Although
constantly evolving, in more recent years, the role of the Company Secretary
has undergone a significant shift both in the way it is perceived externally
and also in its actual fulfilment within an organisation. Whereas historically
defined rather restrictively as mainly administrative in nature, the Company
Secretary is now expected to fulfil a much broader brief. This change has
mostly come about as a result of the need for a more effective corporate
governance framework which promotes increased transparency and accountability
within the organisation. In the wake of corporate scandals the likes of
Maxwell, Enron and Polly Peck spanning over the last few decades, many changes
have been brought about in the corporate field across different jurisdictions.
The actual
requirements for the appointment of a
Company Secretary within an organisation’s set up vary between
jurisdictions. In the United Kingdom,
all public companies are obliged to appoint a Company Secretary. In the case of
private companies however, by virtue of the 2008 amendments to the Companies
Act, this requirement was dispensed with; unless the company’s Articles of
Association specifically retain or impose this requirement. The rationale
behind this was seemingly to relieve the burden on some of the smaller private
companies. Albeit, more than a decade after these amendments, although no
longer mandated by legislation, many UK private companies still make this
appointment; surely a tacit testament to the underlying criticality of this
role.
On the contrary,
the Maltese Companies Act imposes the appointment of a Company Secretary on
both public and private companies without distinction[1].
Presumably, this stance is rooted in tradition since this perspective has not
shifted since the enactment of the Maltese legislation in 1995. There are no
further specific requirements except that the directors should ensure that the
person appointed is competent to discharge the functions of this role.
What is certain
is that regardless of the legislative
requirements surrounding this role in any given jurisdiction, the contemporary
Company Secretary is viewed as a governance linchpin within an organisation.
The role which was not that long ago
termed a ‘glorified clerk’ is now perceived as ‘the guardian of the
company’s proper compliance with both the law and best practice’ and ‘a
critical conduit’ for the promotion of communication between the board and the
organisation itself.
For this reason,
it is becoming progressively important to have someone specialised fulfil this
role. Although it is a fact that no one single model of corporate governance
can apply to all companies given the fluidity
of the respective requirements of any given organisation, in most
companies it has become increasingly common to combine roles, more often with
that of General Counsel. This
ensures that the Company Secretary is
vested with sufficient authority to carry out the functions expected of this
office and to ensure that the organisation and its directors operate within the
law. This also allows for the upholding of certain principles which lie at the
heart of a strong corporate governance framework such as discretion,
independence of judgment, diplomacy and the delivery of organisational
objectives in a legal and ethical framework.
In this way the Company Secretary can add real value to the organisation
through the combination of a strategic understanding of the company’s affairs
together with a much desired knowledge of legal and governance issues.
For further information and/or clarification regarding professional Company Secretarial and support services please contact Gauci-Maistre Xynou (Legal| Assurance) or visit our website http://gmxlaw.com
Ever since the creation of Bitcoin, cryptocurrencies have been
applauded and welcomed for constituting an innovative method of payment without
any recourse to financial institutions and their entailing bureaucracy. While honest individuals rejoiced at
cryptocurrencies’ legitimate benefits; ranging from an increased degree of
privacy and confidentiality to less transactional costs, cybercriminals saluted
the decentralised networks and perceived anonymity behind cryptocurrencies for presenting
them with the perfect crypto cleansing opportunity to launder money in an
unprecedented and largely unregulated sector in the financial industry.
Regulating cryptocurrencies and bringing them within the scope of anti-money
laundering/counter terrorism financing (AML/CFT) regulation is on the agenda of
regulatory authorities as wrongdoers are increasingly resorting to utilising
cryptocurrencies in their operations[1]. In fact, according to a recent report, in the
first three quarters of 2018, the amount of cryptocurrencies stolen when
compared to the cryptocurrencies stolen in all of 2017 increased by more than
double.[2] Furthermore, it has been observed that in
2018, 97% of criminal bitcoin payment received by leading cryptocurrency
exchanges flowed into countries with weak anti-money laundering regulation[3];
hence the need for regulation becomes even more pertinent.
Regulating a payment method originally intended to bypass any Big
Brother surveillance comes as no easy task, particularly in light of the following
key challenges shrouding cryptocurrencies:
Anonymity/Pseudonymity: the pseudonymous nature
of cryptocurrencies place the regulation of cryptocurrencies in direct conflict
with due diligence and any Know Your Customer (‘KYC’) obligations since tumblers/mixers
serve to provide users with a good degree of anonymity.
Cross-border nature: blockchain networks are not
limited by jurisdictional borders, hence rendering any local regulation almost
futile.
Lack of a central intermediary: decentralised
public blockchains lack having a third party responsible for the adherence of
AML/CFT regulation.
European institutions and regulatory authorities across the board are
considering possible means to effectively regulate cryptocurrencies. This may necessitate a number of courses of
action, which particularly include: improving and strengthening regulation;
implementing efficient transaction monitoring capable of identifying
money-laundering patterns; and placing third-party ID providers under state
supervision[4].
In its 2019 report, the European Banking Authority (EBA) advised the
European Commission to take the latest recommendations issued by the Financial
Action Task Force (FATF) into consideration[5]. Apart from defining virtual assets and
virtual asset service providers, the latest 2018 updates to the FATF
Recommendations[6], advise
countries and financial institutions alike to identify and assess the money
laundering or terrorist financing risks posed by new technologies, hence
catering not only for virtual assets, but for any other technologies still in
their infancy.
On a European level, a considerable milestone has been achieved by
virtue of the fifth Anti-Money Laundering Directive (“5AMLD”) for
adding providers engaged in exchange services between virtual currencies and
fiat currencies, and custodian wallet providers to the list of obliged
entities. While being a major step in
addressing the need to regulate cryptocurrencies, considerable blind spots are ultimately
still blatantly visible as a number of key players within the crypto market
still go unregulated. Hardware and
software wallet providers, coin offerors and users resorting to peer-to-peer
transactions are just a few examples.
The 5AMLD is to be transposed by 10 January 2020, with the first report
of the Commission on the implementation of the said directive to be drawn up by
11 January 2022. Meanwhile, a rather
free-for-all situation persists.
In addition to being at the forefront in recognising the need to
regulate cryptocurrencies, Malta has actually gone beyond the requirements of
the 5AMLD. Through the enactment of the
Virtual Financial Assets Act (the “VFA Act”) back in November 2018, VFA issuers
as well as all VFA service providers are deemed to be subject persons. Furthermore, the creation of the role of the
Virtual Financial Asset Agent (the “VFA Agent”) is particularly significant
from an anti-money laundering perspective. This is because it is intended to serve
as the first buffer to ensure that only fit and proper VFA issuers and VFA
service providers are able to respectively register a whitepaper and to be
licensed.
The Prevention of Money-Laundering and Funding of Terrorism
Regulations (the “Regulations”) have been amended to expressly bring all three
VFA operators (VFA agents, VFA issuers and VFA service providers) within its
scope. The Financial Institutions
Analysis Unit (the “FIAU”) has issued a consultation document on the
‘Application of Anti-Money Laundering and Countering the Funding of Terrorism
Obligations to the Virtual Financial Assets Sector’ which are intended to act
as sector specific guidance to VFA operators in addition to the general Implementing
Procedures – Part 1.
In what has been
perceived as being rather encompassing, in addition to catering for ML/FT
risks, the VFA framework (comprised essentially of the VFA Act, the Malta
Digital Innovation Authority Act, and the Innovative Technology Arrangements
and Services Act), the Maltese regulator also provides for cyber risk as well
as investor protection and transparency risk.
In conclusion, national
legislation accompanied by comprehensive European AML/CFT framework
regulating all crypto key players, while desired, is far from being the be-all
and end-all since the borderless
nature of cryptocurrencies, makes any national and European regulation rather
ineffective and insufficient. It is high
time that international cooperation is resorted to.
[1] David
Carlisle, ‘Virtual Currencies and Financial Crime – Challenges and
Opportunities’(2017)
[4] F
Balsiger and P Sprenger, ‘Anti-Money Laundering in times of cryptocurrencies’(2018)
[5] European
Banking Authority, ‘Report with advice for the European Commission on
crypto-assets’ (2019)
[6]
FATF (2012-2018), International Standards on Combating Money Laundering and the
Financing of Terrorism & Proliferation, FATF, Paris, France,
www.fatf-gafi.org/recommendations.html
We
are currently looking for a Junior Accounts Associate to join our dynamic
accounting team. The chosen candidate will support the finance department with
managing daily accounting tasks and report directly to the CFO.
Responsibilities:
Bookkeeping
& bank reconciliations;
Creditor
control;
Preparation
of invoices and credit notes;
Maintenance
of accounts ledgers;
Assistance
in the preparation of VAT returns;
Other
accounting-related duties.
Requirements
Excellent organizational skills
Ability to work comfortably with numbers
Attention to detail
Good understanding of accounting and financial
reporting principles and practices
Knowledge of MS Office
Good verbal and written skills in English and
Maltese
Confident communicator
MCAST AAT Diploma in Accounting or equivalent
A level accounts and / or one year related
experience would be an asset.
To apply:
Interested candidates are to apply by sending
their CV together with a cover letter to HR Manager Yeda Spiteri Thomas: hr@gmint.com, quoting in the
subject field “Junior Accounts Associate”
Malta is among the 18 EU member states where new EU
Regulations clarifying the rules applicable to property regimes for
international married couples or registered partnerships, entered into force on
29 January 2019.
The regulations, covering the management and distribution of
joint property such as bank accounts in the event of death, separation or
divorce, are projected to provide increased legal clarity for cross-border couples.
As the full 28 EU Member States could not reach an agreement on clarifying
property regimes for international couples, the rules will apply – at least
initially – in the following 18 states which approved them: Austria, Belgium,
Bulgaria, Croatia, Cyprus, Czech Republic, Finland, France, Germany, Greece,
Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, Spain and
Sweden.
The 18 Member States that joined the enhanced
cooperation make up 70% of the EU population and represent the majority of
international couples who live in the European Union. The non-participating
Member States will continue applying their national law (including their rules
on private international law) to cross-border situations relating to
matrimonial property. These will still retain
however the option to join the regulations at any time. (Article 331 TFEU).
Commissioners Frans Timmermans welcomed the entry
into force stating,
“The entry into application of these regulations is good news for the growing number of
international couples in Europe. This is about giving certainty to thousands of
European couples about what happens to their property if they divorce or one of
them dies. I am confident that these regulations will help many European couples
manage such difficult times,”
Justice Commissioner Jourova added,
“These new rules will make it easier and cheaper
to divide joint assets and provide some relief to people in difficult
circumstances. More than 16 million international couples will benefit
from clear procedures in case of divorce or death of a partner. They will be
able to save around €350 million each year in legal costs. I encourage the
remaining Member States to join the enhanced cooperation for the sake of all
international couples across the EU.”
After
months of conjecture about GDPR implementation, French regulators handed Google
a EUR 50 million fine for failing to properly obtain valid user consent to
gather data used for targeted advertising. The first substantial GDPR fine
raises many questions for businesses, big and small. Let’s consider some of the
implications.
GDPR
Violation
France’s
National Data Protection Commission (CNIL) identified Google’s handling of
personal data as follows:
Google violated rules requiring information about data collection
to be transparent. Full information on data-processing purposes and
data-storage times were not all presented in the same place. CNIL appears
to have weighed heavily the fact that Google contains vast amounts of data
about individuals, stating: “the infringements observed deprive
the users of essential guarantees regarding processing operations that can
reveal important parts of their private life since they are based on a
huge amount of data, a wide variety of services and almost unlimited
possible combinations.”
Boxes giving consent to certain data-processing practices were
pre-checked- a direct violation of the GDPR.
These failings led CNIL to conclude that Google had miscarried processes to obtain appropriate consent from users for serving personalized ads. The investigation into Google’s privacy practices started on May 25th, 2018, the day the GDPR entered into force after two groups of privacy activists filed complaints against Google. In response to the fine, Google is studying the verdict to determine the next steps.
Google
confirmed that the fine will be appealed.
Implications
of the GDPR Fine
The
EUR 50 million fine only represents roughly 0.05% of Google’s USD 110.8 billion
revenue. This is a far cry from the maximum fine of 4% global revenue that
could have been imposed. While still a relatively small percentage, the fine is
by far the biggest amount imposed by any national regulator since the entry
into force of the new law. Moreover, it represents the opening for a possible
wave of enforcement actions and pursuit by regulators to other tech companies
for similar practices.
The
action also makes it clear that practices that were once considered “good
enough” prior to the introduction of the GDPR are no longer legal. In order for
big data to be legal under the GDPR, companies need to ensure the
following factors:
(a)
the secondary processing must be compatible with the original purpose for which
the data was collected,
(b)
use only the minimum amount of data necessary for the purpose for which it is
processed; ( known as data minimisation )
(c)
satisfying the balance of interest test.
This
GDPR enforcement action against Google makes it clear that companies need to be
explicit towards users about how and for which purposes their data is being
processed. Anticipate scrutiny towards big data practices to increase.
Despite
the fact that Google allows users to modify their privacy settings when they
create an account, CNIL faulted the company for serving users personalized ads
as the default setting. The move suggests a strict attitude towards consent.
Moving
Forward
The interesting question is how other DPA’s will react to this decision and the pressure on Google to change its practices. While the fine levied may be nothing more than a drop in the ocean for Google, the potential changes the technology giant will be forced to make to its data-processing practices in the European Union could fundamentally call into question all similar business models.
Picture the scene. An autonomous truck fully loaded with
goods leaving the warehouse and arriving without a hitch at its destination
almost 200 km away.
The stuff of a millennial James Bond movie? The latest
commercial going viral? No, this is October 2016 when a self-driving
semi-trailer heaped with Budweiser wheeled its way across the 1-25 from Fort
Collins, Colorado through Denver to Colorado Springs. Surely a few beers must have high fived to celebrate
the world’s first driverless commercial shipment.
Fifteen months down the line, Artificial Intelligence (AI)
combined with Blockchain is hogging the headlines giving us awesome glimpses of
what today’s digital world is achieving and promising even more tantalising
future scenarios. Autonomous shipping
may be a few decades away but is already racing pulses. Pilot projects in the
maritime world are already manifesting the benefits – and challenges – of utilising
Internet of Things (IoT) and adopting Blockchain to improve port logistics and
develop digital ports. What is at play and at stake here is even more
mind-boggling than land travel since shipping is one of the most intricate and
ever-morphing businesses in the world.
Just homing in on the complexity of port logistics raises
the curtain on manufacturers/suppliers, buyers, container terminals, carriers,
freight forwarders, ship agents, bunkering, insurance, non-standardised
regulations, customs, banks, hinterland transportation and various other
stakeholders involved in the supply chain. Today’s supply chains are demanding
a faster, cheaper and more secure flow of goods that need to go well beyond the
digitalization gained by the Port Community System. While the latter has been a
milestone, a mountain of documentation, time delays, a lack of trust as well as
of interconnectivity are still major hurdles.
Enter Blockchain and data processing, validating, securing
and accessing each event at the click of a button in real time has become a
reality.
Blockchain provides speed because it provides an
interconnected database which does way with go-betweens and phone calls so that
stakeholders can communicate and track any consignment at any time since the
several transactions that take place in the product’s journey are instantly
recorded. It impacts pivotal hardcopy documents like Bills of Lading and
Letters of Credit which are likely to evolve into a hybrid contract system.
Through Blockchain one can evaluate when and where a certain
product originated, manufactured and used throughout its life cycle in real
time. Blockchain is touted to provide security because it records the history
of transactions via encryption, chronologically evolved hashes which make
errors and fraud more difficult to be perpetrated. While errors and fraud may
become more difficult to occur, legal matters including the determination of
legal responsibility and ownership, jurisdiction and enforcement will become
more complex. Blockchain legislation is
still nascent and it is yet to be resolved whether a Blockchain will be
attributed its own legal personality or whether its distributed nature will
grant participants unlimited liability.
In this respect, it is crucial to distinguish between the
open (“public”) and closed (“permissioned”) options of Blockchain. Although regulating a permissioned Blockchain
may be conceivable, this may prove to be more cumbersome, particularly with
respect to jurisdiction; given the fact that a public Blockchain knows no
jurisdictional boundaries. Traditional
legal means and channels may be inadequate to resolve regulatory issues still
to arise in relation to public Blockchains. This is precisely why hybrid
contracts are bound to be the way forward.
Consequently, hashtag technology cannot totally substitute the human
factor.
As a public-key platform, trust is built on consensus while
promoting a transparent network where all users are the owners. In fact, it is
the partners involved who validate the data. As a private platform, Blockchain
allows access to authorised users but restricts transparency since a central
authority monitors each data entry and transfer. Whether open or closed, the
time and money saved in minimising administrative costs are huge. Moreover,
Blockchain applications are emerging at lightning speed to cater for individual
needs within an interconnected global network of people and things.
For port logistics, this means unprecedented speed,
reliability, security, visibility and integration of data and data processing
capped by real-time access. Blockchain is a trailblazing game changer in
shipping where cargo switches between different transport modes and routes;
essentially creating a digitalised port which in turn enables cross-industry
collaboration and creates countless new business opportunities. Trade finance,
product traceability and process automatization through smart contracts (a
digitally signed, computable agreement between two or more parties) represent
some of the most promising blockchain implementations for supply chains.
It is believed that one of the biggest revolutions that the
blockchain could bring about in the shipping industry is the mainstream use of
smart contracts. The main benefit of a smart contract comes from the increased
speed, efficiency and trust with which the contract will be executed exactly as
agreed when the predetermined condition is met. These advantages can be
incorporated in the shipping industry by creating a smart Bill of Lading.
As in other sectors, the application of smart contracts in the
shipping industry has the potential to cut administrative and operational risks
for all participants in the supply chain including shipowners, charterers and
shipbrokers. Yet such contracts may contain a number of provisions where a
degree of human judgment is needed to determine if certain conditions have been
met or, to determine the best course of action following a breach or default
(lien, laytime, demurrage, notice of arrival, dispute resolution provisions
etc.) Thus, for more sophisticated transactions human judgment may still be
required. Are hybrid smart contracts the answer?
Varying opinions apart, these applications need to be
tailor-made to truly succeed and offer a level playing field. Something which
is not going to happen overnight no matter the hype. For starters, blockchain
platforms are still taking-off wowing and worrying many key players who still
need to grasp how they work and how they can develop. Training of manpower also
demands a tectonic shift whose ripple effect impacts even the very first years
of schooling to prepare for as yet unimaginable new professions that will be
created.
What other challenging factors are impeding a rapid
implementation of Blockchain?
Technical/environmental/cultural/financial limitations, regulatory
issues and special contractual terms (where a degree of human judgment might be
required) readily come to mind. Besides, all are in dire need of governance and
of instilling trust. Indeed for smart contracts to be adopted by the shipping
cluster in all functions of the supply chain a global adoption is a must.
Cybersecurity is yet another serious hurdle. The shipping
industry involves high-value assets; always an added incentive for hackers. And
though underway, offshoot applications are also in their transitional phase
which further slows down both the adoption and localization processes necessary
to ultimately establish an up and running, widespread blockchain ecosystem
which is about to revolutionise the way we interact within and without the
business world.
As far as port logistics go, blockchain platforms and applications are already making their mark. Look at what is happening in Holland, Ukraine, Dubai, China… Despite the steep learning curve and inevitable hiccups along the way, the sway of such an interconnective database on port logistics and the creation of digital ports leaves little doubt that tomorrow’s digitization will have the shipping industry sailing beyond the future.
The General Data Protection Regulation (GDPR) as well as blockchain
technology may both be lauded for having reached evolutionary milestones in
their respective fields of data privacy and innovative technologies. Combining these fields is however giving rise
to unprecedented concerns. Although GDPR and blockchain technology protect
data, ironically data protection compliance is turning out to be significantly
challenging for government agencies and private companies alike when seeking to
make use of hashing technology. It is
pertinent to observe that the GDPR was drafted prior to blockchain’s insurgent impact
in the digital world hence any tensions between the two had not as yet been
envisaged.
The GDPR is concerned with the protection of personal data; this being
“any information relating to an
identified or identifiable natural person (‘data subject’)”. A vast array of information could be deemed
as constituting personal data, as can be evidenced from the broad
interpretation of ‘personal data’ adopted by the European Court of Justice
(“CJEU”) in Case C-582/14 – Patrick Breyer v Bundesrepublik Deutschland. The CJEU held that dynamic IP addresses may
in certain circumstances qualify as personal data.
The use of blockchain with respect to any data which does not fall
within the definition of personal data automatically falls outside the scope of
GDPR. In addition, anonymised data
(whether personal or otherwise) also falls outside the realm of GDPR. Nevertheless, it has been observed that the
threshold for characterising data as being anonymous has been set rather high[1]. In this respect, the encryption of personal
data may not necessarily be sufficient for the said data to constitute
anonymous data. In fact, even hashing
technology is only deemed to render data pseudonymous.[2]
Key challenges being faced by hashing technology in light of mandatory
GDPR compliance (across all industries) include the:
Identification of and distinction between the
data controller and the data processor for accountability purposes;
Consequent
cumbersome issue of enforcing judgments and enforcement actions;
Reconciliation of the immutable nature of a
blockchain with a data subject’s right of erasure.
Such issues are by and large amplified with respect to public,
permissionless blockchains in contrast to private, permissioned blockchains. As a result, data controllers might need to
consider carrying out a data protection impact assessment prior to resorting to
the use of blockchains.
Given the decentralised characteristic of blockchain and the
eradication of the so-called ‘middle man’, the determination of the data
controller immediately becomes problematic, if not impossible. This is
particularly true of public blockchains in light of GDPR defining the data controller as the person,
authority, agency or other body “determin[ing]
the purposes and means of the processing of personal data”, whereas the
data processor, “processes personal data
on behalf of the controller”.
Countless participants on a public blockchain could very easily be
classified as being data controllers, rendering them responsible for GDPR
compliance.
On the other hand, in private blockchains, agreements could cater for
defining each participant’s responsibility, hence clearly identifying the data
controller. In fact, the French National Data Protection Commission (CNIL) recommends the a priori identification of the data
controller, which may be done through the creation of a legal person.[3]
However, any a priori identification
of a data processor is only a mere start in a long road towards GDPR
compliance. Data processing by a
processor must be regulated by a contract or other legal act under EU or Member
State law; a GDPR requirement which may not be easily achieved in the near
future considering the public blockchain networks which are already in
operation. Meanwhile, proponents of blockchain technology would undoubtedly
argue any pre-identification largely demerits the decentralisation aspect and
the much welcomed trustless systems.
Another issue in relation to blockchains concerns the transfer of
public data. In terms of the GDPR a
transfer of personal data to a third country or an international organisation
is legally possible provided that the country or organisation in question
ensures an adequate level of protection.
Such a far-reaching obligation becomes near to impossible given the fact
that blockchains, public blockchains in particular, know no jurisdictional
boundaries. In fact, numerous nodes may
be located worldwide each having a copy of the distributed ledger containing
personal data. Indeed, jurisdiction and enforcement issues are bound to arise
and may be best addressed on a transaction-by-transaction basis.
As pointed out above, another challenging matter stems from the
immutable characteristic of blockchains.
Immutability serves to ensure that data is not tampered with or
deleted. While this feature has been
prominently welcomed in most sectors, most notably in the financial services
sector for securing and rubber-stamping financial transactions, the
immutability characteristic does not secure a subject person’s ‘right to be
forgotten’. In certain circumstances as
provided for in the GDPR, a data subject is entitled to obtain the erasure of
personal data from the controller without undue delay.
In this respect, mechanisms in smart contracts may be used to revoke
or limit access rights.[4] Furthermore, developers worldwide are
striving to come up with innovative solutions; with zero-knowledge proofs (ZKP)
considered as fairly promising in this regard.[5] However, the GDPR does not define what
constitutes ‘erasure’ and it is therefore still to be determined whether such
innovative measures will suffice.
All in all, reconciliations are being tentatively envisaged yet the
issues outlined above, and countless others, remain grey areas in dire need of
clarification. While the reduced costs
associated with blockchain networks are remarkable, preventive measures must be
taken to ensure that any economic benefits are not outweighed by hefty fines
incurred for non-compliance with GDPR.
For further information and/or clarification contact GAUCI-MAISTRE
XYNOU Legal|
Assurance or visit our website http://gmxlaw.com
[1] Hogan
Lovells, ‘A guide to blockchain and data protection’[ 2017]
[5]
European Commission, ‘Blockchain and the GDPR’ – a thematic report prepared by
the European Union Blockchain Observatory and Forum’ (1st edn, 2018)
It is rather common for an employment contract to include a clause restraining an employee from exercising his trade/profession following the termination of said employment, particularly in the case of employees who are employed in a position of trust and whose role makes them privy to certain business contacts, trade secrets or other information which is very sensitive for the business in question. Typically such a clause would also impose a fine payable to the employer in the event of a breach by the ex-employee.
Despite the frequency of their use, local legislation does not refer specifically to such clauses and case-law on the matter is not extensive, presumably since a number of these disputes tend to be settled out of court.
Historically, the general rule adopted was that all clauses in restraint of trade were considered invalid. Eventually, the courts started accepting the concept of “partial restraint if reasonable and not contrary to the public interest (Ansons’s Law of Contract, 23rd Edition, page 333)”[1]. In the judgment given by the Commercial Court on 31 July 1969 in the case Joseph Xerri nomine vs Brian Clarke, it was stated that “…it may safely be asserted that if clauses in restraint of trade may be impugned at all – and they certainly can in deserving cases – the heading under which an exercise of this sort may be attempted is Section 1028 (today Article 985) of the Civil Code which provides that things which are impossible, or prohibited by law, or contrary to morality, or to public policy, may not be the subject matter of a contract.”
The renowned employment law author Norman Selwyn states, “there are four legitimate interests in respect of which the employer is entitled to limited protection, namely (a) trade secrets and confidential information, (b) existing customers and connections, (c) working for competitors, and (d) enticing existing employees.”[2]
It is clear from an examination of relevant case-law that in order for a restraint of trade clause to be enforceable, adequate compensation must be offered to the employee to make up for this restriction. This is in order to satisfy the quid pro quo requirement. Furthermore, such clause must fulfil a ‘reasonableness’ test, both in terms of the restriction imposed, i.e. that it is for a particular period, limited in application (e.g. applicable only to work with clients of the ex-employer), as well as, if applicable, in terms of fine imposed in the event of such breach.
[1] Attilio Vassallo Cesareo u Saviour Coppini ghan-nom u in rapprezentanza tas-socjetà International Machinery Limited vs Anthony Cilia Pisani (First Hall, Civil Court – 31 January 2003)
[2] Norman Selwyn: “Law of Employment”. 15th Edition, Oxford University Press (2008)
Soaring. Flying. Whirling. Hovering. Diving. Landing. All at the press of a button.
Civil drones are the 21st century dancers in the sky. Tech savvy consumers have fallen in love with them and the romance is set to endure as technological advances have jaw-dropping models hit the market every few months. DJI Mavic 2, Mavic Air, Phantom 4 Pro, Inspire 2 and Walkera Voyager 5 have fingers itching and pulses racing for more.
Yet what seems an innocuous adrenaline rush during one’s spare time is actually causing headaches as legislation is scrambling to catch up so as to ensure both safe and legal use. Nor is the proliferation of these unmanned flying gadgets merely a craze that will ebb and flow with fashion tides since civil drone technology is estimated to take up 10% of the EU civil aviation market within the next decade. Such a booming lucrative industry also translates into thousands of jobs over the next two generations at least.
Given that drones are not simply ‘toys for the boys’, the EU began to clampdown on dodgy drone users last June when it introduced updates to its aviation guidelines. Targeting both manufacturers and operators the remit of the resulting EU Aviation Safety Agency has been to set up a harmonious legal framework across the Union that goes beyond the 500 feet flying height limit. These new guidelines may be summarized as follows:
Design must prioritise safety first irrespective of weight. Currently, drones lighter than 150kg fall under the jurisdiction of national authorities and therefore manufacturers and operators may opt for different design and safety requirements.
Heavier drones would need additional features, such as automated landing in case the operator loses contact with the drone or collision avoidance systems.
Drone operators need to be fully aware of the rules and relevant training must be given before they actually use one.
A national register to be set up so as to catalogue each drone and its operator to enable identification in case of accidents and/or emergencies. The smallest drones are however exempt.
Establish a maximum altitude and distance limits for drone flight.
Establish which drones need to be certified and be equipped with more safety features in the light of the risks they pose.
Compliance is easier said than done since it is not a question of updating nation-specific aviation laws in each EU member state. Malta is a prime example of a complex scenario since it has a controlled airspace, meaning higher weather minimum conditions to ensure safety, security and efficiency in high-volume air-traffic areas. Incidentally, controlled airspace is a generic term that covers Class A, Class B, Class C, Class D, and Class E airspace to provide ATC clearance to IFR flights and to VFR flights that fall within each category. Listed under Class C, Malta’s controlled airspace has a 4,000 feet elevation. Malta also allows the operation of multicopters in its controlled airspace.
Although drone legislation has not yet been enacted in Malta, there are a number of rules and regulations that need to be adhered to. To begin with, all flights need individual approval by the Civil Aviation Department if the drone weighs more than 250g. Consequently, apart from contact details, all camera drones require an individual license, valid drone insurance, declaration of technical specifications, plus a description of planned flight maneuvers. Proof of training is an advantage and this is bound to become mandatory especially as regard the more sophisticated flying machines. As things stand, commercial operators (many offering drone photography and videography services) need to apply for a permit each and every time they wish to use their drones. Permits take about seven working days to be processed. Such a case-by-case approach is a stop-gap measure that is both bureaucratic and not necessarily capable of keeping up with technological advances.
While encouraging use in good weather and visibility, Malta’s CAD designates no-fly zones in the proximity of airports, power stations, hospitals, and prisons. Nor can drones fly over public gatherings and private property without the consent of the owners. Sadly, some people look upon rules as only fit to be broken. Apart from salient safety concerns, unauthorized surveillance is another worry for legislators and law enforcement.
Admittedly, leading drone manufacturers have now incorporated ‘No Fly Zone’ features into their design which they can update or change using firmware updates. Although this move makes both commercial and ethical sense, it does not guarantee flight safety nor prevent accidental flights in restricted areas because:
Not all manufacturers have followed suit;
Some people get a kick out of sheer defiance.
The consequences of outdated or inadequate aviation laws could be much worse than the mayhem drones caused at Gatwick Airport in the countdown to last Christmas which left tens of thousands of passengers stranded for days. Another drone scare hit Heathrow this week. It is easy to say that passenger frustration pales into insignificance when compared to the safety of their lives. Yet this is no justification for reckless and brazen behavior, which may also be a deliberate economic or politically destabilizing maneuver.
Bona fide drone enthusiasts do not go down this heinous avenue. Yet it makes sense to keep up with existing regulations and their updates which is not easy to do so in such a fluid situation. At GMX Law we will be more than happy to help and guide you through any doubts you may have in what is still a grey area. Seeking our legal advice will ensure drones without moans.
TGIF is what helps us to wake up and goad us on at the end of a long week of slog. And given our 24/7 wired lives I’ve got a good hunch that its sheer relief is more necessary than ever. So, anyone in the working world would probably come down on me with a ton of bricks if I had to merely hint at what a good idea it is to reflect upon the past week before Monday morning inevitably looms.
Admittedly brooders don’t need any cajoling. But once you get into the habit of mulling over your week at work, self-assessment becomes second nature. More importantly, it helps to build on good practices, avoid unnecessary stress and seek solutions to problems. Above all this exercise spurs being honest with yourself which infuses your body and soul with serenity while achieving success underlined by mega satisfaction or, realize that it’s time to change direction. Assessing yourself is your journey to discovering what you want and often more importantly what you don’t want as a career path.
Although the guidelines below are adaptable to any work environment, at GMX Law we take pride in nurturing a truly collegial and professional dynamic to deliver a first-rate service to all our clients who are not simply a statistic.
As true professionals we routinely ask the following 10 questions:
What did I as a lawyer learn this week?
There is always something to learn. Research and court sittings are staples in any lawyer’s daily work routine which makes delving into case studies part and parcel of honing legal skills. Nevertheless, there are many other lessons to be learnt. Soft skills readily come to mind and getting them right goes miles in avoiding preventable fireworks in the office as well as winning over the court floor. Moreover, as lawyers we are constantly dealing with the repercussions of human actions, reactions and interactions which expose us to the foolish, the reckless and even the darker side of humanity. Dealing with human baggage impacts much more than the legal issues involved. So as a lawyer ask yourself where and when it is necessary to draw lines. Pondering over lessons learnt also helps to prioritise and tackle challenges from new perspectives. Keep your list realistic and doable. Burning yourself out is totally counterproductive.
What did I achieve this past week?
No matter how trivial, a sense of achievement is always a reason to celebrate. It is a big boost to self-confidence while tracking progress. Clinching an important case that will enable a junior lawyer to prove his/her worth, securing a client’s trust or confirming a reputable lawyer’s skills by winning a case are obvious trophies. All are examples of a thriving legal firm. Yet it’s good to pat yourself on the back for much smaller successes like beating your antipathy towards a client.
Did I have an unforgettable moment?
If yes, relish the adrenaline rush and learn to cherish its fond memories. If the experience has been a downer, learn to digest it and move on.
What did I find most challenging over the past week?
This is a good way of facing difficulties with sincerity and integrity as well as turning challenges into opportunities. It’s also an ideal way of learning from past mistakes. Dealing with difficult clients and even more difficult cases is another fundamental in learning and refining the legal ropes. Same goes for confronting the disappointment of losing a case, which is bound to leave a long lasting sour taste. One particular week could be rendered even more knotty if you are immersed in personal problems of your own. It’s not easy but keeping personal issues outside the office is a trademark of a true professional.
What worried me most during the past week?
Taking note of your main concerns is not the same as wallowing in them. It also helps to prioritise together with thinking positively rather than negatively. Also, do not be afraid to discuss the issue/s with someone you trust and give you good advice. This is crucial for lawyers since they cannot afford to overlook even the slightest detail or give bad advice to their clients.
What was my biggest distraction this past week?
Having your plans thwarted by an unexpected turn of events or a lack of self-discipline is a staple in many a workplace. Dealing with distractions (whatever their source) is a stressbuster and a great improver in time-management. As lawyers, keeping focused is paramount so if you need to close the door and hang your ‘Do not disturb sign’, go ahead.
Is there someone I need to clear the air with?
Awkward or unpleasant situations in any workplace do arise and the quicker they are dealt with, the better for everyone. Aggression, anger and bitterness are prime causes of a toxic atmosphere and will only get worse if not nipped in the bud. Taking the bull by the horns could very well translate into a masterclasss in diplomacy whose kudos for velvety tongued lawyers can never be overestimated.
Is there someone I need to praise or thank?
We all bask in the sun of praise and we all love to feel appreciated. So, show your genuine appreciation and gratitude appropriately and without flattery.
What are my main goals for next week?
This is how you learn to prioritise and tackle challenges from new perspectives. Keep your list realistic and doable. Burning yourself out is totally counterproductive
Is there someone I need to help next week?
Far from being naïve or hypocritical, giving a required helping hand yields the targeted results while offering a lesson in kindness and good manners. It’s good to keep in mind that a chain is as strong as its weakest link. The legal profession is notorious for overbearing and diva antics. Yet the best lawyers are the ones who inspire in triumph and defeat irrespective of the headlines they hit. Reaching out to colleagues fosters authentic team building and demarcates enthusiastic learners from apathetic bummers.
Re-read the questions listed above and you will realise that they are quintessential to goal oriented people and respected leaders. Even if your job status does not have you pegged on the uppermost rungs, these are the kind of questions that instill and sustain a professional attitude, which is all about nurturing self-pride and self-dignity in what you do.
Each member of staff is important. Chewing over your week proves it.
