A sports car that was confiscated by court order and sold at auction had to be returned to the government and destroyed after it emerged that €4,000 in registration fees incurred by the owner could not be waived.
The law courts’ Asset Management Unit had sold the car to the buyer for €3,000 to liquidate the government asset. But when the buyer found out about the unpaid fees the unit refunded him and took back the vehicle.
It later emerged that the owner, who knew the car would be confiscated by the courts when he was found guilty, had not paid fines owed to Transport Malta before the start of his court case.
Lawyer John Seychell Navarro, assistant registrar of the Criminal Courts, used this example to illustrate problems faced by the unit due to the lack of clear guidelines.
At the moment, the law states that frozen assets cannot be sold by the owner – but it does not go into what happened between the freezing and the confiscation, leading to situations that hinder the government from benefiting from seizing the asset.
The issue was raised earlier this month by lawyer Philip Galea Farrugia, from the Attorney General’s office, during a seminar about the ongoing drug reform.
He said that, while confiscated money went into the government’s coffers, other assets such as property were confiscated but not liquidated and this had to be addressed.
Dr Seychell Navarro said that the Asset Management Unit needed to be better regulated and staffed to cater for the various circumstances that arose.
This year alone the courts issued 58 freezing orders – 23 were linked to drug cases
He set up this unit in 2012, when a legal amendment tasked the Criminal Court Registrar to start compiling reports of all assets of people who were given a freezing order by the courts.
For each case the unit sends out 680 letters to all financial institutions (updated continuously by MFSA) and all government agencies or departments that can hold assets. Items listed in the report can be confiscated on conviction.
A freezing order is issued when a person is charged with drug trafficking, money laundering or committing other crimes warranting a jail term of a year or more.
This year alone the courts issued 58 freezing orders – 23 of which were linked to drug cases.
Confiscated assets can be money, movables such as cars and boats or immovable property; that is, buildings.
Money was the most straightforward asset, with about €150,000 having been taken from drug traffickers’ bank accounts since 2012, Dr Seychell Navarro said.
This was besides the lengthy jail terms and around €500,000 in fines that these people paid.
However, immovable property is a much more difficult proposition. Since 2012 there had only been three cases of successful confiscation.
This was mainly due to third-party rights and also because owners initiated civil court proceedings, in most cases stating the property was not bought with illicit money. Another major problem faced by the unit was that, in pre-2012 cases, despite the issuing of a freezing order, the court did not always ask for an asset report, so when there was a confiscation, it was not clear what should be confiscated years later.