On the 18th October 2021, the FIAU issued the revised version of the Implementing Procedures Part I, which finalizes the consultation document released back in March 2021. Some notable additions from the Proposed Amendments to the Implementing Procedure Part I are as follows:
Where the information derived from adverse media gives rise to suspicion of ML/FT, subject persons are reminded of their obligation to report to the FIAU.
Senior Managing Officials
One situation in which senior managing officials will have to be identified as beneficial owners is in respect of state-owned enterprises or public administration authorities. This is an interpretation laid down by the EBA in its the Risk Factor Guidelines (EBA/GL/2021/02). The said Guidelines provide additional guidance on this aspect and the measures that subject persons are to take when faced with any such situation.
Ongoing Monitoring of Beneficial Ownership
Changes can take place from time to time within the shareholding or structure of a body corporate or there may be changes within a trust, foundation or association which result in a change in beneficial ownership. In some cases, the subject person may be aware of any such changes as the subject person will be assisting in the implementation. However, changes may also take place without the subject person's knowledge and therefore subject person's must enquire from time to time whether the beneficial ownership information obtained at on-boarding still applies. In both scenarios, the subject person has an obligation to update the beneficial ownership information it holds.
Trigger events can also assist the subject person in questioning whether any changes to the beneficial ownership of the customer are taking place or have already taken place. Examples would include situations where the subject person is acting as director or company secretary for a corporate customer and is requested to sign and submit to the MBR a copy of the relative form notifying a change in shareholding. The same can be said with respect to fiduciaries holding shares in a corporate customer who are requested to transfer part of the shares to existing or new shareholders.
Periodical reviews would be equally relevant in the context of ensuring that beneficial ownership information and documentation is kept updated.
MLRO Time Commitment
An MLRO is free to accept several appointments, however, the more appointments one holds and the more complex or voluminous the activities of the subject person concerned, the more difficult it will inevitably become for the MLRO to meet his/her obligations at law in a satisfactory manner. A subject person who considers this as a viable option must assess whether the MLRO will be able to dedicate sufficient time to cater for the subject person and this assessment should be reviewed from time to time to ensure that the MLRO is managing to dedicate sufficient time to fulfil all the functions associated with the said role.
The FIAU has published a copy with tracked changes and also a finalized version of the Implementing Procedures, both of which can be found at the bottom of https://fiaumalta.org/news/revisions-made-to-the-implementing-procedures-part-i/.
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.