A Legal Notice (L.N. 199 of 2021) was published on the 30th April 2021 providing a number of amendments to the principal regulations, the Prevention of Money Laundering and Funding of Terrorism Regulations (hereinafter the 'PMLFTR').
Subject persons and interested parties should take stock of the below amendments made to the PMLFTR by virtue of the Legal Notice:
- Amendment to Regulation 2 of the PMLFTR - By means of the Legal
Notice, the definition of "Supervisory Authority"
provided in the principal regulation has been somewhat broadened.
The list of Authorities considered as Supervisory Authorities in
terms of the PMLFTR now includes the Malta Business Registry (MBR),
the Licensing Board established under the Real Estate Agents,
Property Brokers and Property Consultants Act and the Trade
Licensing Unit (limited to its licensing function in relation to
dealers in precious metals and stones). The incorporation of the
abovementioned Authorities within the list provided in Regulation
shall provide clarity to the potential cooperation and
collaboration that there may be between the FIAU and these new
- The definition of "Trust and Company Service
Provider" has also been amended via the Legal Notice. The
Company Service Providers (CSP) Act has witnessed major changes,
with both existing and prospective Service Providers now requiring
authorisation by the Malta Financial Services Authority (MFSA)
rather than merely being registered with the MFSA or having
notified the FIAU. By means of the Legal Notice, the term
'authorised' has been included within paragraph (b) of this
definition to make sure there is no uncertainty. Therefore, anyone
authorised in terms of the CSP Act as amended will still be
considered as carrying out relevant activity and is thus a subject
person for the purposes of the PMLFTR.
- Amendments carried out to Regulation 4 and 13 of the PMLFTR - The European Commission had pointed out that, following the transposition of Directive (EU) 2015/849 (the 'Directive') into Maltese law, some of the provisions of the PMLFTR were not exactly in line with the requirements of the Directive. Therefore, the Legal Notice provides further amendments to the PMLFTR so as to reflect the requirements of the Directive when it comes to possible exemptions from AML/CFT requirements and to subject persons' recordkeeping obligations.
- Amendment to Regulations 11(11) of the PMLTR - Regulation
11(11) previously set out the obligations that had to be abided by
subject persons when carrying out occasional transactions,
establishing business relationships or carrying out transactions
within the context of a business relationship involving
non-reputable jurisdictions in respect of which there is an
international call for countermeasures. This provision also, prior
to these amendments, previously listed the powers that the FIAU had
in such cases. Following the amendments, Regulation 11(11) is now
limited to setting out the obligations of subject persons, and a
new sub-regulation was introduced setting out the powers of the
FIAU in such cases.
- Amendment to Regulation 21 of the PMLFTR - The Legal Notice has carried out amendments to article 21(4)(b)(ii) in order to clarify the powers of the FIAU in relation to the issuing of administrative penalties on subject persons which carry out relevant financial business. Following such amendments to the PMLFTR, it now ensures that the FIAU is empowered to impose an administrative penalty of not more than five million euro (€5,000,000) in the case of serious, repeated, or systematic breaches of any of the requirements which arise from the PMLFTR. If the breaches being considered are so serious that five million euro (€5,000,000) is not deemed sufficient, the FIAU can take into account the subject person's turnover and impose an administrative penalty of not more than ten percent (10%) of the turnover, as long as this results in an administrative penalty that is higher than five million euro (€5,000,000) in value.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.