Month: November 2019

25 Nov 2019

Redemption of land belonging to the Government or to the Lands Authority under a title of revisable Perpetual emphyteusis Regulations, 2019 (the “Regulations”)

By virtue of Legal Notice 216 of 2019 the legislation provides for the redemption of land belonging to the Government/Lands Authority which is held under a revisable perpetual empytheusis. 

Any person who holds such property may request the Lands Authority to redeem that property any time.  Yet, the said redemption should not terminate the conditions of the original perpetual emphyteutical deed.

The eligibility criteria are the following:

  1. The applicant must be a citizen of the European Union;
  2. The applicant should be recognised by the Lands Authority as an emphyteuta of the property or have submitted an application to be recognised as such and is still awaiting such recognition.  The application process cannot start prior to recognition of the applicant by the Lands Authority; and
  3. Should prove that there are no arrears due to the Lands Authority of ground rent payment on the property for which the application is being submitted.

The emphyteuta of the property under a title of perpetual and revisable emphyteusis belonging to the Government or to the Lands Authority has the option to redeem the groundrent as provided in these Regulations, unless the deed itself provides differently as to how the redemption may be effected.

The Regulations stipulate also the criteria for the value of the redemption of the property and the documents required to be submitted with the application for redemption, together with a sworn statement that the entire content of the application is truthful and that no information has been omitted.   

Any redemption deed is subject to the Board of Governors’ approval and will be subject to such conditions imposed by the said Board of Governors.  The redemption should be effected by a public deed.

This legal notice contains also transitory provisions with respect to any request for redemption of perpetual and revisable ground rent of property belonging to the Government or to the Lands Authority before the entry into force of these Regulations, which requests will be examined and decided according to these Regulations.

20 Nov 2019

Court awards over €6,000 in damages for an accident at work

Josette Camilleri vs The Malta Union Club et[1]

The Facts

In a recently decided case ‘Josette Camilleri vs The Malta Union Club et’, the First Hall of the Civil Court (the “Court”) heard the pleadings regarding a workplace accident which left Josette Camilleri suffering from a permanent disability comprising various physical functional limitations.  At the time of the accident, Camilleri was employed as a waitress at a cafeteria establishment in the employ of Vira Gatt Butto (“Butto” or the “Employer”).   The bar was not owned by the Employer but had been conceded to the said Employer by a third party The Malta Union Club (the “Club”).  In instituting a case for damages, Camilleri opted to only sue the Club, arguing that the damages were caused by its negligence, lack of skill and failure to observe the regulations.  The accident consisted of Camilleri slipping over some water spilled on the floor. 


The Outcome

By means of a preliminary plea, the Club insisted that since it was not Camilleri’s employer, it follows that it was not the proper defendant to the case.  At the outset, following Butto being called into the suit, the Court’s first legal issue to be decided upon was whether the Club was the proper defendant. 

While the accident took place inside the Club’s property, the defendant Club had not, in any manner, been involved in the management and running of the bar.  This had been the exclusive responsibility of the Employer and on this basis the Court determined that in this respect, there was no cause of causality between the defendant Club and the ensuing accident. Furthermore, there were no structural defects in the building which could have led to Camilleri’s accident.  The Court held that the Club was not the legitimate defendant and that the Employer was the proper defendant as she was the person responsible for the running of the bar, and the recruitment of employees.

Following this determination, the Court moved on to analysing whether Butto had breached any statutory employers’ obligations.  Butto was deemed to have breached article 6 of Chapter 424 of the Laws of Malta for failing to have ensured the health and safety of its employee on the grounds of having an insufficient number of employees to deal with work exigencies.  The amount of €6,560.64 was awarded to the plaintiff by way of damages for loss of future earnings. No proof of any material damages had been submitted.  The case is subject to appeal.

The GMX Commentary

Failure to file a case against the proper defendant may risk having the case dismissed, requiring a party to start proceedings anew unless the proper defendant is called into the suit.  In this case the Court opted for the latter option, calling in the plaintiff’s employer into the suit.  In its deliberations it seems that the court focused primarily on (i) the involvement or otherwise of the third party in the running of the place where the accident took place; and (ii) whether there were any damages or structural defects in the building which could have led to the accident in question (given that the third party was the owner of the building).          

The court analysed the first above mentioned condition in light of the definition of ‘employer’ in the ‘Occupational Health and Safety Authority Act’ (Chapter 424 of the Laws of Malta).  In terms of the said definition, the role of an employer may not be strictly limited to the traditional concept of “any person for whom work or service is performed by a worker or who has an employment relationship with a worker” but may also be extended to include owners on behalf of whom work is being carried out and with respect to any defects in any tools, materials or equipment as may have been provided by them.

The Court also subsequently had to determine whether the employer had failed to ensure and safeguard the health and safety of the employee in terms of article 6 of Chapter 424 of the Laws of Malta.  The Court deliberated that a sole employee could not be expected to keep up with such a work place’s exigencies, concluding that a link of causality subsists between the spilled water on the floor and the failure in employing a sufficient number of employees. 

In light of this judgment, a careful consideration of the work tasks and the allocation of the same become all the more crucial.  Having overworked employees may entail a finding of responsibility due to a lack of preventive measures aimed towards reducing occupational health and safety risks.    

[1] Decided on 1st November 2019.

19 Nov 2019

The 5AMLD: What changes to expect

The fight against money laundering and terrorist financing in the EU financial market has spurred on the drafting of the fifth Anti-Money Laundering directive (“5AMLD”)[1] to eradicate the risk of having a repeat of such scandals and leaks in the future.  The 5AMLD will reinforce what the fourth Anti-Money Laundering Directive (“4AMLD”)[2] had achieved, and will serve to ensure increased transparency, public scrutiny and accountability.

What changes will the 5AMLD introduce?

Changes introduced by the 5AMLD should include:

Widened scope of AML/CFT regime

The 5AMLD has substantially increased the number of entities which must comply with anti-money laundering/combating the financing of terrorism (“AML/CFT”) legislation.  The obliged entities now include:

  • Persons providing aid, assistance or advice on tax matters as principal business or professional activity;
  • Real estate agents when acting as intermediaries in the letting of immovable property having a minimum monthly rent of ten thousand euros,
  • Providers engaged in exchange services between virtual currencies and fiat currencies and custodian wallet providers; and
  • Persons trading in works of art. 

Increased transparency on real owners

Beneficial ownership information on legal entities (such as companies) will be available to the public.  While this measure may be perceived as bringing more transparency in the corporate and the financial sectors, discussions and argumentation against such a drastic measure viz a viz a person’s personal data will, in all probability, abound.  In terms of the 4AMLD, information on beneficial owners was available provided that the person or organisation seeking to obtain such information “[could] demonstrate a legitimate interest”.  This had led to different interpretations as to what constitutes a legitimate interest which had in turn resulted in varying degrees of accessibility across the EU member states. 

The issue of diverging and potentially conflicting interpretations of the concept of legitimate interest cannot be said to be have been completely done away with in the 5AMLD since the same directive provides that beneficial ownership information on trusts (previously undisclosed to the general public) will now be available upon the demonstration of legitimate interest.  Although the 5AMLD does not provide a uniform definition of legitimate interest, it dictates that the said concept is to be defined by the law of a member state. 

Harmonised treatment of high-risk third countries

Business relationships and transactions involving high-risk third countries (as identified by the Commission) will be are now obliged to apply enhanced due diligence (“EDD”) measures as specified in the 5AMLD.  Harmonised EDD measures should include:

  • the acquisition of additional information on the customer (and the beneficial owner if applicable) and their respective source of funds and source of wealth;
  • the acquisition of additional information on the intended nature of the business relationship;
  • the acquisition of information on the reasons for an intended or performed transaction.

Senior management approval should also be obtained prior to establishing (or continuing) a business relationship.  The paramount importance of enhanced monitoring of the relationship is to be coupled with a selection of patterns of transactions for further examination.  The implementation of the above-mentioned measures does not exclude that additional mitigating measures may also be required.

Clarity on Politically Exposed Persons (“PEPs”)

The 5AMLD requires each member state to indicate which functions are considered as prominent public functions.  Persons performing such functions should be considered and treated as PEPs for AML/CFT purposes.  By moving away from an indicative to an exhaustive list as to what prominent functions render a person a PEP, obliged entities will benefit from an additional degree of legal certainty when considering customer risk. 

Additional means of verification

In light of prevalent technological advancements, the 5AMLD recognises that obliged entities may now accept electronic identification means or any electronic identification process accepted by national authorities.  Electronic identification is “the process of using person identification data in electronic form uniquely representing [a person]”[3]. 

Increased cooperation between national authorities

The 5AMLD aims to increase the cooperation and the exchange of information between competent national authorities across different member states.  A register of all competent AML/CFT authorities as well as their contact details should be published on the Commission’s website, easing competent authorities’ contact with foreign counterparts.  The interconnection of national central registers holding beneficial ownership information will also assist and strengthen national authorities.   

When will the 5AMLD come into force?

The 5AMLD entered into force on 9 July 2018 and will have to be implemented by EU member states by 10 January 2020.  On 14 October 2019 the Financial Analysis Intelligence Unit (the “FIAU”), which is the Maltese competent authority dealing with AML/CFT, issued a consultation document containing a draft transposition of the 5AMLD provisions to the Prevention of Money Laundering and Funding of Terrorism Regulations[4].  Now that the deadline of the consultation period set on the 5 November 2019 has passed, the FIAU should be embarking on transposing the provisions into the said national legislation.

To conclude, the 5AMLD takes anti-money laundering legislation to the next level.

[1] DIRECTIVE (EU) 2018/843 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU

[2] DIRECTIVE (EU) 2015/849 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC

[3] REGULATION (EU) No 910/2014 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC

[4] Subsidiary legislation 373.01 of the Laws of Malta.

6 Nov 2019

Entry into force of the Malta-Kosovo Double Tax Treaty

By means of Legal Notice 280/2019 published on 5 November 2019, the convention between the Government of the Republic of Malta and the Government of the Republic of Kosovo for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to taxes on income entered into force on 20 September 2019.  The Double Tax Treaty was signed on 6 March 2019 and was published in the Government Gazette of Malta on 23 July 2019, by means of the Legal Notice 168/2019. Malta has a vast network of double tax treaties both with important trading countries and emerging economies in order to encourage the growth of international trade. Malta’s double tax treaties are modelled on the OECD’s Model Tax Convention on Income and on Capital, and attempt to eliminate or reduce double taxation.

6 Nov 2019

Contradicting rulings or an astute strategy to expand territorial scope of EU digital rights?

Google v CNIL (C-507/17) and Glawischnig-Piesczek v Facebook (C-18/18)

The General Data Protection Regulation (GDPR) is widely said to have exported the legislation of the European Union (EU) worldwide since it also applies (in certain instances) to controllers and processors of data which are established outside of the EU. Yet, in a preliminary ruling of the 24th of September the European Court of Justice (ECJ) ruled that Article 17 of the GDPR, which provides for the right to be forgotten, is only required to be applied in the EU internally and not worldwide (Case C-507/17 Google v Commission nationale de l’informatique et des libertés). That ruling was prompted by a fine imposed by the French data protection authority on Google because of that company’s refusal, when granting a de-referencing request, pursuant to the right to be forgotten, to apply it to all its search engine’s domain name extensions.

In another preliminary ruling of the 3rd of October, regarding Directive 2000/31/EC on electronic commerce (E-Commerce Directive) the ECJ seems to have reached the conclusion that measures granted by national courts to block access to or to remove illegal content online, in terms of Article 18 of the E-Commerce Directive, may be applied worldwide (Case C-18/18 Glawischnig-Piesczek v Facebook Ireland). In this case, an Austrian politician sought an order that Facebook remove and stop disseminating content (and identical or, subject to certain conditions, equivalent content) which was found to be defamatory, and thus illegal, by an Austrian court.

How come the E-Commerce Directive grants a worldwide remedy but the GDPR grants only an EU-wide remedy; and this decided upon by the ECJ in the space of just a few days? In truth, there is much more to be read into with respect to both preliminary rulings.


The ECJ’s consistent reasoning

In both cases the ECJ begins its reasoning by reading into the E-Commerce Directive and the GDPR, respectively, the wish of the EU legislature to strike a balance between the interests at stake (para 43 of the Facebook case and para 60 of the Google case). In the Facebook case the interest of the person seeking to have defamatory content taken down is balanced against the difficulty of the host provider to comply with a measure in respect of the E-Commerce Directive. In the Google case the interest of the person seeking to take down content infringing his data protection rights is balanced against the right to freedom of information which evidently is adversely affected by a de-referencing order in respect of the GDPR.   

In the Google case the ECJ reasons that while EU legislature has struck a balance between the right to privacy and the right to freedom of information (see Article 17(3)(a) of the GDPR) as regards the application of the right to be forgotten within the EU, it has not struck such a balance as regards application outside the EU territory (para 61). This is because the rights arise from the EU Charter of Fundamental Rights. As a result, that balancing exercise inhabits a purely EU legal order and is necessarily an exercise in EU law which cannot be exported outside its territory to other regions of the world where the balance of the two rights at stake may vary significantly. The ECJ further holds that nowhere does the GDPR indicate that any of its provision should apply outside of the territory of the EU, therefore, it is only required to be given effect to within the territory of the EU (para 62 and 63).

However, this is not the end of it. The ECJ continues to argue that neither does the GDPR expressly prohibit its application worldwide (para 72). Therefore, the national data protection authorities and the national courts may decide to apply the de-referencing pursuant to the right to be forgotten worldwide but, given what has been said about the EU Charter, the balance should be struck in the light of national standards of protection of fundamental rights (para 72).

In the Facebook case the ECJ simply states the balance of the individual’s and the host provider’s interests must mean that the host provider cannot be burdened with an excessive obligation, that is, a host provider cannot be obliged to generally monitor for illegal activity (para 43). In fact the Member States are expressly prohibited from imposing such a general obligation by Article 15 of the E-Commerce Directive; therefore, a balance struck in this sense is purely made in terms of EU legislation and, by implication, cannot be applied to measure which have effect worldwide.

Yet, the ECJ rests on Recital 58 of the E-Commerce Directive which states that “in view of the global dimension of electronic commerce, it is, however, appropriate to ensure that the Community rules are consistent with international rules; this Directive is without prejudice to the results of discussions within international organisations (amongst others WTO, the OECD, Uncitral) on legal issues” to allow the application of measures worldwide made on a balance of interests made in terms of international rules to which the Member States subscribe. The ECJ further posits that nowhere does the E-Commerce Directive make any territorial limitation to the application of the measures permitted under Article 18, therefore, those measures may be given worldwide effect (para 49 and 50). Nevertheless, in the case that a Member State applies a measure with worldwide effect it must do so in a manner consistent with the framework of the relevant international law (para 51).

Conclusion: a converging territorial scope

Contrary to first impressions, the effect of the two cases is the convergence of the territorial scope of the GDPR and the E-Commerce Directive. That is, they can apply within the EU territory but also with global effect provided that a balance must then be struck between the interests at stake, in the case of the GDPR, in terms of national standards of protection of fundamental rights, and, in the case of the E-Commerce Directive, in terms of international law. Even this difference between striking a balance in terms of national standards and international law, respectively, seems superficial.

National standards for human rights protection necessarily derives from international law be it in the form of binding treaties like the European Convention on Human Rights, or soft law made in the fora of the United Nations or of regional organisations or their affiliated agencies and bodies, or even general principles. The ECJ clearly adopts a single strategy as to the territorial scope of EU rules in relation to online activity. That is, prudently deferring to apply EU law as such outside of the EU territory while leaving the Member States free to apply deriving or analogous rules worldwide.