Laundering freeze under pre-2024 law covers all assets
The First Hall of the Civil Court held on 23 March 2026 that a money laundering freezing order could not be cut down to the alleged proceeds, and that other remedies kept it proportionate. It matters to lawyers acting for accused persons whose assets are frozen.
In B.C. vs L-Avukat Generali, the First Hall of the Civil Court (Constitutional Jurisdiction) dismissed on 23 March 2026 a claim by a man charged with money laundering. Madam Justice Rachel Montebello held that the magistrate was right to refuse to limit the freezing order over his assets to the alleged proceeds of crime. The court found that the law, taken with its other remedies, did not breach his right to property or to a fair hearing.
The facts
In March 2021 B.C. was charged before the Court of Magistrates (Malta), sitting as a court of criminal inquiry, with several offences, among them money laundering under article 3(1) of the Prevention of Money Laundering Act (Chapter 373 of the Laws of Malta). Two companies were charged with him.
On the same day, at the request of the Attorney General, the court froze all his assets. It allowed him €13,976.24 a year to live on.
In February 2022 he asked the magistrate to hear the prosecution on the amount of the alleged proceeds and then to limit the order to that amount. Two police inspectors testified but could not give a figure. On 9 May 2022 the court refused, holding that the law did not allow it to limit the order to a fixed value.
B.C. then filed a constitutional application. He argued that the decree breached article 1 of the First Protocol to the European Convention on Human Rights, article 6 of the Convention and article 39 of the Constitution.
What the court held
Article 5(1) of Chapter 373, as it stood before Act VI of 2024, required a general seizure of the accused's money and movable property and barred him from disposing of any property. Article 5(3) adds: “Il-qorti tista’ f’ċirkostanzi partikolari tibdel dak l-ordni” (The court may in particular circumstances vary that order).
The court rejected the argument that article 5(3) gave the magistrate a free hand. It held that “ebda varjazzjoni ta’ l-Ordni ma għandu jiġi permess jekk l-effett tal-bdil ikun tali li jidderoga minn u jikkozza mar-regola fondamentali ġenerali enunċjat fl-artikolu 5(1)” (no variation of the order is to be allowed if its effect would depart from and clash with the general rule in article 5(1)).
The reason lies in confiscation. On conviction for money laundering, article 3(7) of Chapter 373 applied article 22(3A)(d) of the Dangerous Drugs Ordinance (Chapter 101), which requires the confiscation of all the offender's property. Article 3(5)(a) presumes, until the contrary is proved, that all such property derives from the offence.
Article 3(6) of the Proceeds of Crime Act (Chapter 621) also defines property subject to confiscation more widely than proceeds. An order limited to proceeds would defeat the purpose of the freeze, which the legislator could never have intended.
The court then applied article 1 of the First Protocol. The freeze had a legal basis and a legitimate aim: stopping an accused person from hiding assets that may later be confiscated. On fair balance, the court looked at the remedies as a whole.
B.C. could have asked the Criminal Court, within three working days, to revoke the order in whole or in part under article 5(9) of Chapter 373, article 23A(5) of the Criminal Code (Chapter 9) and article 36 of Chapter 621. He did not. He did obtain several variations, allowing payments to creditors and insurers and the running of his business.
The court found no proof of real hardship. Under article 36 of Chapter 621 he could have asked for €600 every 15 days, or €15,600 a year, instead of the lower allowance. It rejected the fair hearing complaint for the same reasons and ordered B.C. to pay the costs.
The court marked one limit. Proportionality would fail if all of a person's assets stayed frozen without any real review, in criminal proceedings not conducted with due speed. It found that was not this case.
Why it matters
Under the law before Act VI of 2024, a lawyer for a person charged with money laundering should not ask the magistrate to confine a freeze to the proceeds. A request for revocation belongs before the Criminal Court within three working days. The court held that once that deadline passes, the order can only be varied, not removed.
Where it sits
A freezing order is a control of the use of property under the second paragraph of article 1 of the First Protocol, not a deprivation of it. The test is legality, a legitimate aim and a fair balance secured by procedural safeguards.
The court relied on the European Court of Human Rights (27 June 2017), which treated a seizure pending confiscation as a control of use serving the fight against money laundering. It relied on the Constitutional Court (20 January 2025) and (26 February 2024), which found the general freeze under Chapter 373 proportionate because the court may vary it.
It also cited the Constitutional Court (23 June 2025), which held that the existence of such remedies answers a complaint of disproportion. On the right of the accused to seek review before the Criminal Court, it cited the Criminal Court (30 June 2021).
Source
First Hall of the Civil Court (Constitutional Jurisdiction), 23 March 2026, 570/2022