E. Barendt, Freedom of Expression (OUP 2005) 230 39 KVN v. Sweden, Application Number 9248/81 (ECHR, 26 March 1987) 212

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4.2 Conflation of responsibilities What was particular about this case, as underlined by La Rue in his individual comments attached to the Council of Expert’s report,40 is that the CJEU tasked Google with establishing itself a procedure according to which requests for delinking information are to be handled, and the criteria which such decisions must follow. This goes against a fundamental precept of human rights law, according to which it is States which have the primary responsibility of protecting and guaranteeing fundamental human rights. 41 In fact, Jimmy Wales, another member of the Google Advisory Council, expressed strong opposition against the legal situation being created by the CJEU’s ruling wherein a commercial entity is being forced to judge our fundamental rights of expression and privacy. 42 Not only is the ruling untenable in terms of responsibility for human rights protection, it also undermines the principles of legality and transparency which must be observed when restricting fundamental human rights.43 By transferring to Google, a private commercial entity, the obligation and power to establish those rules and procedures to be followed when a request for delinking data is made, the CJEU blurred the line between the public and private sphere, expecting a private commercial entity to have law making powers. A basic tenet of human rights law is that any restriction of a fundamental human right must be provided for clearly and expressly in the law.44 If we accept that a request to delink data about oneself, in order to protect one’s right to privacy, can amount to a restriction of the right of others to freedom of opinion or information, it would therefore be a sine qua non requirement that the possibility of an individual to make such a request, and the procedure to be followed 40

See above17, Frank La Rue, Comments on the Report on the Right to be Forgotten, 29 41 See for instance: Sean Bradshaw et vs L-Avukat Generali et, Qorti Kostituzzjonali, 6 February 2015 42 See above note 17, Jimmy Wales, Comments on the Report on the Right to be Forgotten 27 43 See for instance: Rotaru v. Romania, Application number 28341/95 (ECHR, 4 May 2000) paragraph 55 44 ibid 213

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in assessing it, be provided for in the law. Thus, by placing on Google the burden of establishing the appropriate procedure and criteria to be followed in these cases, the CJEU failed to take into account one of the most fundamental principles of human rights law, a principle which is widely accepted by the various human rights treaty bodies. A number of alternative ideas and technical proposals that were put forward by expert witnesses to Google during the Council of Experts hearings, clearly show that experts in the field have been wracking their brains in order to find appropriate solutions that take into account these fundamental notions. In fact their proposals borrowed from rules and procedures already in place within various legal systems, in order to suggest the establishment of a mindboggling private system which operates private quasi-legal procedures and follows private quasi-legal criteria to adjudicate matters relating to fundamental human rights, in a way which is as consonant as possible with human rights law in the circumstances. Whereas it is true that ‘it shall be for the controller to ensure that the principles relating to data quality are complied with’,45 this does not mean that the data controller should be burdened with the responsibility of make human rights determination. As stated by the CJEU itself, deciding on a delinking request involves performing a balancing act between the fundamental right to privacy of the data subject, the webmasters right to freedom of expression, the public’s right to freedom of information and the internet search engine service provider’s right to conduct a business. Deciding on how to balance competing human rights claims goes far beyond ensuring compliance with principles relating to data quality, and should not be left at the discretion of private entities. This is especially so at this point in time, when the right to be forgotten is still in its embryonic stage and therefore no clear law or jurisprudence on the matter has yet been developed. In the future, when law and jurisprudence have set clear principles regarding the right to be forgotten, one can see how it would be feasible to have a mechanism whereby the data controllers could be the first to address delinking requests, naturally with judicial oversight in case the data subject 45

Directive 95/46/EC on the protection of individuals with regard to the processing of personal data and on the free movement of such data, Article 6 214

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feels aggrieved by the decision, or in case the data controller himself wants to refer a particularly complex case to the judicial organs or data protection agencies. However, at this point in time, the right to be forgotten still needs to develop legally, and allowing different internet search engine service providers to develop their own set of criteria, procedures and precedents will only undermine its proper development. The principle that the primary obligation to secure human rights is incumbent on the State, does not mean that no responsibility lies elsewhere. In today’s world, large private corporations can have a great impact on the human rights landscape of a country. Reflecting this, in June 2011 the United Nations Human Rights Council unanimously endorsed the United Nations Guiding Principles on Business and Human Rights (herein referred as the ‘Guiding Principles’) which are based on three pillars, that is: (1) The State’s duty to protect fundamental human against abuse through the appropriate laws, policies, regulation and adjudication; (2) The corporate responsibility to respect human rights, interpreted as involving the obligation at act with due diligence in order to avoid infringing on the rights of others in their operation and to address any adverse impacts they’re involved with. (3) The need for greater access to remedies, both of a judicial as well as of a non-judicial nature, for victims.46 Drawing on the Guiding Principles, one can surmise that a procedure which is more in line with the existing human rights framework than that concocted by the CJEU in its ruling would involve both the State and corporations. Naturally, providing a legal structure which recognize and protects the right to be forgotten is to be left to the State, as the entity with law-making power and the primary obligation to secure human rights. The obligations 46

Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy Framework’, United Nations Human Rights Office of the Commissioner, HR/PUB/11/14 (2011) 215

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incumbent on the corporations in questions would be that of acting with due diligence in order to give effect to this framework, an obligation which might be even more important in the future if owing to the development of clear principles regarding the right to be forgotten, it would be feasible, as argued above, to delegate to internet search engine service providers authority to process requests in the first instance, as this would require such service providers to follow faithfully the jurisprudence on the issue and also to exercise in good faith its discretion to refer to the data protection agencies or judicial authorities particularly complex cases, should the law allow for such a possibility.

Conclusion

As has been seen above, much of the criticism levelled against the CJEU’s ruling was more the product of hysteria than rational legal reasoning. The possibility of restricting the rights to freedom of expression and information had already been upheld by the ECHR almost twenty years prior to the CJEU’s ruling in Google Spain, and a semblance of the right to be forgotten, a droit a l’oubli, was already recognized in a number of countries, before the CJEU handed down its ruling. The real problem with the ruling was that it burdened the internet search engine service providers not only with deciding delinking requests themselves, but also with coming up with the appropriate framework for taking such decisions. This is a matter that should be left to the state, since restrictions of fundamental human rights are to be provided for in the law. The importance of a right to be forgotten should not be quickly discarded as it can be a useful tool to protect individuals against unreasonable interferences with their right to privacy, interference which can have a significant effect on their lives. When the initial panic about the novelty of the decision dies down, it will be useful for legal discourse to engage on how to properly put in practice the CJEU’s ruling, in order to ensure legality and transparency in delinking requests decision. Perhaps some years down the line, when the right to be forgotten will have developed beyond the embryonic stage that it is in now, it will be feasible to 216

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delegate to internet search engine service providers the authority to make first instance decisions with regards to de-linking requests, within a clear framework established by law. For now it remains to be seen how effective the right to be forgotten can be, particularly since without global implementation of de-linking decisions, the scope of these decisions is severely restricted.

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EUROPEAN UNION LAW

EU Citizenship: A Rightful Component Emanating from the Transition towards a Union or a too Far-Fetched Widening of the EU Fundamental Rights? Justine Calleja

Justine Calleja

EU CITIZENSHIP: A RIGHTFUL COMPONENT EMANATING FROM THE TRANSITION TOWARDS A UNION OR A TOO FAR-FETCHED WIDENING OF THE EU FUNDAMENTAL RIGHTS? JUSTINE CALLEJA ____________________________________________________________________ Dr Justine Calleja graduated as Doctor of Laws in November 2014, after having attained the Diploma of Notary Public and the Bachelor of Laws degree from the University of Malta. Between October 2013 and February 2014, Dr Calleja underwent a traineeship at the Court of Justice of the European Union and in May 2014 successfully defended her thesis entitled ‘The safeguarding of the Charter of Fundamental Rights in the drafting of EU legislation’. Dr Calleja is currently reading a Master degree in EU law at the University of Maastricht. Her main areas of EU law interests are migration and citizenship law, labour and social security law and human rights. ____________________________________________________________________

Introduction: What makes up EU citizenship?

In Grzelczyk, the Court of Justice of the European Union (herin referred as the ‘CJEU’ or the ‘Court’) defined EU citizenship as follows: Union citizenship is destined to be the fundamental status of nationals of the Member States, enabling those who find themselves in the same situation to enjoy the same treatment in law irrespective of their nationality, subject to such exceptions as are expressly provided for.1 Though the concept of EU citizenship owes its origins to the Treaty on the European Union (herein referred as the ‘TEU’), it was primarily in the first years of the millennium that a more concrete definition was given to such concept. This was done by means of the 1

Case C-184/99 Rudy Grzelczyk v Centre public d’aide sociale d’Ottignies-Louvainla-Neuve 2001 ECR I-06193, paragraph 31 221

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CJEU’s judgments, Directive 2004/38/EC (also known as the EU Citizenship Directive),2 the now legally binding Charter of Fundamental Rights, the launch of the Stockholm Programme which focused more on protecting the citizens - this meaning that the EU would strive to protect political rights rather than merely economic ones, the engagement of the Commissioner of the ‘Justice, Fundamental Rights and Citizenship’ Directorate-General and the adoption of ‘an ambitious policy programme aiming at removing obstacles to the exercise of EU citizenship rights adopted by the Barosso II Commission.3 Hence, EU citizenship was only ‘recently elevated to a central building block of the European polity edifice’.4 It is to be noted that EU and national citizenship are not complementary and they do not refer to one and the same thing, however they both continually modify ‘the common political and social space contained within’5 the specific borders. As Advocate General (AG) Maduro has held in Nekrowska ‘Citizenship of the Union must encourage Member States to no longer conceive of the legitimate link of integration only within the narrow bounds of the national community, but also within the wider context of the society of peoples of the Union’.6 Kostakopoulou describes how the institutions at first perceived the definition of nationality to be within the competence of the Member State, but later on the Court realised that it ‘had to function as an ‘adjustment centre’ between the claims of individuals, on the one hand, and of the Member States, on the other’.7 Though the Member States regulate how nationality can be attained or lost, such power could still be scrutinised by the CJEU, as the decision of 2

Council Directive 2004/38/EC of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States amending Regulation (EEC) No 1612/68 and repealing Directives 64/221/EEC, 68/360/EEC, 72/194/EEC, 73/148/EEC, 75/34/EEC, 75/35/EEC, 90/364/EEC, 90/365/EEC and 93/96/EEC 2004 OJ L158/77 (EU Citizenship Directive) 3 Dora Kostakopoulou, ‘When EU Citizens becomes Foreigners’ 2014 European Law Journal 447, 448 4 ibid 447 5 ibid 450 6 Case C-499/06 Halina Nerkowska v Zakład Ubezpieczeń Społecznych Oddział w Koszalinie 2008 ECR I-03993, Opinion of AG Maduro, paragraph 23 7 Kostakopoulou (n 3) 452 222

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the national authorities to grant or withdraw a nationality ‘falls, by reason of its nature and its consequences, within the ambit of European Union law’.8

The Landmark Judgments

In Zambrano,9 the Court found that the unwillingness of the national authorities to grant the father of two minor EU citizens a residence permit would necessarily result in his children being forced to leave the EU territory. Hence the CJEU held that the national authorities’ actions were tantamount to the deprivation of the genuine enjoyment of the minor children’s EU citizenship rights. In McCarthy10 the CJEU decided that ‘a static double national could not rely on her European citizenship in order to bring her situation into the scope of EU law’11 so that she could benefit from family reunification opportunities. This was so, unless the national measures implemented ‘would have the effect of depriving him of the genuine enjoyment of the substance of the rights conferred by virtue of his status as a Union citizen’.12 The need to establish the degree of interference is noted. In these two cases, the Court adopted the Rottmann approach, that is, ‘rather than trying to construct a cross-border situation, the Court focused on the implications of the national measures for the effective exercise of EU citizenship rights’.13 It Case C-135/08 Janko Rottman v Freistaat Bayern 2010 ECR I-01449, paragraph 42 9 Case C-34/09 Gerardo Ruiz Zambrano v Office national de l’emploi (ONEm) 2011 ECR I-01177 10 Case C-434/09 Shirley McCarthy v Secretary of State for the Home Department 2011 ECR I-03375 11 Sara Iglesias Sánchez, ‘Fundamental Rights and Citizenship of the Union at a Crossroads: A Promising Alliance or a Dangerous Liaison?’ 2014 European Law Journal 464, 474 12 Shirley McCarthy v Secretary of State for the Home Department (n 10) paragraph 56 13 Peter Van Elsuwege and Dimitry Kochenov, ‘On the Limits of Judicial Intervention: EU Citizenship and Family Reunification Rights’ 2011 EJML 443, 448 8

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was thus re-evaluating the scope of EU law, pressing on ‘for a substantial widening, although not for an absolute one’.14 The issue as to whether the specific facts fall within the remit of national or EU law would no longer be necessarily based on the rigid classification between cross-border situations on the one hand, and purely internal situations on the other hand. The ‘new’ test, which the Court adopted, is ‘an alternative way to consider the grounds of applicability of EU law’,15 based on the concept of EU citizenship. Even if the circumstances in question refer to a purely internal situation, the severity of interference may still warrant an examination to be carried out by the CJEU, and thus be brought within the scope of EU law. The ‘genuine enjoyment’ test studies whether there is a real threat of leaving the territory of the Union thus making the benefit of EU citizenship rights impossible. Unfortunately, the CJEU has adopted this test ‘without providing much information to explain this fundamental paradigm shift’.16 What the test successfully and rightly does, however, is that it ‘supplies a more logically coherent ground for the invocation of EU rules’.17 Despite this shift in protection afforded by the term EU citizenship and the ‘genuine enjoyment’ test, subsequent case law, such as Dereçi have redefined the protection afforded by this status to the extent that ‘an excessively narrow reading’18 is being adhered to by the Court. In Dereçi the court made it clear that despite the fact that it would be convenient to the EU citizen ‘for economic reasons or in order to keep his family together in the territory of the Union, for the members of his family who do not have the nationality of a Member State to be able to reside with him in the territory of the Union’,19 it is not enough a good reason to claim that if the right of residence is not granted to the family members, the EU citizen would be forced to leave. In McCarthy, the genuine enjoyment of Mrs. McCarthy’s citizenship right was not considered 14

Iglesias Sánchez (n 11) 475 Van Elsuwege and Kochenov (n 13) 451 16 ibid 17 ibid 18 Iglesias Sánchez (n 11) 476 19 Case C-256/11 Murat Dereci, Vishaka Heiml, Alban Kokollari, Izunna Emmanuel Maduike, Dragica Stevic v Bundesministerium für Inneres 2011 ECR I - 11339 15

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to be under threat, as ‘she enjoyed a stable residence in the UK’.20 The mentioned cases show how ‘Member States are free to put up any regulation as long as it does not profoundly undermine the status of EU citizenship and the rights associated therewith’.21These cases, particularly Dereçi, lead one to think that the ‘genuine enjoyment test’ will require facts which are similar to those of Zambrano, that is, wherein underage children will potentially be stripped of their EU citizenship status. Otherwise, ‘it may appear rather difficult to prove that a national measure deprives a person of his EU citizenship rights’.22 This would mean that it is only in such cases that the traditional cross-boundary link need not be established. Furthermore, the protection afforded by the strict implementation of the ‘genuine enjoyment’ test as redefined in the Dereçi case would result in a situation where reverse discrimination would be further pronounced. Reverse discrimination in family reunification scenarios refers to that situation wherein ‘a citizen of the Union could rely on fundamental rights under EU law when exercising an economic right to free movement as a worker, or when national law comes within the scope of the Treaty or when invoking EU secondary legislation, but could not do so when merely ‘residing’ in that Member State’.23 This situation may arise because of the division in competence, ‘but the rather blurred boundaries between situations falling inside or outside the scope of application of EU law largely undermine the legitimacy and predictability of the Court’s decisions’.24 This ambiguity is made clear by means of the Ymeraga case wherein, Mr Ymeraga, a now naturalised Luxembourg citizen, could no longer benefit from the possibility of family reunification made possibly with regards to third country nationals, via Directive 2003/86.25 Moreover, as an EU citizen, he

Van Elsuwege and Kochenov (n 13) 452 ibid 22 ibid 456 23 Case C-34/09 Gerardo Ruiz Zambrano v Office national de l’emploi (ONEm) 2011 ECR I – 1177, Opinion of AG Sharpston, paragraph 84 24 Van Elsuwege and Kochenov (n 13) 456 25 Council Directive 2003/86/EC of 22 September 2003 on the right to family reunification 2003 OJ L 251/12 21

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could not benefit from Directive 2004/3826 as he did not reside in a Member State other than that which he is a national.27 The Court held that the decision not to confer residence rights to Mr.Ymeraga’s relatives did not constitute the denial of ‘the genuine enjoyment of the substance of the rights conferred by virtue of his status as citizen of the Union’.28 Hence, the aspiration that the concept of EU citizenship would address the unfairness arising from reverse discrimination, as such concept surfaced ‘as a status able to grant a minimum degree of uniformity’29 was severally minimised because of the mentioned re-definition of the EU citizenship. It is argued that the phenomenon of reverse discrimination ‘is difficult to reconcile with a Union that is based on the rule of law and the principle of equal treatment.30

Issues at Stake

3.1 Is the ‘sacred’ division of competence being undermined? Authors like Van Elsuwege, Kochenov and Iglesias Sánchez believe that via the ‘genuine enjoyment test’, the CJEU is still adhering to the division of competence present within the Union. The reasoning given in cases like Zambrano leads one to agree with the Court, in that in those cases there was a link with Union law. Not granting a residence right to Mr.Zambrano would be tantamount to depriving the minor children from enjoying their EU citizenship status. Though it is not being argued that the case was unjust, as any action aimed towards the protection of human rights is not to be criticized, it is amply clear that it would be unwarranted to argue that ‘this rather revolutionary step has occurred without trespassing the limitations imposed by the horizontal provisions of the 26

EU Citizenship Directive (n 2) ibid, Article 2(1) 28 Case C-87/12 Kreshnik Ymeraga and Others v Ministre du Travail, de l’Emploi et de l’Immigration (Judgment of the Court (Second Chamber) of 8 May 2013), para 42 29 Iglesias Sánchez (n 11) 476 30 Van Elsuwege and Kochenov (n 13) 446-447 27

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Charter’,31 that is article 51 of the Charter. The teleological approach adopted by the Court in such a case is beneficial to the individual in question, but it cannot be said that such judgment does not stretch the competence limits so rigorously set out and safeguarded by the Member States. In this regard, the statement previously made by Fontanelli, that is that ‘it appears that the safeguards provided for in the horizontal clauses of the Charter will hardly suffice to contain the expansive force of EU competences’32 is agreed to. Fontanelli goes on to state that this ‘creeping expansion would not necessarily be motivated by a willingness to apply the Charter’.33 In cases such as Zambrano and those primarily based on the dictums of such a judgment, the motivation was that of defining and putting into practise the protection afforded by the (somewhat vague term) ‘EU Citizenship’. The approach adopted in such a case, though not necessarily outrightly infringing the limits of article 51, surely constitutes a competence creep. Iglesias Sánchez holds that the notion of citizenship denotes a move towards a federal system. She notes that the concept of citizenship has often been used to ‘fill the gaps’34 and bring about equality where EU law is not capable of doing so. Equal rights are being targeted and trying to be made compatible with the concept of allocation of competences when the EU itself was not initially created in order to protect human rights. The same author focuses on the proposal made by AG Sharpston in the Zambrano case. The AG argued that once the Member States have willingly granted competence to the EU in specific areas, ‘the European Union should have both the competence and the responsibility to guarantee fundamental rights, independently of whether those powers have in fact been exercised’.35 Such a situation, Sharpston argues, would do away with ‘the need to create or promote fictitious or hypothetical ‘links 31

Iglesias Sánchez (n 11) 476 Filippo Fontanelli, ‘The European Union’s Charter of Fundamental Rights two years later’ 2011 Perspectives on Federalism 27 33 ibid 34 Iglesias Sánchez (n 11) 466 35 Gerardo Ruiz Zambrano v Office national de l’emploi (ONEm), Opinion of AG Sharpston, paragraph 84 32

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with Union law’.36 This would constitute a ‘citizen-friendly attribute’37 in a ‘multi-layered system whose contours are neither obvious nor even decipherable to the eyes of the common citizen’.38 The teleological approach adopted in Zambrano rests on a set of specific goals which ‘remediate the lack of foresight in the letter of the Treaties’.39 In plain words, one could nearly always argue that the protection afforded by the right in question is in furtherance of the aims of the Treaties. This may bring about an undesirable situation. However, after referring to the values set out in article 2 TEU, AG Sharpston went even a step further. She held that in a Union ‘founded on fundamental rights and the rule of law, protection should not depend on the legislative initiative of the institutions and the political process. Such contingent protection of rights is the antithesis of the way in which contemporary democracies legitimise the authority of the State’.40 The protection afforded by EU fundamental rights should no longer hinge upon whether an obstacle which hinders the real enjoyment of such right is present, but the EU institutions should actively seek to promote and mainstream the protection of human rights in every situation. In such a situation, competence issues would no longer arise. In such a situation, competence issues would no longer arise, and thus the ultimate aim would be the real protection of fundamental rights. Furthermore, the threat of increase of reverse discrimination would, as Sharpston notes, no longer be present – there would be no distinction between EU citizens who had already made use of the protection provided by specific EU rights and other EU citizens who had not made use of such protection. It is clear that ‘the progressive visibility of EU fundamental rights, mostly through the Charter, together with the potentialities intrinsic to the status of EU citizenship, gives rise to high expectations on the part of citizens’.41 The EU citizens are constantly fighting to attain more rights. Iglesias Sánchez notes that 36

ibid, paragraph 167 Iglesias Sánchez (n 11) 471 38 ibid 472 39 ibid 40 Gerardo Ruiz Zambrano v Office national de l’emploi (ONEm), Opinion of AG Sharpston, paragraph 165 41 Iglesias Sánchez (n 11) 468 37

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the EU citizens’ perception of the level of protection afforded by EU fundamental rights would not suffice to change the present situation regarding fundamental rights and the doctrine of competences, however the citizens’ understanding of these two concepts cannot be ignored as such viewpoints ‘legitimate any attempt at evolution in the constitutional structure of the Union’.42 She rightly argues that despite the attempts made by the Union institutions to better explain the concept of EU citizenship in order for the citizens to feel that the Union is actually working for their benefit, ‘the complex legal design of the citizenship of the Union and of EU fundamental rights, leaves those citizens which turn to the Union in search of protection with an unintelligible response as to their status’.43 It has been held that ‘the introduction and development of the concept of citizenship has long been considered able to unleash the reconfiguration of the EU fundamental rights system, since the equality aspirations embedded within a concept of a common citizenship progressively push for a broadening of the scope of application of fundamental rights’.44 Despite the aforementioned conflicts with the division of competence doctrine, it is clear that EU citizenship is already paving the way for the widening of competence in order to provide adequate protection to all EU citizens. 3.2 Should EU citizenship encompass fundamental rights? Structurally, the concept of European citizenship and that of the protection of fundamental rights are separate from one another, this being evidenced by the fact that ‘the jurisprudential doctrines of EU citizenship and on EU fundamental rights have only rarely crossed paths in an explicit way’.45 It is difficult to explain how, more recently, the two have become connected by means of the CJEU case law, particularly because of the fact that the two doctrines have emanated from different backgrounds. The concept of European citizenship is primarily a political tool whereas the 42

ibid ibid 44 ibid 468 - 469 45 ibid 467 43

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concept of European fundamental rights owes its origins to the need to define the contours of the EU law doctrine of supremacy. National bodies, such as the German Federal Constitutional Court pushed in favour of (at the time) the concept of general principles, in order to ensure that the supremacy of Union law was not absolute and that it respected fundamental rights. Despite this difference, ‘their concurring goals, their common weaknesses, their openness and their far-reaching constitutional meaning tend to blur the contours of both legal doctrines’.46 Though the connection between the two is not always evident, Iglesias Sánchez argues that by time this convergence became inevitable, ‘since both share the ultimate objective of situating the individual at the centre of the constitutional construction of an integrated Europe’. 47 This push towards an emphasis on the protection of the European individual ‘has further been fostered by the political need to overcome the disaffection of citizens towards the European project’.48 Iglesias Sánchez notes that this link between fundamental rights and EU citizenship became evermore apparent when the institutions embarked on the task of drafting the Constitutional Treaty wherein a specific section was entitled ‘Fundamental Rights and Citizenship of the Union’. Though the said Treaty did not materialize and such a section did not feature in the Treaty of Lisbon, the Charter of Fundamental Rights, in its preamble, makes a clear reference to the fact that the Union is obliged to locate ‘the individual at the heart of its activities, by establishing the citizenship of the Union’.49 Iglesias Sánchez holds that the concept of European citizenship has not been explicitly mentioned within the provision delineating the protection of fundamental rights in the EU (that is article 6 TEU) due to the fact that citizenship rights are part and parcel of a bill of rights which focus on ‘the bonds between the individual and the political community of reference’.50 Despite this structuring, the connection between fundamental rights and European citizenship is still palpable. 46

ibid 466 ibid 465 ibid 49 Charter of Fundamental Rights of the European Union [2012] OJ C 326/391 50 Iglesias Sánchez (n 11) 465-466 47 48

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Kostakopoulou, argues that many academics have identified a connection between fundamental rights and EU citizenship. She recognises that EU citizens can rely on both, whether such EU citizens have made use of their right to free movement or otherwise, as long as such are invoked when the situation is not a purely internal one. Nevertheless, the author argues that ‘the tale of the evolution of the experimental institution of EU citizenship’51 needs to be accompanied with ‘a combination of hope and caution’.52 The prospect of EU citizenship emerging as ‘an open concept susceptible to an extensive reading that could pervasively encompass fundamental rights or the general principle of equality as part of the substantial content of citizenship of the Union’53 was discarded with the emergence of judgments such as Dereçi. This judgment leads one to think that the CJEU was making it clear that there was no necessary link between the EU citizenship status and the protection of fundamental rights, and that the EU citizenship status sought to ensure the protection of two kinds of rights emanating specifically from the status itself and not tied to the Charter, that is: the right not to be deprived of the status of Union citizenship and the right of never being subjected to an expulsion from the Union territory.54 It is not clear whether the Court adopted such an extensive approach in Zambrano knowing already that it will re-define the limits of the ‘genuine enjoyment’ test. However, the statement made by Iglesias Sánchez is agreed; had not a re-definition taken place via judgments such as Dereçi, it would mean that ‘any violation of fundamental rights would trigger the protection of the new formula’55 – any breach of fundamental right would mean that the genuine enjoyment of the EU citizenship status was not ensured. This would clearly not be in line with article 51 of the Charter. It is primarily because of the limits imposed by article 51 and the division of competence doctrine, that the Court devised ‘a strict and somewhat artificial separation between citizenship and rights that precludes a comprehensive and coherent construction of 51

Kostakopoulou (n 3) 448 ibid Iglesias Sánchez (n 11) 476 54 ibid 477-478 55 ibid 476 52 53

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the notion of the substance of the rights attached to Union citizenship’.56 Sticking to the Dereci narrow interpretation will not give rise to a realistic reading wherein violations of fundamental rights are correctly perceived as violations of citizenship rights. It has been held that the ‘obvious relation between EU fundamental rights and EU citizenship was completely denied in the Dereçi case.57 In fact the case seems to rely on the basis that ‘the substance of rights doctrine was never intended to protect EU citizens from anything other than expulsion from the Union.58 The same conclusion can be reached vis-à-vis the McCarthy case. The CJEU argued that the UK authorities’ unwillingness ‘to take into account the Irish nationality of Mrs. McCarthy for the purposes of granting her a right of residence in the United Kingdom in no way affects her in her right to move and reside freely within the territory of the Member States, or any other right conferred on her by virtue of her status as a Union citizen’.59 She would still be perfectly capable to legally live in the UK. In this regard it has been held that to ‘claim that the situation of Mrs. McCarthy is outside the scope of EU law because this particular right60 is not deemed to be infringed without scrutinising the effects of UK policy on her other rights is to reduce the rule of Ruiz Zambrano to its factual finding’.61 Despite this similarity, in Zambrano and McCarthy, unlike in Dereçi, it was never stated ‘that relying on respect for family life, or any other fundamental right, is insufficient to fall within the scope of EU law in the absence of a cross-border element’.62 Both considered such forced expulsion as only one of the instances where respect for EU citizenship is not ensured. Dereçi, the CJEU explicitly held that in order to confirm that the substance of the rights conferred by EU citizenship has not be duly regarded, the EU citizen has ‘to leave not only the territory of the Member State of 56

ibid 477 MJ van den Brink, ‘EU Citizenship and EU Fundamental Rights: Taking EU Citizenship Rights Seriously?’ 2012 LIEI 273, 282 58 ibid 59 Shirley McCarthy v Secretary of State for the Home Department (n 10), paragraph 49 60 That is the right to reside within the Union 61 Van Elsuwege and Kochenov (n 13) 455 62 van den Brink (n 57) 282 57

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which he is a national but also the territory of the Union as a whole’.63 It is argued that in coming to this conclusion the CJEU may have been basing itself upon AG Mengozzi’s strict interpretation. The AG had held that the ‘genuine enjoyment’ test or rather, as it is coined, the ‘substance of rights doctrine’64 has to respect the limits outlined in Article 6(1) TEU and article 51(2) of the Charter. This may be argued against as when it comes to the substance of rights doctrine, it is the EU citizenship doctrine which is tampering with the division of competence issue, and not the Charter - ‘the limited scope of the Charter will only complicate, and not necessarily prevent, the application of EU fundamental rights to EU citizens in purely internal situations’.65 Though, in theory, there is ‘nothing that obstructs the inclusion of EU fundamental rights in the substance of rights doctrine (which consequently refers to the EU citizenship concept), 66 future narrow interpretations such as that of Dereçi, ‘will not only deprive European citizenship from almost all substantive meaning but will also have worrisome effects for the protection of fundamental rights’.67 In this regard, Iglesias Sánchez has held that Court judgments and EU legislations have made it clear that, ‘the protection of family life through family reunification is one of the most relevant and tangible components of the status of Union citizenship, amounting to a truly (non-enumerated) citizenship right’.68 This is because an EU citizen will certainly not be able to enjoy the basic benefits of the EU citizenship status if his/her relatives, who are third country nationals are not given residence rights, as in such cases it could be reasonably argued that the EU citizen will truly consider leaving the Union territory in order to reunite with his/her family. In such cases, the decision not to confer residence to the third country national would indirectly constitute an infringement of the EU citizen’s right to reside in the Union as in such situation the EU citizen could feel that he/she has no choice but to leave the Union territory. This 63

Murat Dereci, Vishaka Heiml, Alban Kokollari, Izunna Emmanuel Maduike, Dragica Stevic v Bundesministerium für Inneres, paragraph 66 64 van den Brink (n 57) 283 65 ibid 284 66 ibid 285 67 ibid 68 Iglesias Sánchez (n 11) 479 233

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would certainly constitute a non-observance of the EU citizenship status, as ‘the right to be present in the Union as a whole has become part of the substance of that status’.69 Iglesias Sánchez holds that ‘bringing into the scope of EU law not only the cases where the ‘genuine enjoyment’ is absolutely deprived, but also seriously impaired, would enable proportionality and fundamental rights review in a wider range of situations’.70 This would do away with the problem of reverse discrimination. This relaxation of the strict rules would require a study of the relevant facts of the case in order to determine whether, in not conferring residence rights on third country nationals relatives of an EU citizen, the citizen in question ‘is forced to choose between his right to be present in the Union and his family life’.71 Though in theory this is a valid solution to the problem, in practise, it is not so straightforward, as many would easily rely on the argument that they are being forced to choose between the two. Van den Brink takes on the task of investigating ‘whether all EU fundamental rights are EU citizenship rights’.72 He argues that considering the fact that the concept of citizenship necessarily needs to be linked to a state’s non-infringement of fundamental rights, ‘recognising fundamental rights as EU citizenship rights would certainly give more meaning to European citizenship’.73 He thus advocates in favour of equating citizenship rights with fundamental rights, so as to be more in line with the more prominent status of the Charter. If the approach adopted in Zambrano is adopted and further extended, ‘an inclusion of fundamental rights into the substance of rights doctrine would create the possibility for EU citizens to rely on EU fundamental rights in any case’.74 There would no longer be a need to prove that in the situation at hand, the genuine enjoyment of the EU citizenship status has not been safeguarded. Van den Brink suggests that in order to ensure that the competences attributed to the EU are not extensively widened, EU fundamental rights 69

ibid ibid 478 71 ibid 72 van den Brink (n 57) 280 73 ibid 74 ibid 287 70

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incorporated within the concept of citizenship should only afford the most basic kind of protection and that such defence would only be used ‘as a last resort’,75 and only ‘when the protection of fundamental rights is not sufficiently guaranteed under national law’.76 Though, this approach would still constitute a widening of competence, such widening is carried out so as to ensure that the most basic form of protection of fundamental rights of EU citizens is ensured in any scenario, be it internal or otherwise. The suggested situation would result in a situation similar to that of the US Bill of Rights which has evolved into ‘the primary defender of fundamental rights’.77 Despite the fact that the federalized approach will inevitably be criticized, the benefits of such an approach cannot be underestimated, particularly because of the fact that it could also address the issue of reverse discrimination. This would be ideal in a Union based on ‘the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights’.78 It is clear that, to ensure the better protection of the rights of EU citizens, the approach adopted in Dereçi needs to be discarded, whereas that taken on in Zambrano needs to be adopted and further evolved. It would thus mean that ‘if the Court is willing to include EU fundamental rights in the substance of EU citizenship rights, a sufficiently serious infringement of a European citizen’s fundamental right will fall by its nature and its consequences within the ambit of Union law’. 79 3.4 Has EU citizenship truly provided for an alternative way of widening the scope of application of EU fundamental rights? 80 As held earlier, Union citizenship provides a certain layer of protection, ‘subject to such exceptions as are expressly provided

Iglesias Sánchez (n 11) 477 van den Brink (n 57) 287 ibid 288 78 Consolidated Version of the Treaty on European Union [2012] OJ C326/13, article 2 (TEU) 79 van den Brink (n 57) 289 80 This section will focus on the three instances put forward by Kostakopoulou in her (aforementioned) article 76 77

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for’.81 In this regard, the three instances that Kostakopoulou identifies provide an interesting discussion as one realises that despite the apparently extensive protection afforded by EU citizenship, the latter still has its limits. 3.4.1

A Member State is still allowed to determine what makes up its ‘nationality’

Kostakopoulou describes how the institutions at first attributed the definition of nationality to Member States, but later on the Court realised that it ‘had to function as an ‘adjustment centre’ between the claims of individuals, on the one hand, and of the Member States, on the other’.82 Cases like Rottmann started to emerge, after this reasoning. Though the Member States rule how a nationality can be attained or lost, such power could still be examined by the CJEU. It was held that the decision of the national authorities to grant or withdraw a nationality ‘falls, by reason of its nature and its consequences, within the ambit of European Union law’. 83 However, certain events gave rise to a different type of outcome. The accession of Eastern European countries brought about a situation in which nationals of Eastern European countries, which however were not also EU countries, would became foreigners and no longer permanent residents of the ‘new’ EU country. This is what happened for example to nationals of republics of the former Yugoslavia, who, up to the point of accession, were entitled to permanent residence in Slovenia. It is not being stated that a more inclusive standpoint had to be adopted as on the other hand stability and peace concerns arose when for instance Hungary was willing to grant extraterritorial citizenship to Hungarian nationals living in non-EU countries. Kostakopoulou argues that despite the concerns which arise in situations such as the ones just mentioned, ‘this conflicting practice does not reflect the contemporary reality of the widespread Rudy Grzelczyk v Centre public d’aide sociale d’Ottignies-Louvain-la-Neuve (n 1), paragraph 31 Kostakopoulou (n 3) 452 83 Case C-135/08 Janko Rottman v Freistaat Bayern 2010 ECR I-01449, paragraph 42 81

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acceptance of multiple nationality in the light of increasing human mobility and the ascendance of dual nationality into an international norm’.84 In this regard, if an individual has created links with a Member State, it would not be right if he ‘is automatically denied of social and political standing in the Community legal order’,85 simply because a Member State can decide to strip him off his nationality. There is not much that the concept of EU citizenship can do in such a case, as evidenced from a study of the Zambrano case. Mr.Zambrano, a Colombian national, could not rely on the fact that he did his best to integrate within the Belgian society. He was granted the right of residence on the basis that his minor children could no longer benefit from their status as EU citizens. Kostakopoulou states that ‘Conditioning EU citizenship on domicile for a period of five years in territory of the Union would make the social fact of community membership a true determinant of belonging’86 and ‘end the exclusion of long-term resident third country nationals’.87 The author argues that being unilaterally dispossessed of one’s own citizenship is not in line with the prominence of the status of EU citizenship. This is especially so when considering nationals of a non-EU country which have lived most, if not all of their life in an EU country. In this regard, Kostakopoulou holds that when examining the facts of the cases at hand, it is clear that the power attributed to Member States needs to be re-visited and EU citizenship should be based on domicile rather than nationality. This would allow the Member States to tackle the issue of diversity in a more systematic manner – diversity would be promoted not only by means of public campaigns et cetera, but also by the actions of the national authorities themselves. The EU would thus become ‘a true champion of the values of humanism, enhanced freedom and democratic life’.88 EU citizenship would indeed serve its purpose in such situations.

Kostakopoulou (n 3) 455 ibid 454 ibid 456 87 ibid 88 ibid 85 86

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3.4.2

Though subject to the CJEU’s scrutiny, a Member State is granted much leeway as to what constitutes a threat to its public security

The aforementioned Directive 2004/38 has strived to provide proper protection to an individual who has created strong links with the host Member State, particularly by means of article 28 thereof, which protects the individual from expulsion. Despite this positive move, some CJEU judgments fail to ensure that such articles are properly implemented. In this regard, basing her self on judgments such as Tsakouridis,89 Kostakopoulou expresses her concern that ‘the status of EU citizenship can become a meaningless normative category in the deportation field’.90In the mentioned case, the CJEU considered as appropriate the expulsion of an individual from the host Member State to his country of origin, on the basis of the commission of drug related offences even if the individual had spent by far the greater majority of his life in the host Member State. Hence, the CJEU interpreted article 28(3) in such a way that the individual was considered to constitute a major threat to public security, when in reality he was not, this is especially so when considering that the host Member State criminal justice system could easily subject the individual to a punishment without having to expel the individual out of the country. Therefore, when it comes to expulsion, the discretion conferred upon the national authorities ‘undermines the Citizenship Directive’s objective of strengthening the security of residence of long-term resident EU citizens thereby revealing the edges, and thus the limits, of EU citizenship’.91 3.4.3

When it comes to serious threats related to terrorism, an EU citizen should be allowed to attack any Member State infringement of any of his citizenship rights

A Member State may be involved in abduction operations with the Central Intelligence Agency, particularly in order to prevent Case C-145/09 Land Baden-Württemberg v Panagiotis Tsakouridis 2010 ECR I11979 90 Kostakopoulou (n 3) 459 91 ibid 460 89

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any terrorist action. In such cases there is a chance that the EU citizen could argue that the detention in question is depriving him of the genuine enjoyment of his citizenship rights and therefore the circumstances would be within the scope of EU law. Again, this shows how despite the fact that ‘national security remains the sole responsibility of each Member State’,92 a leeway could still be found for EU citizenship to provide the necessary protection to EU citizens. Kostakopoulou makes such assertions on the ground that previously such protection was not granted in specific cases. One of such cases was that of Mr El-Masri, a ‘German citizen, who was allegedly detained in Skopje for 23 days by Macedonian security agents and then transferred by CIA to Iraq and subsequently to Afghanistan’.93 The equalizing function of EU citizenship in these three instances seems to be put aside. Hence in such cases, EU citizenship cannot be (or has not as yet been) relied upon. If an individual can be so easily expelled, his/her nationality so readily erased or his deportation so effortlessly ordered ‘then the fundamental status of EU citizenship is just an abstraction’94 and as an ‘openly repudiated status can never be a fundamental one’.95 Nevertheless, it is acknowledged that the definition of EU citizenship is still a work in progress. Political interventions are required in order to obtain a balance between the Member States’ insistence that in the three mentioned scenarios competence needs to be attributed (as is) to the national authorities because of the sensitivity of the issues at stake (especially with regards to the third scenario), whilst on the other hand reconciling the exceptional approach adopted in these three situations with the ‘genuine enjoyment’ test devised in priory discussed judgments.

Treaty on the European Union, Aricle 4(2) Kostakopoulou (n 3) 461 94 ibid 462 95 ibid 93

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Conclusion

It is clear that EU citizenship cannot be regarded as merely a rightful component emanating from the transition towards a Union or simply as a political tool focused on intensifying the dwindling European sentiment. The Zambrano judgment clearly disproved such a perception. It is true that subsequent judgments such as Dereçi have severely hindered the progress which had been brought about by Zambrano, however, due to the flexibility of the ‘genuine enjoyment’ test, the test is ‘susceptible to be adjusted to further developments deemed necessary according to the ripeness of the integration process and the political climate’.96 Hence, the strict interpretation adopted in Dereçi may easily, eventually, be discarded. On the other hand, though academic debates have focused on the fact that EU citizenship may have lately been used (whether directly or otherwise) as a legitimate way of widening the scope of application of fundamental rights, the three instances mentioned above direct the reader to realise that the potential of EU citizenship has not been used in all circumstances. EU citizenship has not necessarily been used to legitimise a possibly too far-fetched widening of EU fundamental rights. Member States still seem to have the final say when it comes to what constitutes nationality and a threat to its public order and safety. The traditional strict separation of competences can no longer be applied in the present EU law scenario. Such widening will not only be sanctioned by means of the present and successive CJEU judgments, but also requires some kind of political intervention. In this regard the Member States need to recognise that for the Union to truly protect the values outlined in article 2 TEU the ‘genuine enjoyment’ test needs to be applied not only when citizenship rights have been ‘deprived but also seriously hindered’.97 This case-by-case approach would ensure that the element of equality inherent in the concept of citizenship is safeguarded, thus also ensuring that no fundamental rights have been violated. Such an 96 97

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approach would be in line with EU primary law as otherwise, the ‘complete incorporation of EU fundamental rights against Member States;98 would surely constitute a widening of the allocation of competences. As evident in this article strict separation of fundamental rights and EU citizenship would be unrealistic. Moreover, ‘Debates about the nature of European Citizenship are effectively debates about the nature and direction of European integration’.99 What makes up these two mentioned concepts and the relation between them will inevitably depend on what the actors ultimately make of it. It is however argued that the two should be made use of in such a manner as to ensure that any EU citizen would be allowed to utter the phrase advocated by AG Jacobs in Konstantinidis, that is ‘civis europeus sum’.100 An EU citizen would thus be allowed to use his status ‘against all Member States including his or her own in order to oppose any deprivation of the genuine enjoyment of the substance of the rights conferred by virtue of EU citizenship’.101

Ibid 476 Pedro Caro de Sousa, ‘Quest for the Holy Grail-Is a Unified Approach to the Market Freedoms and European Citizenship Justified?’ 2014 European Law Journal 499, 516 100 Case C-168/91 Christos Konstantinidis v Stadt Altensteig - Standesamt and Landratsamt Calw – Ordnungsamt 1992 ECR I-01191, Opinion of AG Jacobs, paragraph 46 101 Kostakopoulou (n 3) 450 99

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FINANCIAL SERVICES LEGISLATION

The Alternative Investment Fund Managers Directive in Malta: Past, Present... What next? Christopher P Buttigieg

The Proposed Fourth Anti-Money Laundering Directive: What has Changed? Stephanie J Coppini

Christopher P Buttigieg

THE ALTERNATIVE INVESTMENT FUND MANAGERS DIRECTIVE IN MALTA: PAST, PRESENT… WHAT NEXT? CHRISTOPHER P BUTTIGIEG ____________________________________________________________________ Dr Christopher P Buttigieg has a DPhil in Law Studies from the University of Sussex and is a lecturer in the Banking and Finance Department of the University of Malta. He is the Director of the Securities and Markets Supervision Unit of the Malta Financial Services Authority (MFSA). Dr Buttigieg was directly responsible for the negotiations of the AIFMD and led the MFSA team which was responsible for the implementation of the Directive in Malta. Dr Buttigieg would like to thank Dr Miriam Goldby, Queen Mary University of London, Dr David Fabri, University of Malta and Dr Esther Wandel, Financial Conduct Authority, for their comments on the content of the paper. The views expressed in the paper are solely those of the author at the time of writing and do not engage the MFSA. ____________________________________________________________________

Preamble1

This paper examines the Alternative Investment Fund Managers Directive (herein referred as ‘AIFMD’)2 from Malta’s perspective. It analyses the most significant points made by Malta during the process that led to the adoption of the AIFMD Level I and II text. The paper also examines the transposition of the AIFMD into Maltese Law and the implementation of the AIFMD in practice, from a supervisory perspective. The changes brought about by the AIFMD and the policy decisions made by Maltese authorities during the transposition process have strengthened the regulatory framework for investor protection and financial integrity in Malta. 1

The author was responsible for negotiating, transposing and implementing the AIFMD. The preparation of the paper has benefited from his experience in this field. The points made in certain parts of this paper have already been published by the author in the professional journal ‘The Accountant’ and the Malta Financial Services Authority’s Newsletter. 2 Directive of the European Parliament and of the Council (EC) 2011/61/EU on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 [2011] OJ L174/1

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Nonetheless, a number of challenges have resulted from the AIFMD, such as the absence of a depositary passport and the lack of convergence in the application of regulation. Malta has attempted to address these challenges through pragmatic solutions. However, more long-term solutions need to be identified and implemented at a European level if the internal market objectives of the directive are to be achieved more effectively. More than four years have passed since the Commission issued a proposal for an AIFMD, which formed part of the EU policy response to the 2007-2008 financial crisis. The crisis demonstrated that financial regulation was too lax and that the supervision of financial institutions was too fragmented. As a response to the crisis, the European Institutions implemented a significant revamp of the European regulatory framework by widening the scope of regulation and the extent of detail of substantive law applicable to securities markets, with the aim of ensuring a more stable and resilient financial system in Europe. In addition, the European Securities and Markets Authority (herein referred as the ‘ESMA’) became operative with strong powers to make regulation in the form of technical standards and the tools to force supervisory convergence at national level. ESMA was also vested with a de facto pan-European supervisory role for credit rating agencies and trade repositories and has the function of coordinating colleges of supervisors for central counterparties. The ultimate objective of the significant reform to regulation and supervision was that of strengthening investor confidence in the financial system and ensuring that the mistakes of the past, which caused the financial crisis, are not, as far as possible, repeated in the future. It is therefore not surprising that the new legislative initiates aim at addressing systemic risk issues in addition to investor protection, which was the main objective of securities regulation adopted at the start of this century as a result of the EU’s financial services action plan. The benchmarks for regulation and supervision have thus been heightened. In this regard, however, it is relevant to point out that while the alternative investment fund industry was not a major cause of the financial crisis, past failures that could have caused systemic risk, such as the failure of Long Term Capital Management in the US way back in 1998, justified regulatory

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intervention. The financial crisis gave policy makers the impetus to go-ahead with regulation in this field. The adoption of the AIFMD, which regulates the activity of all fund managers (herein referred as ‘AIFM’) that manage alternative investment funds (herein referred as ‘AIF’), is part of the European process for the strengthening of the financial system. An AIF is defined as a fund which is not regulated in terms of the UCITS Directive,3 which directive regulates retail collective investment schemes. The AIFMD seeks to give management companies access to the internal market on the basis of mutual recognition between Member States, which is contingent on quasimaximum harmonisation of regulation and regulatory and supervisory convergence. Malta, an EU Member State, is a jurisdiction of choice for international financial services, particularly in the funds sector with over 600 international funds, 70 fund managers and 27 fund administrators established in Malta. The scope of the AIFMD is wide and, as a consequence, it captures a significant part of the Malta industry. The following are the central themes of the paper and arguments made therein: 1. The implementation of the AIFMD has given Malta the opportunity to reconsider the structure of its regulatory framework applicable to collective investment schemes and their service providers. The outcome of this process was the adoption of an MFSA Rulebook, which is more complete and specific in terms of regulation that applies to particular areas of financial business and which addresses the risks that arise from the activities undertaken by licensed entities. The changes to the Rulebook implemented as part of the AIFMD implementation process have strengthened Malta’s regulatory framework for investor protection and the integrity of the financial system. 2. The AIFMD requires the depositary to be established in the Member State of the AIF.4 The lack of competition from external depositaries may result in inefficiencies and higher 3

Directive of the European Parliament and of the Council (EC) 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (recast) [2009] OJ L302/32 4 Directive 2011/61/EU on Alternative Investment Fund Managers, Article 21

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charges applied by local depositary business. The restriction on the free movement of depositaries impacts the development and growth of the funds industry in the affected Member States. Following the adoption of the AIFMD and UCITS V Directive 5 the extent of harmonisation of the activity of depositaries is sufficient to allow a framework for mutual recognition between Member States to operate effectively in this field, thereby creating a depositary passport. However, given the alleged importance of proximity of supervision of the depositary by the financial supervisor of the AIF, the depositary passport has been rejected. The paper proposes a solution for the establishment of a depositary passport which is based on mutual recognition that is contingent on: (i) harmonisation of regulation; (ii) the establishment of supervisory processes that are built on the principles of reflexive governance that leads to convergence; and (iii) the implementation of a system of colleges of supervisors for cooperation between financial supervisors established in terms of the ESMA Regulation.6 Financial regulation on its own is not enough to ensure investor protection and guarantee the integrity of the financial system. Supervision and enforcement action are equally important. Experience in financial supervision suggests that without supervision and enforcement, the industry may be inclined not to comply with regulation, which in turn may result in the failures of the past being repeated in the future. Ultimately, the financial crisis which created the impetus for the adoption of the AIFMD did not only result from inter alia a failure to regulate the shadow financial system but also from a failure to carry out effective supervision and to take enforcement action where necessary.

Directive of the European Parliament and of the Council (EC) 2014/91/EU amending Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as regards depositary functions, remuneration policies and sanctions [2014] OJ L257/186. 6 Regulation of the European Parliament and of the Council (EC) 1095/2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC [2010] OJ L331/84 248

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The practical implementation of the AIFMD has proven to be more challenging than originally anticipated. The processing of applications for authorisation as an AIFM in an environment which lacks European uniformity in the interpretation of certain aspects of regulation, such as the requirements on delegation, is one of the most significant challenges that the MFSA has faced to date in connection with AIFMD implementation. The nonexistent convergence of supervisory practices in the field of investment management has resulted in different approaches to supervision applied in Member States. Convergence of supervisory practices is fundamental if coherence in implementation is to be achieved and regulatory and supervisory arbitrage is to be avoided. Convergence of supervisory practices is an essential ingredient for the strengthening of mutual trust between Member States and is important if the internal market and regulatory objectives of the directive are to be achieved. In this connection, if the current debate on the future of financial markets in Europe is to result in a real Capital Markets Union (CMU), where European markets become more integrated and also become areal alternative to bank financing, 7 then the supervisory question in Europe must be re-assessed: Can the CMU become a reality while supervision in Europe remains fragmented and undertaken purely along national lines? Financial supervision in a dynamic financial environment presents a number of challenges, particularly the identification of risks and vulnerabilities to the financial system and investors, which may result from the business practices of licensed entities. The supervisory obligations to ensure compliance with new regulation, such as the AIFMD, cannot be underestimated. Unless mechanisms for supervision continue to evolve through cooperation and initiatives for convergence, and unnecessary supervisory hazards avoided, the risk of failure will be high. It is therefore a scine qua non that the mechanisms for supervision

European Commission, ‘Finance for Growth – Towards a Capital Markets Union’ (The EU Single Market, 6 November 2014) <http://ec.europa.eu/internal_market/conferences/2014/1106-financegrowth/index_en.htm> accessed 18 February 2015 7

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should constantly evolve and be adapted to the changing environment. The rest of the paper is subdivided into three additional sections. Section 1 briefly examines the Maltese experience during the AIFMD legislative process and the issues raised by Malta during the different stages of this process. Section 2 analyses the transposition of the AIFMD into Maltese law. Section 3 examines the challenges arising from implementation and how these were addressed by the MFSA in practice. Concluding remarks are made at the end of the paper including a note on how regulatory issues on the activity of the funds industry could shape the regulatory landscape in the future.

AIFMD Legislative Process

This section of the paper examines the most significant points made by Malta during the negotiation process which led to the adoption of the AIFMD level I and II text and is divided into two parts. Part 1.1 examines Malta’s concern regarding Europe’s failure to implement a depositary passport, which concern was raised during the debate in Council on the Level I text of the AIFMD. This part of the paper also gives some historical background on the issues surrounding the development of an internal market for depositaries. The debate on the depositary passport and the governance mechanisms that may be applied to make such a passport feasible is further examined in part 2.2.2 of section 2 of the paper. Part 1.2 analyses the points made by Malta on the letter-box entity requirements, which were debated during the discussions on the Level II text of the AIFMD. The difficulties in implementing requirements on letter-box entities and the importance of European convergence in this field are examined further in part 3.1 of section 3 of the paper.

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1.1 AIFMD Level I: The Depositary Passport The Commission’s proposal for the regulation of the alternative investment funds industry was published in April 2009. 8 It immediately became the subject of controversy, particularly with the hedge fund industry in London threatening to move outside the EU.9 The Commission’s proposal required greater transparency, restrictions on leverage, and a higher degree of capital held by fund managers. This specific regulation was required in order to fulfil EU policy-makers’ commitment to apply harmonised EU regulation in fields of finance which were largely unregulated before the financial crisis. However, the Commission’s proposal came under fire as having been prepared in haste and without proper consultation. 10 In particular, it tried to apply a one-size-fits-all regime to an industry which is characterised by very different types of players. The same points were raised by Member States during the meetings of the Council of the European Union and by MEPs at the European Parliament. Along the way, the various issues of concern raised during the initial stages of the debate were tackled through revisions to the Commission’s proposal. However, other concerns were triggered during this process. This was the case of the depositary passport, which was Malta’s main issue during the debate on the Level I text. The Commission’s proposal required the appointment of the depositary by the AIF which depositary would then have the role of safekeeping the assets of the fund and monitoring the activity of the fund manager.11 The proposal required the depositary to be a credit institution in the EU, thereby allowing free movement in the field of 8

Proposal for a Directive of the European Parliament and of the Council (EC) COM (2009) 207 final on Alternative Investment Fund Managers and amending Directives 2004/39/EC and 2009/…/EC [2009] <http://eur-lex.europa.eu/legalcontent/EN/TXT/PDF/?uri=CELEX:52009PC0207&from=EN> accessed 19 February 2015 9 Jones, ‘EU rules would see hedge funds go overseas’ Financial Times (2009) <http://www.ft.com/cms/s/0/31afa3c8-a645-11de-8c9200144feabdc0.html#axzz3SDaCMJ5w> accessed 19 February 2015 10 --, ‘Payback time’ The Economist (2009) <http://www.economist.com/node/14921335?zid=300&ah=e7b9370e170850b88ef12 9fa625b13c4> accessed 19 February 2015 11 Proposal on Alternative Investment Fund Managers and amending Directives (n 8)

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depositary services.12 As a result of discussions in Council, and at the specific request of a number of Member States, the text was amended to include a requirement that the depositary had to be established in the same Member State as the AIF.13 This created an issue for the Member States where the depositary industry was not yet fully developed, as the lack of competition from external depositaries would most likely result in inefficiencies and higher charges applied by the local depositary business. Moreover, it was Malta’s view that the restriction on the free movement of depositaries would have a serious impact on the development and growth of the funds industry in the affected Member States. 14 To better understand the issues surrounding the establishment of an internal market for depositaries, it is relevant at this stage to examine the historical context of the development of a depositary passport. Analysing the history is relevant to understanding the present position. The Commission’s first attempt to establish a depositary passport was made as part of the 1993 UCITS proposal, which recommended the creation of an internal market for depositaries of UCITS, thereby overcoming the regulatory limitation to mutual recognition with regard to this type of service provider. Further to the introduction of the Second Banking Directive 15 and the Investment Services Directive,16 which created an internal market for credit institutions and investment firms, it was felt that the necessary conditions had been established to allow UCITS the freedom to choose a depositary established in another Member State which had been authorised in terms of these Directives to provide safekeeping and administration services. On this proposed

ibid The author is the Director of the Securities and Markets Supervision Unit of the Malta Financial Services Authority and participated in the negotiations in Council on the Commission proposal for a Directive regulating alternative investment fund managers. 14 ibid 15 Second Council Directive (EC) 89/646/EEC on the coordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of credit institutions and amending Directive 77/780/EEC [1989] OJ L386/ 16 Council Regulation (EC) 93/22/EEC on investment services in the securities field [1993] 13

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development for the internal market in financial services the 1993 UCITS Proposal explained: When the Directive was adopted in 1985 the principles of the EC-passport for credit institutions and investment firms and of home country supervision had not been laid down, and it was therefore natural to require establishment. However, after the adoption of the Second Banking Coordination Directive and the Investment Services Directive, the logical consequences should be that the establishment requirements for EEC-coordinated depositaries should be deleted.17 In terms of the 1985 UCITS Directive, 18 credit institutions and investment firms which provided depositary services were specifically not allowed to take advantage of the freedoms to provide services and establishment stipulated in the EC Treaty, the Second Banking Directive, and the Investment Services Directive. The UCITS Directive was thus creating a limitation to mutual recognition in this field. Those Member States where the depositary industry was not developed were as a result put at a disadvantage. Given the lack of competition from external depositaries this would give rise to inefficiencies within the local depositary business which would generate extra costs for the UCITS established in these Member States. Such costs would in the end be borne by the investor. One may argue that the creation of a depositary passport was and still is necessary in order to generate competition, which would also guarantee an adequate level of efficiency within the depositary industry. The passport would broaden the choice of depositaries available to AIFs and UCITS, which would be able to pick the best offer, suited to their needs, and would benefit from a higher degree of competition which generally results in a reduction of fees to the UCITS and overall costs to the investor.

Proposal for a Council Directive (EC) COM (1993) 37 amending directive 85/611/EEC on the coordination of laws, regulation and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) [1993] <http://eur-lex.europa.eu/procedure/EN/11605> accessed 19 February 2015 18 Council Directive (EC) 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) [1985]

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The need for a depositary passport to generate and benefit from competition is even more relevant today following the coming into force of the AIFMD.19 The AIFMD requirements on depositaries, which are also in the process of being applied to UCITS,20 while still requiring the depositary to be established in the same Member State of the fund, introduce more robust investor protection regulation on the functions, duties and liability of such entities.21 The new rules on liability require restitution in instances where a financial instrument is lost unless this is caused by force majeure.22 The liability also extends to losses at the level of the subcustodian, which means that even failures of unaffiliated depositaries will be considered as internal to the depositary. 23 The implementation of the proposed strict liability requirements, together with the significant onus put on depositaries with regard to their duties, will most certainly result in considerable costs for the depositary industry. 24 These costs will lead to consolidation within the industry. In order to remain a viable business activity and to benefit from economies of scale, it is expected that small-medium sized depositaries will have to come together or cease to provide depositary services altogether. As a consequence of possible consolidation, one may reasonably predict that only a few depositaries will remain active in Europe, these being the global custodian banks, which, however, are not present in all Member States. This outcome could lead to monopolistic behaviour and consequently an increase in the direct expense of engaging a depositary. Consolidation may result in an unfair playing field for those AIFs and UCITS established in Member States with

Directive 2011/61/EU on Alternative Investment Fund Managers Directive 2014/91/EU on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (n 5) 21 European Commission (n 7) 22 C Buttigieg, ‘An Examination of Policy Trends in EU Financial Regulation applicable to Investment Funds’ [2013] The Accountant 14, 20 23 ibid 24 Ernst & Young, ‘AIFMD: get ready for European depositary reform’ (2012) <http://www.ey.com/Publication/vwLUAssets/AIFMD__prepare_for_European_depositary_reform/$FILE/AIFMD_20March2012.pdf> accessed 19 February 2015 20

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an undeveloped depositary industry. 25 Therefore, the creation of a depositary passport remains necessary today to address the competition issues that result from existing regulation. At the time of the 1993 UCITS Proposal, the authorisation procedure for credit institutions and investment firms together with the harmonisation of the on-going regulatory requirements, which had to be satisfied by these entities respectively in terms of the Second Banking Directive and Investment Services Directive, had created a number of safeguards to guarantee and to ensure an adequate level of protection for investors. Thus, there seemed to be no economic, regulatory, or supervisory rationale to impede the application of the mutual recognition principle in the field of deposits and to operate an EEA passport for depositaries. Notwithstanding the benefits which would have been derived from the depositary passport, the UCITS II Proposal never made it to the end of the legislative process. One of the main bones of contention was the proposal relating to depositaries, 26 with regard to which, there was significant disagreement even at the level of the European Parliament. In this regard, it is worthwhile examining the issues raised by the Rapporteur of the European Committee on Legal and Citizens’ Rights of the European Parliament on the UCITS II Proposal. MEP Perreau De Pinninck suggested two fundamental reasons why depositaries should not be granted a passport in terms of the Directive.27 He argued that the Commission’s proposal to grant credit institutions and investment firms the possibility to passport depositary services on the basis that they were already authorised to provide safekeeping of assets and administrative services in terms of the Second Banking Directive and the Investment Services Directive, as confusing the function of mere safekeeping of assets with the complex role that a depositary must fulfil in relation to collective investment schemes. MEP De Pinninck specifically remarked: 25

Buttigieg (n 22) Clifford Chance, ‘Single Market Update Services’ [1996] Journal of International Banking and Financial Law 457 27 European Parliament, ‘Report of the Committee on Legal Affairs and Citizen’s Rights on the 1993 UCITS Proposal’ [1993] A5-0268/1993 <http://goo.gl/rRSdJO> accessed 23 February 2015 26

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The depositary of a UCITS does not restrict itself to correct safekeeping of deposited assets (collection of dividends or interest, presenting securities for redemption, acting in cases of capital increases or new issues, and so on); it also does the work of high added value, such as supervising the management company and its investment policies, calculating the cash value of the fund, etc … Thus, the functions of a depositary of a UCITS are not those described in the directives and it is extremely simplistic to describe these tasks as being no more than safekeeping and administration of securities.28 Moreover, MEP De Pinninck felt that allowing a depositary passport would create a number of legal issues, such as which legal system should apply in case of default where the depositary may be found negligent and therefore liable to the Scheme, as well as technical complications, in the form of a lesser level of coordination and cooperation between the management company and the depositary, which would in the end result in lesser protection afforded to the investor. On the basis of these two fundamental points, he recommended that the depositary of a UCITS should not be given an internal market passport and should continue to be established in the same Member State as the UCITS. The position taken by MEP De Pinninck suggests a possible concern shared by policy-makers within the European Parliament, that mutual recognition with regard to depositaries would not be possible. There existed a lack of sufficient harmonisation with regard to the requirements which dictate the duties that should be carried out by a depositary for this service provider to properly fulfil its monitoring and safekeeping role in the best interest of the UCITS and the investors. In addition, the EU proposal had not provided for the harmonisation of the criteria which an entity must satisfy before it may be eligible and permitted to act as a depositary of a UCITS. Neither did the proposal provide for a robust harmonised and prudential conduct of business regulatory framework focusing on depository duties, which in the field of financial regulation is considered as yet another fundamental variable for the proper functioning of mutual recognition between financial supervisors 28

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and, consequently, the proper application of an internal market passport. Moreover, basing oneself on the remarks by MEP De Pinninck regarding possible legal issues that could arise as a consequence of the liability of depositaries to the Scheme where the depositary is found to have acted negligently, it is logical to conclude that mutual recognition in this field and the application of an internal market passport would have also required a certain degree of harmonisation with regard to civil liability. Specifically in establishing whether a depositary should be subject to an obligation of means or an obligation of result with regards to the performance of its duties, where significant differences existed between Member States. These were considerably ambitious steps for policy-makers at this early stage of the integration of EU financial services. In the end, policy-makers considered that the UCITS II Proposal did not contain enough harmonisation of substantive requirements of the investor protection type to allow mutual recognition with regard to depositary business to operate properly. The AIFMD proposal was an opportunity to revive the debate on the depositary passport. Malta made the point that a depositary passport was necessary to complete the internal market for the funds industry and that the mechanisms for such a passport to operate had already been established, particularly given the extent of existing harmonisation of the requirements applicable to credit institutions and investment firms in the EU. In Malta’s view the extent of harmonisation of the activity of depositaries should have allowed a framework for mutual recognition between Member States to operate effectively in this field. However, the majority of Member States in Council were, at that stage, not yet convinced about the desirability of mutual recognition in the field of depositary services, particularly given the alleged importance of proximity of supervision of the depositary by the financial supervisor of the AIF. Malta further argued that unless a full depositary passport was allowed, Member States should as a minimum be granted the option to permit EEA credit institutions and investment firms to get access to their market and provide depositary services within their territory. This was a pragmatic solution to address the depositary passport challenge during the stage of the AIFMD legislative process.

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Ultimately, the requests made by Malta and other Member States having a similar view resulted in a compromise whereby a transitional provision for a period of four years was included in the AIFMD.29 This transitional provision gives Member States the discretion to allow AIFs established on their territory to appoint depositaries in other Member States. This discretion is however restricted to the appointment of depositaries that are authorised as credit institutions in their home Member State. Furthermore, the text of the Directive was amended to include a recital which invites the European Commission to put forward an appropriate horizontal legislative proposal which inter alia governs the right of a depositary in one Member State to provide services in other Member States.30 The overall intention of these amendments being that of giving Member States, where the depositary industry is not yet fully developed, sufficient time to allow their depositary industry to grow, while at the same time giving the European Commission the time to put the depositary passport back on its legislative agenda. This has already materialised in the case of UCITS funds with the publication of the 2012 UCITS VI Consultation, which included a specific section on depositary passport. A proposal for a mechanism, which should allow the depositary passport to work, is made in section 2.2.2 of this paper. 1.2 AIFMD Level II: Requirements on Letter Box Entities At level II of the AIFMD legislative process, the major issue of contention emerged from the requirements that regulate the delegation by an AIFM to a sub-manager, specifically the requirements on letter-box entities. The version of the AIFMD Delegated Regulation issued in March 2012 inter alia stipulated a quantitative test whereby, in the event that the totality of the individual tasks delegated by the AIFM substantially exceeded the tasks carried out by it, the AIFM was to be considered as a letterbox entity. This meant that the fund manager would no longer be considered an AIFM for the purposes of the Directive. This provision raised significant concerns within the hedge fund industry, 29 30

Directive 2011/61/EU on Alternative Investment Fund Managers, Article 61 (5) Directive 2011/61/EU on Alternative Investment Fund Managers, Recital 37 258

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particularly given the accepted market practice for fund managers to make the high-level policy decisions directly while delegating the day-to-day stock picking and risk management of the portfolio to another firm in the EU or a third country. This accepted market practice allowed the realisation of a certain degree of economies of scale. The proposed rule on letterbox entity meant that the AIFM would have to directly undertake much of the previously delegated activity. This would have made the prevailing delegation model unworkable for an AIFM and would have resulted in a significant amount of restructuring within the industry, with the cost being passed on to investors. This was Malta’s most significant concern at this stage of the AIFMD legislative process. Malta, together with other Member States, argued in favour of a more workable solution with regard to the letterbox entity requirements. Ultimately, the Commission moved away from the quantitative determination of a letterbox entity, by replacing the proposed rule with an approach which requires the assessment of compliance of the delegation structure with an established set of qualitative criteria. 31 However, this meant that the mechanism for assessing the delegation arrangements would result in different interpretations of the relevant requirements at national level and, as a consequence, in a fragmented approach to the supervision of AIFM delegation structures and in opportunities for supervisory arbitrage. In an attempt to resolve the risks resulting from an uneven approach to the interpretation of the requirements on letterbox entities, the Commission Delegated Regulation stipulates that ESMA may issue guidelines to ensure a consistent assessment of delegation structures across the Union. Unfortunately, while ESMA has carried out a sterling job on AIFMD at Level III, above all in negotiating memoranda of understanding with over 38 non-EU jurisdictions for the purpose of the Directive and in establishing a consistent approach to the application of the reporting by AIFM and the implementation of the requirements on remuneration, it has yet 31

Commission Delegated Regulation (EC) No 231/2013 supplementing Directive 2011/61/EU of the European Parliament and of the Council with regard to exemptions, general operating conditions, depositaries, leverage, transparency and supervision [2012] OJ L83/1

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to initiate work in the field of delegation by AIFM. This is a key area for convergence if the intended harmonisation objectives of the Directive are to be achieved in practice. Until this work stream is triggered off and eventually completed, Member States will continue to experience difficulties with the implementation of the letterbox entity requirements, which result in different interpretations32 and, as a consequence, applied differently. This position lends itself to a race to the bottom and jurisdiction shopping, which in the long-term could endanger the stability and integrity of the internal market. This point is examined further in part 3.1 of section 3 of the paper.

The Transposition Process

This section of the paper examines the transposition process of the AIFMD, the legislative changes made for this purpose, and the choices made by policy makers during this process, all of which are particular to Malta. In the context of the paper, this section is important as it examines how the implementation of the AIFMD changed the dynamics of Maltese regulation applicable to AIFM and AIFs and makes suggestions on how the directive can be improved to achieve a more effective internal market in the field of investment funds. This section, which is divided into two parts, demonstrates how the AIFMD implementation process resulted in the adoption of an MFSA Rulebook which is more complete and specific in terms of regulation that applies to particular areas of financial business and that addresses the risks that arise from the activities undertaken by licensed entities. Part 2.1 examines the changes to Malta’s legislative framework.33 Part 2.2 analyses the areas of regulation AIMA, ‘AIFMD implementation incomplete, uncertainty remains’ (Aima.org 2014) <http://www.aima.org/en/media/press-releases.cfm/id/A40CD128-0C364D4B-A516E26A42B7D55D> accessed 19 February 2015 33 For detailed information on the Malta transposition process reference should be made to the relevant section of the MFSA webpage<http://www.mfsa.com.mt/pages/announcements.aspx?id=23>accessed 19 February 2015 32

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which are particular to Malta. In the latter part of this section a proposal is made for a depositary passport based on: (i) mutual recognition of regulation and supervision which is contingent on harmonised regulation and supervisory convergence; and (ii) supervisory processes that are built on the principles of reflexive governance and the implementation of a system of colleges of supervisors established in terms of the ESMA regulation. 2.1 Changes to Malta’s Legislative Framework The transposition of the AIFMD was handled by the MFSA, which is an independent and autonomous public body established by an act of Parliament, the Malta Financial Services Authority Act. 34 The MFSA is Malta’s single financial services regulator and supervisor with inter alia the responsibility of achieving investor protection and the integrity of the financial system and advising government on matters relating to policy in the field of financial services. Malta is a jurisdiction of choice for the establishment of international financial services and has a growing funds sector, which mainly targets professional investors. As the AIFMD has an impact on the majority of fund management companies and collective investment schemes established in Malta, the implementation of the Directive became a top priority on the Authority’s regulatory agenda. To address the implementation challenge, the Authority set-up an Implementation Working Committee which was inter alia responsible for suggesting amendments to the local legislative framework for the purpose of the AIFMD. The Committee had three main objectives: (i) carrying out the correct transposition and implementation of the AIFMD and subsidiary legislation; (ii) ensuring a smooth transition from the existing regime for the regulation of Non-UCITS fund managers, which was largely based on MiFID (herein referred as the ‘Markets in Financial Instruments Directive’), to the AIFMD regime; and (iii) ensuring that certain features of the regime, such as the framework for the regulation of professional investor funds, would be retained. In Malta the transposition of the AIFMD required amendments to the Investment Services Act, 1994 (herein referred 34

Malta Financial Services Authority Act, Chapter 330 of the Laws of Malta

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as the ‘Act’).35 By way of background, the Act regulates the activity of investment firms, fund managers, collective investment schemes, custodians and fund administrators. The amendments to the Act, which implement the AIFMD, provided for the licensing of an AIFM and alternative investment funds (AIF). The first schedule to the Act was also amended to include ‘collective portfolio management of assets’ as an integral part of the service of management of investments. The Act is supplemented by the following legal notices adopted by Minister of Finance in terms of the Act: - Investment Services Act (Alternative Investment Fund Manager) Regulations,36 which enhance the MFSA’s powers qua competent authority for the purpose of the AIFMD; - Investment Services Act (Alternative Investment Fund Manager) (Passport) Regulations, 37 which apply to AIFM exercising passporting rights in terms of the AIFMD; - Investment Services Act (Marketing of Alternative Investment Funds) Regulations,38 which regulate the cross-border marketing of AIFs; and - Investment Services Act (Alternative Investment Fund Manager Third Country) Regulations (Third Country Regulations), 39 which implement the third country provisions, including the framework applicable to the national private placement regime and the choice of the Member State of reference by third country AIFMs. In addition to the Act and the legal notices, changes were also carried out to the MFSA’s Investment Services Rules.40 In terms of the Act, the MFSA has the power to issue Investment Services Rules stipulating requirements and conditions in relation to activities of licensed entities, the conduct of their business, their 35

Investment Services Act, Chapter 370 of the Law of Malta Legal Notice 115 of 2013 Legal Notice 114 of 2013 38 Legal Notice 113 of 2013 39 Legal Notice 116 of 2013 40 MFSA Investment Services Rules <http://www.mfsa.com.mt/pages/viewcontent.aspx?id=262> accessed 19 February 2015 36 37

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relations with customers, the public and other parties, their responsibilities to the MFSA, and any other matters as the Authority may consider appropriate. The MFSA has issued (and/or amended, as the case may be) a number of Investment Services Rulebooks that generally aim at supplementing the high-level regulatory principles stipulated in the Act and which transpose into Maltese law various pieces of EU financial regulation such as the AIFMD, MiFID, 41 the UCITS Directive42 and the Capital Requirements Directive. 43 The Investment Services Rules for Investment Services Providers (ISP Rulebook) which regulate the activity of investor firms, fund managers, and custodians (depositaries), was amended to implement the governance, compliance, capital, risk management, conduct of business, and transparency requirements applicable to AIFM. In addition, as part of the AIFMD project the Authority decided to restructure the ISP Rulebook, the on-going obligations of which are applicable to investment services providers in general, into four parts which apply depending on the specific type of activity undertaken by the licensed entity, these being: (i) MiFID investment firms; (ii) UCITS managers; (iii) AIFM; and (iv) depositaries. 2.2 Fields of regulation particular to Malta This section examines those areas of regulation which are particular to Malta and strengthen Malta’s regulatory framework for investor protection and the integrity of the financial system. Specifically the: (i) licensing framework for de minimis fund managers; (ii) implementation of the requirements on remuneration; (iii) transitional depositary passport; and (iv) implementation of rulebooks applicable to AIF. 41

Directive of the European Parliament and of the Council (EC) 2004/39/EC Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC [2004] OJ L145/1 42 Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities 43 Directive of the European Parliament and of the Council (EC) 2013/36/EU on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC [2013] OJ L176/338

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2.2.1

De minimis Fund Managers

The part of the Investment Services Rulebook that applies to AIFM contains specific regulations applicable to de minimis AIFMs.44 Malta decided to regulate de minimis AIFMs with a stricter regime than what is prescribed in the AIFMD for this type of manager. Policy makers in Malta were of the view that a licensing regime is preferable than mere registration as it is in the best interest of investor protection and the integrity of the financial system that all fund managers are subject to a robust but proportionate regulatory framework.45 Mere registration without regulation and supervision does not give comfort to investors that they are being treated fairly and that their investments are being made in a way which is not in breach of general good principles for market integrity. The framework applicable to de minimis fund managers in Malta prescribes governance, transparency, and conduct of business requirements but does not extend to the specific requirements set in the AIFMD that aim at addressing: (i) systemic stability concerns, such as the requirements applicable to AIFMs that manage leveraged funds; and (ii) the regulatory concerns that result from corporate finance through specific obligations applicable to AIFMs that manage funds which acquire control over non-listed companies. Moreover, it was deemed important that fund managers irrespective of the size and complexity of their operations should be subject to Malta’s money laundering and financing of terrorism deterrence framework.46 This is important to ensure that no operator remains unchecked from a money laundering perspective, which is critical for safeguarding the reputation of Malta’s financial centre. Therefore, de minimis AIFMs are subject to regulation and supervision in Malta, the only distinction between AIFMs and de minimis AIFMs being the level of regulation and the intensity of 44

MFSA Investment Services Rules for Investment Services Providers, Part B III< http://mfsa.com.mt/pages/viewcontent.aspx?id=509> accessed 19 February 2015 45 MFSA Consultation on the Rulebook applicable to de minimis licence holders (2013) <http://mfsa.com.mt/pages/announcements.aspx?id=23> accessed 19 February 2015 46 Prevention of Money Laundering Act, Chapter 373 of the Laws of Malta 264

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supervision by the MFSA. It is reasonable to suggest that Malta’s approach in this regard addresses potential issues of investor protection and confidence, while at the same time ensures that AIFMs of a small size are not forced into regulatory straight-jackets that are designed for large operators and are not, as a consequence, relevant given the size, nature and complexity of their business. 2.2.2

Transitional depositary passport

Malta exercised the optional transitional provision that allows an AIF to engage a depositary in another Member State until 22 July 2017.47 The implementation of the AIFMD was an important step for the strengthening of investor confidence in the alternative investment fund industry. 48 In this regard, the requirement to appoint a depositary to safe keep the assets of the fund and to monitor the AIFM is an important investor protection requirement. Nonetheless, the requirement that the depositary should be established in the same Member State as the fund 49 goes beyond what is necessary to achieve the investor protection objective of regulation. The restriction on the place of establishment of the depositary limits the jurisdictional options for promoters of investor funds, restricts the choice of depositaries, and lessens the competition within the depositary industry. The restriction goes against the internal market objectives set in the Treaty of the European Union (herein referred as the ‘TFEU’) and the Directive. In the EU, harmonisation is not implemented for harmonisation’s sake but to allow the internal market to operate on the basis of a single rulebook (maximum harmonisation) or on mutual recognition (minimum or quasi-maximum harmonisation). However, while as a result of the AIFMD and the UCITS V Directive50 there is now significant harmonisation of the conduct of business of depositary services, a depositary passport has not been implemented. It is submitted that this illogical position is the 47

Directive 2011/61/EU on Alternative Investment Fund Managers, Article 61(5) N Fitzpatrick ‘The Man Behind AIFMD: Executive Interview with Ugo Bassi the European Commission’s Head of Asset Management’ [2011] Funds Europe 18-19 49 Directive 2011/61/EU on Alternative Investment Fund Managers, Article 21(5) 50 Directive 2014/91/EU on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities 48

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unfortunate outcome of European processes that are largely driven by national protectionist agenda, which are prevailing over and creating barriers to the operation of the European Internal Market project. It is submitted that the main issue which is preventing the depositary passport to be implemented is more likely to be the desire of certain Member States to retain control over the depositary business which services the funds that are established in their jurisdiction, and possible mutual distrust between Member States with regard to the supervisory capabilities at national level for the integrity of depositary business. To address this concern and implement the depositary passport one may venture at proposing a solution based on mutual recognition that is contingent on: (i) harmonisation of regulation and supervisory processes that are built on the principles of reflexive governance that leads to convergence of supervisory practices; and (ii) the implementation of a system of colleges for cooperation established in terms of the ESMA regulation. From a supervision perspective, a system for reflexive governance of financial supervision based on tools for supervisory cooperation, resulting in convergence, would seem to be the optimum solution to allow mutual recognition to work in the field of depositary services. Reflexive governance is a process that promotes learning from diversity. It is characterised by flexibility, participation, power sharing, de-centralisation, deliberation, experimentation, identification, and benchmarking of best practices, knowledge-creation, and revisability. 51 The over-all focus of the process is a continuous search for better approaches to address the governance problem. The constructive and valuable feature of a process of reflexivity in governance, is that the outcome of the learning-process bends back on the participants that have instigated and participated in the said process, and where exchanges between different participants in the process can result in innovation, as each participant will have to reconsider its own policies with a view of improving them, in the light of the successes and failures of others. 52 51 O De Schutter & J Lenoble (eds), Reflexive Governance: Redefining the Public Interest in a Pluralistic World (Hart, Oxford 2010) and S Deakin, Reflexive Governance and European Company Law CLPE Research Paper No. 20/2007 [2007] 52 ibid

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For reflexive governance to work, participants must be equipped to become active in the decision-making process and must be supported through inter alia institutional arrangements for cooperation and debate. The ESMA standing committee for investment management53 could be the ideal forum to kick start this process. Nonetheless, on the assumption that the global custodians active in Europe54 are the players that would exercise a passport to provide depositary services across the EU and which would compete on a cross-border level, one could argue that centralised supervision at European level would, at first instance, appear to be a more suitable basis for the depositary passport, as shared supervision may be highly inefficient and may not be adequate to ensure stability. However, given the investor protection concerns that could arise from the losses suffered in case of failure of a depositary, national financial supervisors would want to retain supervisory control over depositary business. Retaining responsibility for supervision and easy access to the depository is in the end the main reason why certain Member States have not yet come to terms with the idea of having a depositary passport. Therefore, it is most likely that the supervisors of AIFs, UCITS, and the management companies serviced by the depositary, would want to participate in the supervision of the depositary together with the depositary’s home financial supervisor. To resolve the possible supervisory inefficiencies that could result from fragmented supervision involving several supervisors, while addressing the existing desire for national supervision, it is submitted that a measure that should be considered is the setting up of colleges of supervisors coordinated by ESMA. 55 This solution

The Investment Management Standing Committee undertakes ESMA’s work on issues relating to collective investment management, covering both harmonised and non-harmonised investment funds. More information on the Standing Committee is available at <http://www.esma.europa.eu/page/investment-management-sc> accessed 19 February 2015 54 Information available from the Global Custodians website <http://www.globalcustodian.com/directories/Global_Custodians/>accessed 19 February 2015 55 Regulation of the European Parliament and of the Council (EC) 1095/2010 establishing a European Supervisory Authority (European Securities and Markets 53

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would leave supervision at the level of the home Member State, while recognising the need for other Member States to take a role in the supervisory process. However, it has been suggested that there might be limitations to this type of mechanism for the coordination of supervision of cross-border financial institutions. 56 Nonharmonised mandates and powers of financial supervisors that form part of the college could result in lack of proper leadership in the college and failures in consolidated supervision which would generally undermine the effectiveness of the college of supervisors.57 On the other hand, a properly coordinated and strongly led college of supervisors would create a forum for discussion, mutual cooperation, and learning which would in turn enhance a process of reflexivity in financial supervision that would contribute to the overall process of convergence. 2.2.3

MFSA Rulebooks applicable to AIFs

Malta has a tradition as a product regulation jurisdiction. The Investment Services Act requires collective investment schemes established in Malta to obtain a licence from the MFSA. The Authority’s regulatory framework distinguishes between retail funds58 and professional funds.59 Both types of funds are subject to specific governance and transparency requirements. In addition, retail funds are also subject to further investor protection type rules which seek to ensure diversification through the application of requirements that regulate the structure and/or composition of the

Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC [2010] OJ L331/84 recital 36 and article 21 56 D Alford, ‘Supervisory Colleges: The Global Financial Crisis and Improving International Supervisory Coordination’ [2010] e.g. AL Emory International Law Review, 24 57 K Alexander, R Dhumale & J Eatwell, Global Governance of Financial Systems The International Regulation of Systemic Risk (1st, Oxford University Press, Oxford 2006) 58 MFSA Investment Services Rules for Retail Collective Investment Schemes<http://www.mfsa.com.mt/pages/viewcontent.aspx?id=265> accessed 19 February 2015 59 MFSA Investment Services Rules for Professional Investor Funds <http://www.mfsa.com.mt/pages/viewcontent.aspx?id=266> accessed 19 February 2015 268

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portfolio of AIFs. The AIFMD regulates the activity of AIFMs and not the AIF. However, Member States may continue to regulate the activity of the AIF at a national level. 60 During the process that led to the implementation of the AIFMD in Malta, the MFSA decided to adopt the Investment Services Rules for Alternative Investment Funds (AIF Rulebook), a rule book for the establishment of funds which are compliant with the AIFMD.61 While the MFSA opted to retain the existing regulatory framework applicable to professional investor funds, it decided to reinforce the framework for the regulation of the funds sector by establishing a rulebook which regulates self-managed funds, which in terms of the AIFMD qualify as the AIFM, and third party managed funds that are targeted for distribution as AIFs across Europe. Apart from stipulating an exhaustive list of service providers which the AIF is required to appoint, the AIF rulebook also sets requirements on the governance and transparency of the fund. The Authority also published a rulebook which is applicable to loan funds, being AIFs that specialise in the granting of loans. 62 These rules are meant to regulate the direct origination of loans by the fund or the acquisition by the fund of a portfolio of loans or a direct interest in loans which gives rise to a direct legal relationship between the Scheme as the lender and the borrower. This rulebook attempts to address the funding gap resulting from the deleveraging of banks by creating an alternative funding channel for the economy, in particular, the funding of long-term projects such as the financing of infrastructure or the purchasing of aircraft or ships. In preparing rules applicable to loan funds, the MFSA attempted to address possible shadow banking concerns by adapting requirements, which traditionally apply to credit institutions, such as 60

Directive 2011/61/EU on Alternative Investment Fund Managers and amending, Recital 10 61 MFSA Investment Services Rules for Alternative Investment Funds <http://www.mfsa.com.mt/pages/viewcontent.aspx?id=512>accessed 19 February 2015 62 MFSA Standard Licence Conditions applicable to Collective Investments Schemes authorised to invest through loans <http://www.mfsa.com.mt/pages/viewcontent.aspx?id=512> accessed 19 February 2015

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the requirement to establish and implement a credit risk policy that guides the granting of credit by the fund. In this connection, the MFSA took into account the various studies and policy recommendations on the regulation of shadow banking published by the Financial Stability Board.63 To guarantee a high degree of investor protection, given the risky nature of these funds, the Authority has restricted the availability of the units to professional investors as defined by MiFID and has applied a minimum entry level of €100,000. Without specific product regulation which tackles the risks that emerge from the granting of loans it would be difficult to ensure that these types of funds operate in a sound manner and do not form a threat to the integrity of the financial system. The implementation of the rulebooks applicable to AIFs demonstrates the manner in which the AFIMD implementation process was used as an opportunity to further develop the MFSA’s regulatory framework applicable to the funds’ industry. Indeed, the outcome of the implementation process was the adoption of an MFSA rulebook, which is more complete and specific in terms of regulation, that applies to particular areas of financial business and which address the risks that arise from the specific area of activity undertaken by licensed entities. The changes to the rulebook, implemented as part of the AIFMD implementation process, have strengthened Malta’s regulatory framework for investor protection and the integrity of the financial system. 2.2.4

Implementation of the Requirements on Remuneration

The MFSA has implemented the ESMA Guidelines on sound remuneration policies under the AIFMD 64 with the exception of paragraph 18 of the guidelines. This paragraph stipulates that the delegate of an AIFM, who has been delegated investment management activities, must be subject to regulatory remuneration Financial Stability Board, ‘Strengthening Oversight and Regulation of Shadow Banking An Overview of Policy Recommendations’ (2013) <http://www.financialstabilityboard.org/wpcontent/uploads/r_130829a.pdf?page_moved=1> accessed 19 February 2015 64 ESMA, Guidelines on sound remuneration policies under AIFMD, ESMA/2013/232 <http://www.esma.europa.eu/solrsearch/ESMA%24bs%3B2013%24bs%3B232> accessed 19 February 2015 63

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requirements which are equally as effective as those applicable under the Guidelines, and that appropriate contractual arrangements must be in place to ensure that there is no circumvention of the remuneration rules. ESMA has therefore extended the remuneration provisions in the Directive with the intent that those entities to which AIFMs delegate investment management activities are also subject to the guidelines. The recitals of the UCITS V Directive are demanding ESMA to take a similar position with regard to delegation structures in the context of UCITS.65 The adoption and implementation of requirements on remuneration is fundamental in order to address the possible detrimental effect of poorly designed remuneration arrangements on the sound management of risks. Perverse remuneration incentives are one factor among many that contributed to the financial crisis. 66 As a result the regulation of remuneration has been on international policy makers’ agenda, amongst others the Financial Stability Board, which has been monitoring the implementation of its principles for sound compensation practices. 67 Therefore, the imposition of remuneration requirements is a mechanism which seeks to control the risk-taking behaviour by AIFM and aligning the interests of identified staff of the AIFM with those of investors in the AIF managed by the AIFM.68 However, as a result of the uneven approach to the regulation of remuneration between Europe and the rest of the world,69 the ESMA guideline that is applicable in the event of delegation may cause serious difficulties in the setting up of delegation structures where the delegate is established outside the EU. Therefore, the MFSA has opted not to implement paragraph 18 of the ESMA Guidelines. In this regard, to address the concerns 65

Directive 2014/91/EU on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities 66 Financial Stability Forum, ‘FSF Principles for Sound Compensation Practices ‘ (2009) <http://www.financialstabilityboard.org/wpcontent/uploads/r_0904b.pdf?page_moved=1> accessed 19 February 2015 67 Financial Stability Board, ‘Compensation Practices’ (2014) <http://www.financialstabilityboard.org/what-we-do/policy-development/buildingresilience-of-financial-institutions/compensation/> accessed 19 February 2015 68 Directive 2011/61/EU on Alternative Investment Fund Managers and amending, Recital 24 69 Financial Stability Board (n 67) 6-11 and 13

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that delegation structures may be applied in order to circumvent the European requirements on remuneration, while at the same time allowing delegation structures between EU and non-EU fund managers to continue existing without restrictions, the MFSA is applying a supervisory procedure for monitoring the effective implementation of remuneration requirements by local fund managers. In circumstances where the delegate is not subject to remuneration requirements which are equivalent to those indicated in the AIFMD, the MFSA would expect the relevant AIFM to coordinate the implementation of adequate and robust risk management processes and procedures to be followed by the delegate and would also require the relevant AIFM to carry out more rigorous control and oversight of the delegate’s activity. It would consider these issues in the context of the Directive’s overall objectives of avoiding excessive risk taking and alignment of interests, and the scope for the delegate to materially affect the AIF’s risk profile. It is reasonable to suggest that this supervisory procedure should achieve the same outcome as paragraph 18 of the ESMA Guidelines, however, without disrupting the existing delegation structures. This section examines the regulatory framework which implements the AIFMD in Malta and demonstrates how the transposition of the Directive has resulted in a more robust regulatory framework for the alternative investment fund industry. In the final analysis, it is reasonable to argue that financial regulation on its own is, however, not enough to ensure investor protection and guarantee the integrity of the financial system. Supervision and enforcement action are equally important. Experience in financial supervision suggests that without supervision and enforcement the industry may be inclined to not comply with regulation, which in turn may result in the failures of the past being repeated in the future. Ultimately, the financial crisis which created the impetus for the adoption of the AIFMD did not only result from inter alia a failure to regulate the shadow financial system but also from a failure to carry out effective supervision and to take enforcement action where necessary. Effective enforcement sets an example whereby other operators become more attentive not to commit regulatory failures. Indeed, ‘punishment does not take place primarily and per se for the 272

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correction and good of the person punished, but for the public good in order that others may become terrified and weaned away from the evils they would commit’.70 It is therefore important for enforcement action to be directed not only at the licensed entity but to extend to the individuals responsible for the failures. The US Federal Deposit Insurance Corporation’s action against directors of banks that failed during the financial crises is an interesting example of action that may, in the end, have an enduring effect on the behaviour of others that remain in the industry71 and is the sort of action which other financial supervisors, including the MFSA, should take where serious failures are identified. Consequently, it is submitted that in the absence of robust supervision and effective enforcement action, the adoption of financial regulations to safeguard the investors and the financial system would be futile as these objectives would not be realised. The next section of this paper deals specifically with the practical implementation of the AIFMD in Malta by the MFSA through its authorisation, supervisory, and enforcement processes, which aim at ensuring that the objectives of regulation are fulfilled in practice.

Practical Implementation

The MFSA’s supervision of fund managers and collective investment schemes focuses primarily on verifying that the licensed entity has robust governance structures and capital for the proper conduct of business of licensable activity. Issues relating to governance are raised both at application stage and on an on-going basis. This section, which is divided into two parts, examines the MFSA’s processes for the practical implementation of the AIFMD. Part 3.1 examines the authorisation process and the practical difficulties resulting from the application of the requirements on 70

Directorium Inquisitorum [1578] Book 3 137 column 1 Douglas, ‘FDIC waging legal battle against hundreds of former bank leaders’ (Washington Post, 2013) <http://www.washingtonpost.com/business/economy/fdicwaging-legal-battle-against-hundreds-of-former-bank-leaders/2013/08/23/92d9a57cfea7-11e2-bd97-676ec24f1f3f_story.html> accessed 19 February 2015 71

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letterbox entities. Part 3.2 analyses the on-going supervision of AIFM and how these ensure the overall integrity of the fund management industry established in Malta. The point is made that practical implementation of the AIFMD has proven to be more challenging than originally anticipated. The processing of applications for authorisation as an AIFM in an environment where there is a lack of European uniformity in the interpretation of certain aspects of the regulation, such as the requirements on delegation, is one of the most significant challenges that the MFSA has faced to date in connection with the AIFMD implementation. The non-existent convergence of supervisory practices in the field of investment management has resulted in different mechanisms for supervision being applied in Member States. It is submitted that convergence of supervisory practices is fundamental if coherence in implementation is to be achieved and regulatory and supervisory arbitrage avoided. Convergence of supervisory practices is an essential ingredient for the operation of mutual recognition between Member States and is important if the internal market and regulatory objectives of the directive are to be achieved. 3.1 Authorisation At application stage focus is made to ensure that applicants have proper governance structures in place and that officials who will be managing the entity or providing licensable activity are ‘fit and proper’ and therefore technically competent and practical.72 The raison d’être for requiring the affairs of the licensed entity to be managed by persons who are fit and proper is that of ensuring that the relevant persons are technically competent, honest, and solvent and therefore ab initio and on an on-going basis the entity’s business is conducted professionally and in the best interest of investors and the market. It also seeks to ensure that a proper compliance culture is maintained and, where delegation structures are being proposed, that sufficient substance is retained in Malta. It 72

MFSA, A Guide to Establishing an Alternative Investment Fund Manager in Malta < <http://www.mfsa.com.mt/pages/viewcontent.aspx?id=117> accessed 19 February 2015 274

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is reasonable to argue that all these factors put together are essential to achieve adequate governance of licensed entities. The Authority’s Authorisation Unit is responsible for the processing of all applications for a financial services licence, including applicants in terms of the AIFMD. One may argue that this governance mechanism for financial supervision ensures a consistent and proportionate approach to the processing of applications in all financial sectors. After reviewing the application documents, the Authorisation Unit would generally communicate with the applicant with the aim of obtaining further information for a more thorough understanding of the business proposal, particularly the operational set-up which must satisfy the strict conditions set in the Directive. Once the applicant has properly addressed all issues and queries, the application is submitted for the consideration of the Authority’s Supervisory Council, which is responsible for all decisions on regulatory and supervisory matters.73 The Authority’s Supervisory Council decision to grant a financial services licence, is the instant which gives birth to a financial entity in Malta. Thereafter the financial entity is allowed to operate in the local market and to passport its activities to other European jurisdictions. The submission of an application is no guarantee that a licence will be granted by the Authority. Indeed, there have been a number of instances where, due to unsatisfactory outcomes resulting from the Authority’s due diligence processes, or inadequate business models, the Authority’s Supervisory Council rejected an application for a licence. Where an application is rejected, the applicant has a right of appeal from the Authority’s decision at the level of the Financial Services Tribunal.74 This is a basic accountability mechanism which seeks to ensure that the financial supervisors do not abuse the powers granted in terms of law. Ensuring proper substance in Malta has been and still is one of the main challenges which the Authority is facing at application stage. The lack of a European convergent approach in this field has caused uncertainty over how the principles set in regulation should 73

Malta Financial Services Authority Act, article 10 Malta Financial Services Authority Act, article 21 and Investment Services Act, article 19 74

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be interpreted and applied to AIFM delegation structures. Regulatory certainty is important for business development and to ensure that the investor protection and systemic stability objectives of the AIFMD are attained. The Authority has sought to resolve the uncertainty through an informal exchange of views and debate with the industry on the different delegation structures that could be applied in order to satisfy the requirements of the Directive. The Authority’s exchange of views with the industry has allowed a better understanding of the AIFMD, and has had a positive impact on the quality of applications submitted to the Authority and the overall ongoing compliance with the requirements of the Directive, thereby making practical implementation more manageable. The debate also resulted in the establishment of an MFSA policy on substance and is a good example of the Authority’s pragmatic approach to resolving the challenges resulting from the implementation of the Directive. 3.2 On-going supervision In the field of investment management, national financial supervisors still apply purely national supervisory philosophies and methods for monitoring compliance with the requirements applicable to UCITS and their service providers, including management companies. In broad terms a certain degree of linearity exists in the methods applied for supervision. Indeed, generally speaking, financial supervisors carry out their supervisory duties through a mixture of authorisation procedures and off-site and onsite compliance monitoring of the activity of financial institutions. However, empirical research carried out in this field has shown that the scope and frequency of specific methods of supervision and the extent of checks carried out vary significantly between different financial supervisors.75 ESMA has admitted that supervisory convergence was proving difficult to achieve and that the mechanisms to reach this

C Buttigieg, ‘The Development of the EU Regulatory and Supervisory Framework applicable to UCITS: A Critical Examination of the Conditions and Limitations of Mutual Recognition’ (Doctoral Thesis, University of Sussex 2014)< http://sro.sussex.ac.uk/48285/> accessed 13 September 2014 75

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objective should therefore be revaluated. 76 Until the mechanisms for supervisory convergence are re-examined and established, supervision will remain purely a national competence. In this connection, if the current debate on the future of capital markets in Europe is to result in a real CMU, where European markets become more integrated and a real alternative to bank financing, 77 then the supervisory question in Europe must be re-assessed: Can the CMU become a reality until supervision in Europe remains fragmented and undertaken purely along national lines? During 2014, ESMA triggered a process for the re-examination of the mechanisms for convergence and is currently testing two new mechanisms: (i) onsite inspections for convergence at the offices of national competent authorities;78 and (ii) the carrying out of thematic studies for convergence.79 These mechanisms for convergence have the purpose of assessing supervisory practices of national competent authorities by identifying poor, good, or best practices in very specific fields of supervision, such as the authorisation process or the procedures for the conduct of on-going supervision. These mechanisms, which have been developed as a result of the specific need to achieve a higher degree of convergence of supervisory practices, appear prima facie to be a step in the right direction, although it is yet too early to determine whether they will be effective in achieving their objective. In Malta, the supervision of licensed entities is carried out by the MFSA through off-site compliance monitoring of regulatory documentation and onsite inspections at the offices of licensed Maijoor, ‘ESAs – Achievement and Challenges: Public Hearing on Financial Supervision in the EU’ (ESMA, 2013) <http://www.esma.europa.eu/system/files/2013-603_esas-achievement_and_challenges_speech_by_steven_maijoor_chair_of_esma.pdf> accessed 19 February 2015 77 European Commission (n 7) 78 Maijoor, ‘Asset management – The regulatory challenges ahead EFAMA Investment Management Forum 2014’ (ESMA, 2014) <http://www.esma.europa.eu/system/files/20141333_steven_maijoor_keynote_speech_at_efama_5_nov_2014.pdf> accessed 19 February 2015 79 The author is the Director of the Securities and Markets Supervision Unit of the Malta Financial Services Authority and is a member or observer of various ESMA committees. He participated in the discussions on thematic studies for convergence. 76

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entities.80 This is the supervisory approach that is generally adopted by financial supervisors around the world to monitor the operators in their market. Off-site monitoring focuses mainly on ensuring that: (i) licensed entities have sufficient financial resources; (ii) adequate and robust capital is maintained; and (iii) financial and operational risks are properly identifies, quantified and mitigated. The off-site work feeds information to the MFSA’s processes that determine which licensed entities should be subject to an on-site inspection. Of particular importance in this regard are the notifications by auditors to the MFSA about governance, control, and financial weaknesses identified during their audit of licensed entities. 81 The MFSA’s on-site inspections at the offices of licensed entities are generally designed to review the extent to which these entities have sufficient governance, compliance, risk management, and anti-money laundering processes and procedures in place to ensure the overall integrity of the business of the entity and its conduct of business. In this connection, experience suggests that if a licensed entity has robust governance processes and a sound organisational set-up, which gives compliance, risk management, and anti-money laundering the importance it deserves, addressing compliance issues that arise in the entity’s conduct of business effectively, becomes a sine qua non of the company’s overall processes. Therefore, understanding and examining a licensed entity’s governance and organisational set-up, identifying the main weaknesses and making sure that these are rectified, should, ceteris paribus, ensure that the licence entity’s management have proper control and oversight over the entity’s business that the entity’s compliance and risk management culture are sufficiently good to identify risks and malpractices. As part of its supervisory processes, the MFSA also retains a certain degree of reliance on the auditors of licensed entities and the depositary in case of fund structures. Within the framework for 80

MFSA, The Framework for the Regulation of Investment Services Licence Holder, Regulated Markets and Central Securities Depositaries <http://www.mfsa.com.mt/pages/viewcontent.aspx?id=117> accessed 19 February 2015 81 MFSA, Investment Services Rules for Investment Services Providers <http://www.mfsa.com.mt/pages/viewcontent.aspx?id=262#2> accessed 19 February 2015 278

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financial supervision the auditor and the depositary fulfill a quasisupervisory role. A financial supervisor’s resources are generally limited and cannot allow for close supervision of all the variables that make a financial market. This is particularly true where the financial sector of a particular jurisdiction is growing considerably and where different and sometimes complex financial products and structures are being developed and applied by the industry. Experience suggests that in such circumstances even where a financial supervisor attempts to narrow the supervisory gap by recruiting more resources, this may become a problematical task, as potential recruits with industry experience that have an aptitude for compliance are very rare, and building a compliance team to keep up with market developments may take a significant amount of time to achieve, in certain instances years. Therefore, a financial supervisor would generally focus supervisory activity on those elements in the financial system which form the greater threat to the supervisor’s statutory obligations. This approach is generally referred to as the risk based approach to supervision and means that supervisory resources are mainly focused on high risk and impact firms. Risk based supervision is a supervisory process that is today applied in various jurisdictions. This approach however creates a supervisory gap whereby a number of firms, particularly those that are small or medium in size, and the nature and activity of which is not complex, may be subject to limited supervision (if any). To narrow this supervisory gap financial supervisors normally draw from the work of third parties, such as depositaries and auditors that are vested with quasisupervisory duties. The final responsibility for the supervision, however, remains that of the financial supervisor that must still undertake on-going general checks on licensed entities. The depositary monitors the activity of the fund manager to verify that the asset management of the fund is being undertaken in terms of law and the constitutional documents of the fund. This role has been strengthened as a result of AIFMD and UCITS V Directive. The regulation which assigns a quasi-supervisory role to the depositary seeks to ensure that there is constant monitoring of the manager’s activity and that portfolio management is carried out in the best interest of investors. On the other hand, auditors have the role of verifying that the financial statements of the fund and its 279

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service providers give a true and fair view. As part of their checks auditors may identify weaknesses in the controls of the licensed entity, including the entity’s governance structures. In such instances the auditors are required to make a notification to the MFSA. Furthermore, the depositary and the auditors discuss their findings with the licensed entity and make recommendations for the strengthening of the overall governance of the entity. The quasisupervisory role of depositaries and auditors is fundamental for promoting the sound governance of licensed entities established in Malta. The day-to-day supervision carried out by European financial supervisors, such as the MFSA, may become more demanding and challenging, if the European institutions decide to approve the third country framework for passporting which is based on a Member State of Reference regime (herein referred as ‘MSoR’).82 The framework provides non-EU AIFM with the opportunity to get access to the internal market subject to inter alia obtaining authorisation in the MSoR83 and appointing a legal representative in the EU who would: (i) act as contact person on behalf of the non-EU AIFM in the EU; and (ii) be responsible for the compliance function in terms of the Directive.84 It is submitted that from a supervisory point of view the MSoR regime is not desirable given the potential supervisory difficulties that could result as a consequence of the remoteness of supervision. Firs, the third country financial supervisors of the non-EU AIFM may not provide sufficient cooperation where this is required. On a number of occasions the MFSA encountered delays in the response to requests for information from non-EU financial supervisors and the quality of the assistance received from these authorities left much to be desired. During an investigation of regulatory breaches, timely action is normally of essence; therefore the delay in response could have a significant impact on the MSOR’s action. Moreover, given the lack of proximity, the MSOR will have restricted direct access to the authorised non-EU AIFM, which access is normally required and necessary when serious regulatory issues arise. Furthermore, the 82

Directive on Alternative Investment Fund Managers, Article 37 ibid, Article 37 (1) 84 ibid, Article 37 (3) 83

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legal representative in the EU which the non-EU AIFM is required to engage85 will most likely have a limited degree of control over the operations of the non-EU AIFM. Lastly, having a legal representative in the MSoR might not be enough to allow a proper investigation of regulatory breaches to be carried out. A legal representative could easily resign where serious problems or difficulties materialise. For these reasons, it is reasonable to argue that from a supervisory perspective the MSOR regime is illogical and should not be implemented. In the final analysis, experience suggests that financial supervision in a dynamic financial environment presents a number of challenges, particularly the identification of risks and vulnerabilities to the financial system and investors, which may result from the business practices of licensed entities. The supervisory obligations to ensure compliance with new regulation, such as the AIFMD, cannot be underestimated. Unless mechanisms for supervision continue to evolve through supervisory cooperation and initiatives for supervisory convergence, and unnecessary supervisory risks avoided, the risk of supervisory failure will be high. It is therefore a sine qua non that the mechanisms for supervision should constantly evolve and be adapted to the changing environment.

Conclusion: The AIFMD - A Never Ending Story

This paper has examined the AIFMD from Malta’s perspective and analysed the most significant points made by Malta during the negotiation process, the transposition and implementation of the AIFMD. It is argued that the changes brought about by the AIFMD and the policy decisions made by Maltese authorities during the transposition process have strengthened the regulatory framework for investor protection and financial integrity in Malta. However, the implementation of the AIFMD does not stop here. The development of new regulation to address the risks that emerge from the financial system is an on-going project and presently the debate 85

ibid

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is focusing on whether asset managers may fall within the category of systemically important financial institutions (SIFI). ESMA is undertaking a project that will allow the sharing of data on fund management in Europe between financial supervisors. This project forms part of the European effort to pool more data and to strengthen the mechanisms for the monitoring of the financial system to identify possible threats to financial stability. In this connection the systemic relevance of asset managers and whether large players should be treated as SIFI is a topic, the outcome of which may have a considerable impact on the way we look at the asset management industry and the future regulation and supervision of this field of business. The present debate revolves around the idea that fund investors are subject to panics and destabilizing ‘runs’ that can create ‘fire sales’ that drive down markets, and spread damage to other investors and institutions. 86 As a result it is likely that policy action will be taken to designate certain players as SIFI and the imposition on such players of banking type requirements on capital, recovery and resolution.87 Office of Financial Research, ‘Asset Management and Financial Stability’ (2013) <http://www.treasury.gov/initiatives/ofr/research/Documents/OFR_AMFS_FINAL.p df> accessed 19 February 2015; Financial Stability Board, ‘Public responses to January 2014 consultative document Assessment Methodologies for Identifying NBNI G-SIFIs’ (2014) <http://www.financialstabilityboard.org/2014/04/r_140423/?page_moved=1> accessed 19 February 2015; Speech given by A G Haldane, ‘The age of asset management?’ (2014) <http://www.bankofengland.co.uk/publications/Documents/speeches/2014/speech723 .pdf> accessed 19 February 2015; Maijoor, ‘Systemic risks and current policies in the EU fund industry – Can asset managers be too big to fail?’ (2014) <http://www.esma.europa.eu/system/files/2014619_systemic_risks_and_current_policies_in_the_eu_fund_industry_iba_conference_ paris_-_steven_maijoor.pdf> accessed 19 February 2015 87 See the macro prudential rules in the Regulation of the European Parliament and of the Council (EC) 575/2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 [2013] OJ L176/1; the Capital Requirements Directive 2013/36/EU (no 43) and the Bank Recovery and Resolution Directive of the European Parliament and of the Council (EC) 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council [2014] OJ L173/190 86

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Nevertheless, the debate is still on going and clearly not everyone agrees with the proposals for designating asset managers as SIFI.88 The issue remains an open question but it is an important one, as any action in this regard will most certainly have an impact on the regulation of asset management and the industry’s future development, including Malta’s financial centre.

Commissioner Gallagher , ‘Public Feedback on OFR Study on Asset Management Issues ‘ (2014) <http://www.sec.gov/comments/am-1/am1-52.pdf> accessed 19 February 2015; Scott, ‘Why SIFI Designation Is Not The Answer To Possible Herding Behavior By Asset Managers’ (2014) <http://capmktsreg.org/press/why-sifidesignation-is-not-the-answer-to-possible-herding-behavior-by-asset-managers/> accessed 19 February 2015; and Schott Stevens, ‘Preserving the Unique Role of Asset Management’ (2014) <http://www.ici.org/pressroom/speeches/14_pss_malta> accessed 19 February 2015 88

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THE PROPOSED FOURTH ANTI-MONEY LAUNDERING DIRECTIVE: WHAT HAS CHANGED? STEPHANIE J COPPINI

_______________________________________________________ Dr Stephanie Jean Coppini is an Advocate within GANADO Advocates’ Corporate Team with particular focus on the formation and support of companies, regularly assisting clients in all corporate matters including corporate and company law advice, assistance with capitalisations, corporate financing and M&A transactions, and the dissolution and winding-up of companies. Dr Coppini also regularly assists in Prevention of Money Laundering related matters, and also delivers lectures in this area at the Institute of Legal Studies.

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Preamble

Money laundering and the financing of terrorism create a high risk to the integrity, reputation, stability and proper functioning, of the financial system. The ever-changing nature of money laundering and terrorist financing threats, which are facilitated by a constant evolution of technology and of the increasing means at criminals’ disposal, requires a permanent adaptation of the legal framework to counter such threats. Such a legal framework within the European Union (herein referred as the ‘EU’) already exists, and has existed for a number of years. However, although on the whole successful, it also has to adapt and evolve with the passage of time and at par with the introduction of new tactics employed by possible money launderers and terrorists.

Background

Following a period of consultation with various stakeholders, which period of consultation had started consequently to the European Commission’s report to the European Parliament and 285

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Council, dated 11 April 2012,1 on 5 February 2013, the Commission adopted a proposal, a proposal also of relevance to the European Economic Area (herein referred as the ‘EEA’) countries,2 for a directive of the European Parliament and of the Council on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing. This Directive, known as the Fourth Anti-Money Laundering Directive (herein referred as the ‘4AMLD’),3 is aimed at the reinforcement of the EU’s existing rules on anti-money laundering and the combating of the funding of terrorism (herein referred as the ‘AML-CFT’). As part of the same package the Commission also adopted, on the same date, a proposal for a regulation of the European Parliament and Council on information accompanying transfers of funds.4 The aim of this proposed regulation is essentially to secure due traceability of these transfers, and to revise Regulation (EC) No 1781/2006 on information on the payer accompanying transfers of funds 5 in ways

Report From the Commission to the European Parliament and the Council (EC) COM(2012) 168 final on the application of Directive 2005/60/EC on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing [2012]<http://ec.europa.eu/internal_market/company/docs/financia l-crime/20120411_report_en.pdf> accessed 15 October 2014 2 The EEA unites the current 28 EU Member States and the three EEA European Free Trade Association states of Iceland, Liechtenstein and Norway. 3 Proposal for a Directive of the European Parliament and of the Council (EC) COM(2013) 45 final on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing [2013] <http://eurlex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52013PC0045> accessed 2 October 2014. 4 Proposal for a Regulation of the European Parliament and of the Council (EC) COM/2013/044 final - 2013/0024 (COD) on information accompanying transfers of funds [2013] <http://eur-lex.europa.eu/legalcontent/EN/ALL/;ELX_SESSIONID=8v75T1TPjMz4LCjZDLwzjMKKYSDDJR7x XzKP05cyTN958FmGHQpQ!-1416663925?uri=CELEX:52013PC0044> accessed 1 October 2014 5 Regulation (EC) of the European Parliament and of the Council (EC) 1781/2006 on information on the payer accompanying transfers of funds [2006] OJ L345/1 <http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:345:0001:0009:EN:PDF> accessed 3 October 2014 286

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which improve traceability of payments and ensure that the EU framework remains fully compliant with international standards. 6 On the adoption of these proposals by the Commission, Home Affairs Commissioner Cecilia Malmström stated: Dirty money has no place in our economy, whether it comes from drug deals, the illegal guns trade or trafficking in human beings. We must make sure that organised crime cannot launder its funds through the banking system or the gambling sector. To protect the legal economy, especially in times of crisis, there must be no legal loopholes for organised crime or terrorists to slip through. Our banks should never function as laundromats for mafia money, or enable the funding of terrorism. 7 Plans are also in place to propose criminal law harmonisation for the offence of money laundering. 8 The proposal for the 4AMLD complements other actions taken or planned by the Commission in respect of the fight against crime, corruption, and tax evasion. Separately, the Commission is seeking the establishment of common minimum rules for how severely money laundering offences could be punished.9 The proposal for the 4AMLD is a response to changes, an overhaul in fact, at an international level, made to the Recommendations adopted by the Financial Action Task Force (herein referred as the ‘FATF’) in February 2012 and a review 6

This proposed regulation will however not be analysed in this article, as the focus is on the proposed 4AMLD. 7 --, ‘Anti-Money Laundering: Stronger rules to respond to new threats’ (Europa 2013) <http://europa.eu/rapid/press-release_IP-13-87_en.htm> accessed 15 October 2014 8 See the Commission’s roadmap [October 2012] at <http://ec.europa.eu/smartregulation/impact/planned_ia/docs/2013_home_006_money_laundering_en.pdf> accessed 2 October 2014. In fact, the very first recital of the Commission’s proposal stipulates: ‘In addition to the criminal law approach, a preventive effort via the financial system can produce results.’ Section 1 of the Explanatory Memorandum of the Commission’s proposal also goes around these plans. 9 Coyle, ‘Fourth Money Laundering Directive: A Regulatory Shift’ (Thomson Reuters Accelus, 2013) <http://accelus.thomsonreuters.com/sites/default/files/GRC005104th_EUMLD.pdf> accessed 14 October 2014

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conducted by the Commission on the implementation of Directive 2005/60/EC which is also known as the Third Anti-Money Laundering Directive, (herein referred as the ‘3AMLD’).10 The Commission undertook an impact assessment,11 where it analysed the potential consequences of money laundering and terrorism financing. It also analysed the impact of the legislative proposals on fundamental rights. The proposed revision of the 3AMLD is complementary to the revised FATF Recommendations which represent a substantial strengthening of the AML-CFT framework. On some issues, the 4AMLD even expands on the FATF’s requirements and provides additional safeguards. The 4AMLD will eventually repeal the 3AMLD. The best rationale for the necessity to amend the 3AMLD is highlighted in the Explanatory Memorandum of the Commission’s proposal. However, it is unofficially noted that the prevailing climate of anger against banks with insufficient AML-CFT mitigating measures, which led to huge fines being imposed on them, also played a part in the proposed new regime. 12

Timelines

The legislative process has been a long one. On 6 February 2013, a day after the adoption of the Commission’s proposal, the proposal was transmitted to both the European Parliament and the Council of Ministers under the ordinary legislative procedure. The Committee on Economic and Monetary Affairs jointly with the Committee on Civil Liberties, Justice and Home Affairs, 10

Directive of the European Parliament and of the Council (EC) 2005/60/EC on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing [2005] OJ L309/15 <http://eur-lex.europa.eu/legalcontent/EN/TXT/PDF/?uri=CELEX:32005L0060&from=EN> accessed 14 October 2014; The 3AMLD was transposed into Maltese law by the Prevention of Money Laundering and Funding of Terrorism Regulations (Subsidiary Legislation 373.01: Legal Notice 180 of 2008, as amended by Legal Notices 328 of 2009, 202 of 2012 and 464 of 2014) 11 Commission Staff Working Document Impact Assessment (ec.europa.eu/ 2013) <http://ec.europa.eu/internal_market/company/docs/financial-crime/130205_impactassessment_en.pdf> accessed 2 October 2014 12 Coyle (n 9) 288

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adopted the report by Krišjānis Kariņš (EPP, Latvia) and Judith Sargentini (Greens/EFA, The Netherlands) on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing which, on 28 February 2014, was tabled for the plenary sitting.13 Various substantial changes and enhancements were provided for in this report. The parliamentary committee recommended that the European Parliament’s position adopted at first reading, following the ordinary legislative procedure, should amend the Commission’s proposal. The European Parliament debated and voted on its first reading14 of the two draft legislations on 11 March 2014 and, consolidated the work done until then, handing it over to the next composition of the European Parliament after its elections held between the 22 and the 25 May 2014. This ensured that the new MEPs could decide not to start from scratch, but build on the work done during the previous term. The legislative resolution was passed by 643 votes to 30 with 12 abstentions. Five Maltese MEPs 15 voted against the parliamentary resolution on the 4AMLD. 16 The vote was not the final decision as the Council could reject the position of the European Parliament. In fact, the proposed directive is long awaiting the Council’s first reading and the budgetary conciliation convocation. At present there is political agreement in the Council on its first reading position. A series of opinions were then published. On 17 May 2013, the European Central Bank issued its opinion on the proposal for the 4AMLD, as well as on the proposal for a regulation on information Report of the European Parliament (EC) (COM(2013)0045 – C7-0032/2013 – 2013/0025(COD) on the proposal for a directive of the European Parliament and of the Council on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing [2014] <http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&refe rence=A7-2014-0150&language=EN> accessed 3 October 2014 14 European Parliament legislative resolution (EC) (COM(2013)0045) – C70032/2013 – 2013/0025(COD)) on the proposal for a directive of the European Parliament and of the Council on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing (Ordinary legislative procedure: first reading) <http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference =P7-TA-2014-0191> accessed 3 October 2014 15 One Maltese MEP was not present for the vote. 16 Refer to section 3.4 below 13

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accompanying transfers of funds. 17 The European Economic and Social Committee issued its opinion on these two proposals on 23 May 2013,18 while on 4 July 2013 an opinion on both proposals was issued by the European Data Protection Supervisor.19 Considering the lack of time available ahead of the elections to agree on a first reading agreement with the Council, the European Parliament decided that it did not want to engage in negotiations with the Council and aimed at starting a second reading procedure. Discussions about the 4AMLD had been taking place in the Council on a regular basis. The Council indicated that it was still aiming to reach an agreement under the first reading procedure during the second half of 2014, under the Italian Presidency. A further amended draft of the proposal of the 4AMLD was issued by the Presidency on 21 February 2014, while discussions on the proposed regulation on information accompanying transfers of funds by the Commission had begun and three working party meetings were held on 14 March 2014, 28 March 2014, and on 11 April 2014. Following these working party meetings, two presidency compromise texts were issued on the 25 March 2014 and 8 April 2014. 17

Opinion of the European Central Bank (EC) (CON/2013/32) on a proposal for a directive on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing and on a proposal for a regulation on information accompanying transfers of funds [2013] OJ L166/2 <http://eur-lex.europa.eu/legalcontent/EN/TXT/?uri=uriserv:OJ.C_.2013.166.01.0002.01.ENG> accessed 27 October 2014 18 Zeeb, Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council on information accompanying transfers of funds and the Proposal for a Directive of the European Parliament and of the Council on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing (European Economic and Social Committee, 2013) <http://eescopinions.eesc.europa.eu/eescopiniondocument.aspx?language=en&docnr =1767&year=2013> accessed 27 October 2014 19 Opinion of the European Data Protection Supervisor on a proposal for a Directive of the European Parliament and of the Council on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing, and a proposal for a Regulation of the European Parliament and of the Council on information on the payer accompanying transfers of funds (edps.europa.eu 2013) <https://secure.edps.europa.eu/EDPSWEB/webdav/shared/Documents/Consultation/ Opinions/2013/13-07-04_Money_laundering_EN.pdf> accessed 27 October 2014 290

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On 12 May 2014, the Greek Presidency made the fourth presidency compromise publicly available. Various amendments to the text were made. This presidency compromise was shared with the Delegations in the Permanent Representatives Committee (herein referred as the ‘COREPER’) 2 meeting of 28 May 2014. On 10 June 2014, the Commission adopted its position – in partial agreement – on the European Parliament amendments on the first reading. On 15 June 2014, the Council published a note dated 13 June 2014, outlining its general approach to the proposed 4AMLD. The general approach is set out in document 10970/14;20 on the other hand document 10971/14 pertains to the proposed regulation on information accompanying transfers of funds. 21 Various clarifications and enhancements have been made, including amendments to the definitions that are less rigid and elaborate than the text adopted by the European Parliament. The Council attempted to make the directive ‘cleaner’, that is simpler, more user-friendly, and comprehensive, although there were still minor shortcomings like linguistic errors. It is interesting to note that this compromise text had the support of all Member States (MSs) 22 with the exception of Malta and Austria, and these MSs’ arguments are outlined below. On 18 June 2014, the Council published a press release stating that COREPER 2 called upon the incoming Italian presidency to begin negotiations with the new European Parliament to adopt the 4AMLD at early second reading. During the COREPER 2 meeting on this date, ambassadors of the EU MSs officially approved and agreed on a General Approach. The EP and the Council were expected to engage in trialogue meetings in October 20

General Approach on the Proposal for a Directive of the European Parliament and of the Council on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing [2014] <http://register.consilium.europa.eu/doc/srv?l=EN&f=ST%2010970%202014%20INI T> accessed 28 October 2014 21 General Approach (EC) on the Proposal for a Regulation of the European Parliament and of the Council on information accompanying transfers of funds [2014] <http://register.consilium.europa.eu/doc/srv?l=EN&f=ST%2010971%202014%20INI T> accessed 28 October 2014 22 Hereinafter, where applicable, referred to as MS in the singular.

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2014, with a view to adopting the new rules at early second reading, aiming to reach an agreement on the text before the end of 2014. This is despite the fact that in its conclusions of 22 May 2013, the Council had called for rapid progress and inter alia stated that the revision of the 3AMLD would be completed by the end of 2013. 23 There was great pressure for the 4AMLD to be adopted prior to the end of 2014, but such deadline was not met. However, progress was made in January 2015, where with a view to the COREPER 2 meeting of 15 January 2015, the final compromise text was issued on 12 January 2015.24 On 27 January 2015, at the 3366th meeting of the Council (Economic and Monetary Affairs), the 4AMLD passed through a first reading.25 The text still needs to be endorsed by the European Parliament (around March or April 2015) and by the EU Council of Ministers. According to article 114 of the Treaty on the Functioning of the EU, the proposed directive requires a qualified majority for adoption by the Council, in agreement with the European Parliament. Given that there have been various developments, with the result of having several drafts of the text, including those of the Commission, the European Parliament, and the Council (twice), this article purports to give an overview of the regulatory shift in the form of the proposed principal changes as envisaged so far, 26 within their historical legislative background in chronological order as outlined above, that are to be made to the current 3AMLD.

Conclusions of the European Council (EC) EUCO 75/1/13 REV 1 CO EUR 7 COCL 5 [2013] <http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/137197.pdf > accessed 28 October 2014 24 Note from the Presidency to the Permanent Representatives Committee <http://data.consilium.europa.eu/doc/document/ST-5116-2015-ADD-2/en/pdf> accessed 25 February 2015 25 Legislative Deliberations <http://data.consilium.europa.eu/doc/document/ST-54632015-INIT/en/pdf> accessed 25 February 2015. The text was also endorsed by the Civil Liberties committee of the European Parliament. 26 This article reflects the position as at the end of its completion, i.e. 28 February 2015. 292

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The Main Changes

The 4AMLD is introducing quite a few changes, some of which are major, to the 3AMLD. These are designed to be evolutionary rather than revolutionary, 27 and it is of paramount importance to delve into the main modifications in relation to the following classifications. These shall be briefly explained in turn. 3.1 The extension of the directive’s scope The two main changes proposed are the reduction of the threshold for traders in high value goods dealing with cash payments and the introduction of providers of gambling services which must be authorised28 in the AML-CFT legislation. Under the 3AMLD, traders in goods are included in the scope of the directive if they deal with cash payments of €15,000 or more. After receiving information from MSs that this relatively high threshold was being exploited by criminals, in the Commission’s proposal the threshold was lowered to €7,500. However, it is pertinent to point out that in the previous compromise text, the Council increased the above-mentioned threshold of €7,500 to €10,000, and this has remained in the final compromise text. The second major change is due to the fact that the 3AMLD requires that only casinos be included in the scope of AML-CFT legislation. Evidence in the EU suggests that this is leaving other areas of gambling vulnerable to misuse by criminals. Providers of gambling services are now also included under the definition of obliged entities.29 Thus, parity is created among providers in the gambling sector. With the exception of casinos, MSs may decide to exempt in full or in part certain gambling services from national provisions, transposing this directive on the basis of the low risk 27

Coyle (n 9) In accordance with Directive 2000/31/EC on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market [2000] OJ L 178/1 <http://www.esma.europa.eu/system/files/00_31.pdf> accessed 3 October 2014 29 This is the new term that has been introduced to substitute the term ‘subject persons’ used in the 3AMLD. 28

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posed by the nature, and where appropriate, the scale of operations of the services following risk assessments. MSs shall notify the Commission of their decision. In the European Parliament’s version, the cases where Customer Due Diligence (herein referred as the ‘CDD’) measures were to be applied by obliged entities were increased to include casinos when carrying out occasional transactions amounting to €2,000 or more, whether the transaction is carried out in a single operation or in several operations which appear to be linked; online gambling when establishing the business relationship; for other providers of gambling services when paying out winnings of €2,000 or more; and whenever a company is established. The Council’s text (both the previous and the current) has done away with these, and with regard to providers of gambling services, it limits CDD to either upon the collection of winnings and/or upon the wagering of a stake. MSs would similarly be allowed exemptions, subject to particular conditions, for certain types of electronic money30 instruments. This is more or less similar to the addition in this respect made by the European Parliament. However, with regard to the previous compromise text, Malta considered that there should be no exemptions in relation to gambling services from the provisions of the directive or, in any case, no different treatment of online and offline gambling. Therefore, Malta opposed article 2(1a) of that compromise text, which provided the possibility of exemption for the providers of gambling services, except for cross-border gambling. Furthermore, Malta maintained its reservations on the procedure for such an exemption.31 In the Commission’s version, real estate agents were redefined as ‘real estate agents, including letting agents’, thus 30

As defined in art 2(2) of Directive 2009/110/EC of the European Parliament and of the Council on the taking up, pursuit and prudential supervision of the business of electronic money institutions amending Directives 2005/60/EC and 2006/48/EC and repealing Directive 2000/46/EC [2009] OJ L267/7 <http://ec.europa.eu/yqol/index.cfm?fuseaction=legislation.show&lid=8> accessed 1 October 2014 31 Note from the Presidency to the Permanent Representatives Committee, 10973/14[2014] <http://www.parlament.gv.at/PAKT/EU/XXV/EU/02/93/EU_29326/imfname_10474 956.pdf> accessed 1 October 2014 294

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widening application, although this is not present in the Council’s version. However, the preamble of the current compromise text provides: ‘Estate agents could be understood to include letting agents where applicable.’ New definitions have also come in, such as ‘gambling services’ and ‘group’. The concept of a group programme is being introduced, in that the home competent authority for group-wide policies and controls, and the host competent authority for branches and subsidiaries, may consider that an obliged entity applies the measures on third party reliance through its group programme when the listed conditions are fulfilled. Obliged entities that are part of a group are to implement group-wide policies and procedures, including policies for data protection and sharing of information within the group, effectively implemented at the level of branches and majority-owned subsidiaries in MSs and third countries. Tax crimes, related to direct and indirect taxes, are also being introduced, in order to reflect the revised FATF Recommendations. The definition of ‘beneficial owner’ has been clarified further, particularly in relation to the percentage threshold of 25%. In the case of trusts, the beneficial owner shall include the identity of the settlor, trustee(s), the protector, if any, the beneficiary or class of beneficiaries, and any other natural person exercising ultimate control over the trust including through direct or indirect ownership or through other means. The Council’s previous and current compromise text even explain control in the context of the identification obligation. A list of criteria, to be totally fulfilled by the legal or natural person, is provided whereby MSs may decide that legal and natural persons who engage in a financial activity on an occasional or very limited basis where there is little risk of money laundering or funding of terrorist financing occurring, do not fall within the scope of the 4AMLD. 3.2 The risk-based approach While the 4AMLD recognises that the use of a risk-based approach is an effective way to identify and mitigate risks to the financial system and wider economic stability in the internal market area, it proposes new standards by requiring evidence-based 295

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measures to be implemented in three major areas which will be outlined in the forthcoming paragraph. Each of these would be supplemented with a minimum list of factors to be taken into consideration or guidance to be developed by the European Supervisory Authorities (herein referred as the ‘ESAs’).32 MSs will be required to identify, understand, and mitigate the risks facing them. This can be supplemented by risk assessment work carried out at a supra-national level33 and the results should be shared with other MSs, obliged entities, the Commission and ESAs. The concept of a national risk assessment (herein referred as the ‘NRA’), to be prepared by each MS, is introduced. Malta has already passed through this during the last quarter of 2013, and this is a project which is still underway. The NRA is a process of identifying and evaluating the money laundering and terrorist financing risks in a particular jurisdiction and analysing the main sources and drivers of the risks in order to develop effective and risk-based policies and actions, and allocate the available resources in the most efficient way to eliminate, control, and mitigate the identified risks. Obliged entities would thus be required to identify, understand, and mitigate their own risks, and to document and update the assessments of risks they undertake. This is a key element of the risk-based approach, allowing competent authorities within MSs to thoroughly review and understand the decisions made by obliged entities under their supervision. Ultimately, and this is very significant, those adopting a risk-based approach would be fully accountable for the decisions they make. This would mean that the supervisors’ resources can be used to concentrate on areas where the risks of money laundering and terrorist financing are greater. Eugene McConville, ex-head of financial intelligence at the UK’s Serious Organised Crime Agency, has been recorded as saying: The rules are that it is risk based; it is not you turn everyone down. Ultimately, you look at someone, you make a decision, and you record it.34

See also section 3.8; The ESAs are the European Banking Authority (referred as ‘EBA’), the European Securities and Markets Authority (referred as ‘ESMA’), and the European Insurance and Occupational Pensions Authority (referred as ‘EIOPA). 33 For example by the ESAs. 34 Coyle (n 9) 296

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Another innovation is that the lists of countries published by FATF are mentioned in the Commission’s version of the directive itself, which provides that MSs are to periodically endorse and adopt these lists, so as to develop a common approach and common policies against high-risk and non-cooperative jurisdictions with deficiencies in the field of money laundering and terrorist financing. This has however been done away with in the Council’s text, both previous and current, and instead the Commission is given new responsibilities to identify and monitor AML-CFT risks of third countries with strategic deficiencies in this area. Appointing a compliance officer at management level, as well as having an independent audit function depending on the size and nature of the business, are other innovations. When performing identification and verification measures, obliged entities are also required to verify that any person purporting to act on behalf of the customer is so authorised to do so, and are required to identify and verify the identity of that person. An annex is being included as part of the 4AMLD, displaying a non-exhaustive list of risk variables that obliged entities must consider when determining to what extent to apply CDD measures. 3.3 Simplified and enhanced customer due diligence Through the 4ALMD, obliged entities would be required to take enhanced measures where risks are greater and may be permitted to take simplified measures where risks are demonstrated to be less serious. The provisions on simplified CDD in the 3AMLD were found to be overly permissive, with certain categories of clients or transactions being given outright exemptions from CDD requirements. The 4AMLD does not make any direct reference as to what constitutes simplified CDD since the approach is geared towards a more risk-based evaluation. The Commission’s version of the 4AMLD introduced the concepts of ‘Foreign’, ‘Domestic’ and ‘International’ politically exposed persons (herein referred as the ‘PEPs’). Foreign PEPs are natural persons who are or have been entrusted with prominent public functions by a third country. Domestic PEPs are natural persons who are, or have been, entrusted by the MS with prominent 297

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public functions. Persons who are or have been entrusted with a prominent function by an international organisation include directors, deputy directors and members of the board, or any person having an equivalent function in an international organisation. Enhanced CDD was to be required in the case of Foreign PEPs, while when Domestic PEPs and International PEPs are involved, enhanced CDD was only called for in high risk cases. The present position is that in respect of Domestic PEPs normal CDD should be applied, and Enhanced CDD measures should be applied in respect of PEPs residing in another MS or in a third country. The previous and current Presidency compromise text removed these different categories of PEPs, essentially meaning that all PEPs must be treated the same. In the European Parliament’s amendments, PEPs’ family members do not include the children and their spouses or partners, or the PEPs’ parents. This was however re-inserted in the Council’s version. A new provision suggested by the European Parliament stated that the Commission, in cooperation with MSs and international organisations, must draw a list, for information purposes, of Domestic and International PEPs, which shall be accessible by competent authorities and obliged entities, but this has been deleted by the Council. The 4AMLD contains separate annexes with a nonexhaustive list of factors relating to customer, jurisdiction, product, service, transaction or delivery channel, and types of evidence of potentially lower risk and of potentially higher risk, including types of enhanced CDD measures to be implemented as a minimum. Hence, more guidance to obliged entities in assessing money laundering and terrorist financing risks is provided. 3.4 Information on the beneficial owner Chapter III (covering beneficial ownership information) of the 4AMLD is the most controversial change so far, thus meriting more analysis. The provisions in this chapter have also been subjected to significant amendments in the afore-mentioned report by Krišjānis Kariņš and Judith Sargentini. New measures are being proposed to provide enhanced clarity and accessibility of beneficial ownership information, as will be discussed below.

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The current compromise text proposes that MSs should ensure that companies and other entities having legal personality incorporated within their territory obtain and hold adequate, accurate and current information on their beneficial ownership, including the details of the beneficial interests held. The text of the European Parliament was so detailed that it even went into the minimum information needed to clearly identify the company and its beneficial owner, as well as the information required with regards to trusts or other types of legal entities and arrangements with a similar structure or function, whether existing or future. The current compromise text provides that MSs must require that trustees of any express trust governed under their law obtain and hold adequate, accurate and current information on beneficial ownership regarding the trust. The information shall include the identity of the settlor, of the trustee(s), of the protector, if relevant, of the beneficiaries or class of beneficiaries, and of any other natural person exercising effective control over the trust. MSs shall ensure that trustees disclose their status and provide in a timely manner the above information to obliged entities when, as a trustee, the trustee forms a business relationship or carries out an occasional transaction above the stipulated threshold. MSs shall require that that information can be accessed in a timely manner by competent authorities and financial intelligence units (herein referred as ‘FIUs’). The same measures shall apply to other types of legal arrangements with a structure or functions similar to trusts. The current compromise text states that MSs are to require that the required information is held in a central register ‘when the trust generates tax consequences’. Such register shall ensure timely and unrestricted access by competent authorities and FIUs, without alerting the parties to the trust concerned. It may also allow timely access by obliged entities when taking CDD measures in terms of Chapter II of the 4AMLD. According to the current compromise text, the information on beneficial ownership shall be accessible by competent authorities and FIUs of all MSs in a timely manner without restriction (but without alerting the entity concerned), and to obliged entities in the framework of the conduct of CDD according to Chapter II of the 4AMLD. The information should also be accessible to any person or 299

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organisation ‘that can demonstrate a legitimate interest’, and these shall access at least the following information on the beneficial owner: name, month and year of birth, nationality, country of residence, and nature and extent of beneficial interest held. The qualification ‘than can demonstrate a legitimate interest’ is unfortunately ambiguous and open to interpretation, and it is hoped that guidelines will be issued. MSs should also be required to take measures to prevent misuse based on bearer shares and bearer share warrants. The information shall be held in a central register in each MS, such as a commercial register, companies register or a public register, available in line with data protection rules and may be subject to online registration and to the payment of a fee which shall not to exceed the administrative costs thereof. Most probably, in Malta both registers will be maintained by the Malta Financial Services Authority, similar to that already existing with respect to the register of companies. An amendment to article 29, regulating the retention of beneficial ownership information for legal entities, was made under the previous Presidency compromise text allowing MSs to permit obliged entities to access the beneficial ownership information which would otherwise be retained in the jurisdiction’s specified location or through other appropriate mechanisms. The Council’s approach was to require unrestricted access to stored information for competent authorities, FIUs, and if permitted by the MS, the obliged entity. However, it allowed flexibility for MSs in establishing the means for ensuring this, while giving examples of the varied forms that a storage mechanism can take. The same criteria were made applicable to article 30, regulating the holding of beneficial ownership information for trusts and similar arrangements, as envisaged by the Commission. With regard to the information to be held for both corporate and legal entities and trusts, MSs shall require that obliged entities do not rely exclusively on the central register to fulfill their CDD obligations as stipulated in the 4AMLD – those obligations shall be fulfilled using a risk-based approach. During 2014 there was an interesting debate going on, with some MSs arguing against having a public register of ultimate beneficial owners of companies and a public register of trusts. Austria’s concerns still persist in relation to storage of beneficial 300

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ownership information. On the mechanism for holding the beneficial ownership information, Austria has shown a strong preference for a central register. With regard to the access to that information, Austria strongly prefers full public access. 35 In particular, the proposed public register of trusts has not gone down well with trust jurisdictions such as the UK and Malta. It is precisely for this reason that Malta’s MEPs voted against the parliamentary resolution. It is pertinent to note what the UK’s Prime Minister David Cameron wrote on the matter: Europe must now, through the 4 th Money Laundering Directive visibly lead global efforts to strengthen transparency of company beneficial ownership. Put simply, a lack of knowledge about who ultimately owns and controls companies facilitates illicit domestic and cross-border money laundering, corruption, tax evasion and other crimes. G8 leaders agreed in June that companies should be required to obtain and hold adequate, accurate and current information on their beneficial ownership. The UK strongly supports this very same commitment in the European Commission’s MLD proposal. And I was pleased that G20 leaders vowed to lead by example in ensuring that the relevant Financial Action Task Force standards in this area are met I announced that the UK’s central register of beneficial ownership will be open to the public. I concluded that a publicly accessible registry provides the best outcome for sound corporate behaviour; more effective law and tax enforcement; and for helping authorities, including those in developing countries, prevent misuse of companies for illicit purposes. I believe this will prove a significant step towards breaking through the walls of corporate secrecy. But as I warned this year, illicit finance is a global problem that can only be addressed 35

Note from the Presidency to the Permanent Representatives Committee (n 29), and Note from the Presidency to the Permanent Representatives Committee <http://data.consilium.europa.eu/doc/document/ST-5116-2015-ADD-3-REV2/en/pdf> accessed 27 February 2015.

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through collective action. I hope other governments will join the UK in making an even bigger difference by taking swift action on company beneficial ownership. In Europe, our first collective step should be to mandate, through the MLD, the establishment of public central registries of company beneficial ownership as the cutting-edge benchmark for countries and major financial centres to emulate across the world. Central registries will not only enable law enforcement and tax authorities to access, discreetly and at short notice, critical information for cross-border investigations; public scrutiny of this information through public registries will also increase the likelihood of inaccuracies and omissions being identified and rectified. I know some want Europe to go even further to prevent the abuse of trusts and related private legal arrangements. It is clearly important we recognise the important differences between companies and trusts. This means that the solution for addressing the potential misuse of companies – such as central public registries – may well not be appropriate generally. 36 Cameron’s plans of action cannot be clearer. In fact, on 15 July 2014, it was reported that the UK Government announced that it was going to fully open up all its digital data, making it available free of charge. The UK will be the first to do so. Denmark publishes most of its information as open data, except for information relating to the accounts and financial statements of companies. This change will come into effect from the second quarter of 2015 (April - June), and will mean that, as well as the existing basic company information, accounts, information on appointments, charges on assets or mortgages, and all image filings will be free for

Cameron, ‘Letter to His Excellency Mr. Herman Van Rompuy President of the European Council’ (gov.uk, 2013) <https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/2589 97/PM-letter-tax-evasion.pdf> accessed 10 October 2014; David Cameron’s words succinctly summarise the newly-found importance of public registers. 36

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all users.37 As a result, it will be easier for businesses and members of the public to research and scrutinise the activities and ownership of companies and connected individuals. It is a considerable step forward in improving corporate transparency; a key strand of the G8 declaration at the Lough Erne summit in 2013. By making its data easily available and free of charge, Companies House is making the UK a more transparent, efficient and effective place to do business in. This approach is part of the process of transforming government services to make them more efficient and effective for users, with the expectation of boosting the UK economy. 38 Since 2010, Global Witness, a London-based nongovernmental organisation backed by hedge-fund billionaire George Soros and devoted to fighting corruption in the developing world, has worked with a coalition of non-governmental organisations that lobby political leaders in London, Brussels and Washington to force companies to identify their ultimate beneficial owners. A bipartisan group of United States’ senators is co-sponsoring a bill that would require all fifty states to identify the beneficial owners of ventures incorporated in their jurisdictions. 39 It is therefore evident that the major world powers are correctly moving in the same direction, and this is applaudable considering the increasing difficulty in fighting money laundering and terrorist financing. Apparently, all the lobbying in the EU during 2014, particularly as concerns the treatment of trusts, has worked, as evident in the amendments to articles 29 and 30 made in the Council’s current compromise text.

‘UK Companies House to go fully open’ (intax-info, 2014) <http://www.intaxinfo.com/index.php?option=com_content&view=article&id=2216%3A2014-07-1812-00-13&catid=2%3Anews&Itemid=32&lang=en> accessed 27 October 2014 38 ‘Free Companies House data to boost UK economy’ (gov.uk, 2014) <https://www.gov.uk/government/news/free-companies-house-data-to-boost-ukeconomy> accessed 27 October 2014 39 Robinson, ‘Corruption Fighter Gooch Tackles Abusive Shell Companies’ (Bloomberg, 2014) <http://www.bloomberg.com/news/2014-09-11/corruptionfighter-gooch-tackles-abusive-shell-companies.html> accessed 13 October 2014 37

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3.5 Third country equivalence The 4AMLD removes the provisions relating to positive ‘equivalence’, as the CDD regime is becoming more strongly riskbased and the use of exemptions on the grounds of purely geographical factors is less relevant. Nonetheless, the European Parliament, to the section on Performance by Third Parties, added a provision obliging the Commission to provide a list of jurisdictions having AML-CFT measures equivalent to the provisions of the directive and other related rules and regulations of the EU, which list should be regularly reviewed and updated according to information received from MSs. The Council’s text has removed this provision, but included a separate section entitled ‘Third Country Policy’ whereby the Commission is being empowered to adopt delegated acts to identify high-risk third countries with strategic deficiencies in their AML-CFT regime. Whereas the 3AMLD requires credit and financial institutions to apply, in their branches and majority-owned subsidiaries located in third countries, CDD and record keeping measures at least equivalent to those provided in the directive itself, the 4AMLD goes further, in that the requirement applies to all obliged entities. The obliged entities’ branches or majority-owned subsidiaries located in third countries where the minimum AMLCFT requirements are less strict than those of the MS, are to implement the requirements of the MS, including data protection, to the extent allowable by the third country’s laws and regulations. A drastic measure has been introduced, in that if the additional measures taken by obliged entities where the third country’s legislation does not permit application of the MS’s requirements, are not sufficient, competent authorities in the home country shall exercise additional supervisory actions including requesting the group to close down its operations in the host country. The Presidency version added a provision to the effect that enhanced CDD need not be resorted to automatically as far as concerns branches and majority-owned subsidiaries of obliged entities established in the EU which are however located in high risk jurisdictions identified by the Commission, if these branches and majority-owned subsidiaries fully comply with the group-wide policies and procedures. Obliged entities should nevertheless deal 304

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with such cases using a risk-based approach. The current Presidency version refined this by adding that MSs shall prohibit obliged entities from relying on third parties established in third countries indicated as high risk by the Commission, with the exemption being if these branches and majority-owned subsidiaries fully comply with the group-wide policies and procedures. 3.6 Administrative sanctions In line with the Commission policy to align administrative sanctions, the 4AMLD has a range of sanctions that MSs should ensure are available for systematic breaches of key requirements of the directive, in particular, CDD, record keeping, suspicious transaction reporting, and internal controls. Competent authorities and obliged entities have reporting obligations in relation to breaches of the national provisions implementing the directive. Benchmarking, linked to turnover or profits, of the administrative pecuniary sanctions that can be applied, is being introduced. With regard to the provisions concerning sanctions, the previous Presidency compromise text provides that MSs can set a maximum level of pecuniary fines of no less than €1 million, or, in the case of breaches involving credit or financial institutions, a maximum level of sanctions of at least €5 million which vary for a legal person or a natural person. The ‘name and shame’ approach is another innovation – this is one severe sanction that can be applied by issuing a public statement indicating the person and the nature of the breach. However, this can only be applied if this sanction is found to be proportionate to the case at hand, which proportionality should be decided on a case-by-case basis. Moreover, where publication would cause a disproportionate damage to the parties involved, competent authorities may publish the sanctions on an anonymous basis.

3.7 Financial Intelligence Units The 4AMLD brings in, through the provisions of Council Decision 2000/642/JHA of 17 October 2000, arrangements for cooperation between FIUs of MSs in respect of exchanging 305

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information,40 and further extends and strengthens cooperation amongst MSs’ FIUs. International FIU co-operation was envisaged in the Commission’s, the European Parliament’s, and the previous compromise text of the Council, but has been removed in the Council’s current compromise text. Cooperation with Europolwas added in the European Parliament’s version. Within established parameters, FIUs shall respond to requests for information by law enforcement authorities, or competent authorities in the Council’s versions, in their MSs. Associated predicate offences (even more mentioned in the Council’s versions) now also fall within the remit of FIUs, apart from potential money laundering and terrorist financing. The scope of the statistics to be compiled by FIUs now gains importance due to the preparation of national risk assessments. Very interesting is the extension of the categories for which MSs have the possibility to designate an appropriate self-regulatory body of the professions as the authority to be informed in the first instance in place of FIUs, in line with the case law of the European Court of Human Rights. In all circumstances however, MSs shall provide for the means, and manner by which, to achieve the protection of professional secrecy, confidentiality, and privacy. Even the role of competent authorities has been enhanced, with the inclusion of a list of required standards of their staff. 3.8 European supervisory authorities The 4AMLD envisages a lot of co-operative work for the ESAs. These are not featured in the 3AMLD. The ESAs are, inter alia, asked to carry out an assessment and provide an opinion on the money laundering and terrorist financing risks facing the EU. They are also tasked with providing regulatory technical standards and guidelines for certain issues where financial institutions have to adapt their internal controls to deal with specific situations.

Council Decision (EC) 2000/642/JHA) concerning arrangements for cooperation between financial intelligence units of the Member States in respect of exchanging information [2000] OJ L271/4 <http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2000:271:0004:0006:EN:PDF> accessed 27 October 2014 306

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In the 4AMLD texts of the Commission and the European Parliament, there is no reference to the Committee for the Prevention of Money Laundering and Terrorist Financing, which was set up to assist the Commission, but it has been reproduced again in both versions of the Council’s amendments. 3.9 Data Protection The 4AMLD gives significant importance to data protection, that is, the need to strike a balance between allowing robust systems, controls and preventative measures against money laundering and terrorist financing on the one hand, and protecting the rights of data subjects on the other. Reference is made to Directive 95/46/EC.41 With regard to the extension period of CDD record-keeping, the maximum retention period suggested by the European Parliament was done away with, while that of the Commission, which was 10 years, was changed by the Council’s previous compromise text to ‘shall not exceed the limitation period provided for in their national law and, in any case, 15 years’. The Council’s current compromise text provides for 5 years. Upon the expiration of this period, personal data shall be deleted unless otherwise provided for by national law, which shall determine under which circumstances obliged entities may or shall further retain data. MSs may allow or require further retention (which must not exceed 5 additional years) after carrying out a thorough assessment of the necessity and proportionality of such extension and if necessary for the prevention, detection, or investigation of money laundering and terrorist financing.

Directive of the European Parliament and of the Council (EC) 95/46/EC on the protection of individuals with regard to the processing of personal data and on the free movement of such data [1995] OJ L281/0031 < http://europa.eu/legislation_summaries/information_society/data_protection/l14012_e n.htm> accessed 27 October 2014

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The Way Forward

Transparency International, the global civil society organisation leading the fight against corruption, welcomed all the developments so far in relation to the 4AMLD. 42 It is now just a question of when the 4AMLD is finally adopted and with what actual provisions from the numerous changes seen above, and how it will eventually be transposed into the Laws of Malta. It will be interesting to see what changes would be made to the Maltese legislation on the subject, although there is still a long way to go before such changes can indeed be implemented. The transposition period for MSs is of two years. Nonetheless, all subject persons should, in advance, prepare themselves as soon as is reasonably practicable, generally by aiming at having their internal policies and procedures ready for the major changes to be triggered by the 4AMLD.

Clark, ‘The 4th Anti-Money Laundering Directive: Brussels Hears What We Want To Talk About’ (Transparency International, 2013) <http://www.transparencyinternational.eu/2013/03/the-4th-anti-money-launderingdirective-brussels-hears-what-we-want-to-talk-about/> accessed 10 October 2014 42

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