Issue link: https://maltatoday.uberflip.com/i/1518643
12 maltatoday | SUNDAY • 7 APRIL 2024 LETTERS & LAW Letters to the Editor Law Report Clarification: Speaker's office has nothing to do with Victory Day celebrations REFERENCE is made to the article Who Is Myriam Spiteri Debono, The Former Speaker Set To Become The Next Presi- dent? (MaltaToday, 31 March) in which it was said that Notary Spiteri Debono's speech delivered during the commem- oration of Victory Day in 2021 was "not disseminated by the Department of In- formation or the Office of the Speaker". I want to clarify that the events sur- rounding the Victory Day celebrations are not organised by the Maltese par- liament and at no point was there any interference whatsoever by the Speaker of the House as to whether the speech delivered by Notary Spiteri Debono in the official ceremony should be dissemi- nated or not. Pierre Mallia Director Maltese Parliament Valletta Dangerous Vjal Kottoner WHEN will the section of Vjal Kottoner in Fgura between Chain Supermarket and the roundabout near Triq il-Foss be reconstructed? This road literally resembles the moon. The bumps along the whole length of the road are not simply an inconvenience but are also dangerous for motorists driving through the area. D. Camilleri Fgura Escalating Ukraine war far scarier than talking to Putin IT was refreshing to read the interview with Carm Mifsud Bonnici (MaltaToday, 31 March) and his views on the prevail- ing winds in the EU that are clamouring for more defence spending. Like Mifsud Bonnici, I also feel that European leaders are fanning the flames of war through their rhetoric on defence. It is as if the EU has resigned itself to the inevitable. While the Russian invasion of Ukraine is wrong and of serious concern, I still believe the EU should engage with Vladimir Putin rather than antagonise hime. I do not condone his despicable actions but at the end of the day, the best solu- tions are reached through negotiation. I may be naïve but the risk of escalating the war in Ukraine into a continental conflict is far scarier than sitting down with the enemy to try and defuse the situation. This is especially so for Malta, a small country that poses no threat to anyone. G. Debattista St Venera BANKS are expected to give reasons why they are asking for documents when they are carrying out a due diligence on a cus- tomer. This was held in a judgment deliv- ered by the Court of Appeal on 3 April 2024 in Ignazio Licari vs Bank of Valletta plc. The Court was presided over by Mr Justice Law- rence Mintoff. The appeal was lodged by Mr Justice Igna- zio Licari from a decision given by the Ar- biter for Financial Services. In his decision the Arbiter agreed with the Bank that closed Licari's accounts. The Arbiter did however, give some recommendation. The Arbiter asked whether the Bank would consider opening a bank account for Licari, if the latter passes on his income tax return. This was done in the spirit that elderly people may not appreciate that the reality of today is different from that of the past. The case was instituted after Licari re- ceived a letter from the bank in February 2022 informing him that his accounts were to be closed and he had two months to make other arrangements. If this did not happen the bank would close the account, all the same and send a cheque with the balance in the account. Licari filed a complaint and held that he was suffering damages. He asked the Arbiter to declare that the bank's decision to close the account was abusive and unnecessary and to order the bank to re-open the ac- count. The Bank argued that Licari failed to give information which dealt with certain ac- counts and he failed to give his income tax return in order to verify the transactions he was carrying out. The bank chased Licari for him to pass on the income tax return. The Arbiter in his decision, held that in another case he had listed the elements of a banking relationship. This includes fairness, equity and reasonableness. These elements may be found in the Arbiter for Financial Services Act. The Arbiter explained that in the past consumers made use of cash, then used cheques. Today the banking world has been transformed totally. Today banks are asking clients to use digital means of payment, such as credit and debit cards or online payments. Therefore, a bank account is necessary and as a consequence the closing of the account should be the last measure used by the bank. Banks must carry out due diligence exercises on their clients. These must be proportion- ate and must be tailored to the client and not "one size fits all". In this particular case, the parties had a long-standing commercial relationship. The account was a complicated account and needed an enhanced due diligence. Licari had a number of accounts, some his person- al accounts some were used as a liquidator and passed on substantial amounts of mon- ey, which were not his personal income and therefore not taxable. Licari was of a certain age. When he gave the bank his source of wealth there were some discrepancies. The Arbiter interpreted this as a confusion of what was actually required. Licari refused to hand his income tax return and the Arbiter held that his is unacceptable. This is derived from Licari's lack of understanding of the bank's obligation to make sure that there is no money laundering. The bank gave a number of opportunities to Licari to fulfil his obligations and pass on the income tax return. The Arbiter held that it is essential that there is co-operation with the bank for it to fulfil its obligations. Since Licari is still refusing to pass on his income tax return, then the bank's decision to terminate its re- lationship with his is justified. Licari appealed this decision on the ground that he did not receive a fair hearing and the Arbiter was not impartial and that the Ar- biter misinterpreted the law. The Court of Appeal disagreed with the first ground of appeal, since the minutes of the proceedings show that Licari was able to argue his case and make written submissions. The Court of Appeal held also that it was not compe- tent to see whether Licari received a fair hearing. This is the competence of the con- stitutional courts. Licari further explained that he had given the bank a number of documents it request- ed and after he presented these documents, the bank requested further information including his income tax return, without explaining why this is needed. Therefore, according to Licari the fact that the Arbi- ter held that the bank had regulatory obli- gations was irrelevant. This is because the bank had all the information it required. According to Licari, the bank just wanted to close the accounts. The Court of Appeal pointed out that the documents requested from Licari were not listed in the form called Declaration of Source of Funds, although they may have been requested if the need arises. The Court held that the bank requested the income tax return without specifying what was the need and what doubt did they have. The bank's customer has a right to know why it is asking for this information. The Court of Appeal held that the issue between the bank and its customer could have been easily settled, if the bank had given clarifications. Further- more, it seems that the bank may have asked for more information even if the income tax return was provided. The Court considered the age of Licari, who would not appreciate the complexities of the regulatory systems that exist today. Furthermore, the requests were made dur- ing COVID, where elderly people were ad- vised not to go out. It was shown also that Licari had also some medical issues. Therefore, some more ex- planation from the bank would have been advisable. There was no suspicion of money laundering in this case. The Court disagreed with the Arbiter, who said that Licari did not give in his income tax return was unacceptable. As mentioned the Court held that the bank was responsible for a lack of clarity and the bank could have asked for other documents in order to carry out its verifications. As to damages, Licari held that this in- cident was a trauma and he fell into a de- pression and that he was taking medicine. He had no account and could not even re- ceive his pension. The Court acknowledged the difficulties Licari found himself in and awarded him €500 in damages. The Court of Appeal also ordered that the account be reopened. Banks must explain to clients why they want certain documents LAW REPORT MALCOLM MIFSUD Mifsud & Mifsud Advocates