The FIAU has issued a notice informing subject persons and interested parties of a series of amendments to the Prevention of Money Laundering and Funding of Terrorism Regulations, SL 373.01 of the Laws of Malta (hereinafter referred to as the PMLFTRs). These amendments were introduced by means of the Legal Notice 199 of 2021 which was published on the 30th April 2021.

Revisions were made to regulations 2, 4, 11, 13 and 21 of the principal regulations.

The FIAU is urging subject persons to familiarize with the law as amended.

1. Changes to Regulation 2 of the PMLFTRs

The list of authorities considered as Supervisory Authorities in terms of Regulation 2(1) of the PMLFTRs has been widened to include the Malta Business Registry, the Licensing Board established under the Real Estate Agents, Property Brokers ad Property Consultants Act and the Trade Licensing Unit but limited to its licensing function in relation to dealers in precious metals and stones. The inclusion of these authorities within the list is intended to clarify and strengthen the possible cooperation and collaboration that there may be between the FIAU and these new bodies.

2. Changes to Regulation 4 and 13 of the PMLFTRs

The above paragraph takes into consideration the major changes in the Company Services Providers Act whereby both existing and prospective service providers in this Area are now requested to get authorisation by the Malta Financial Services Authority (MFSA) rather then simply being registered with the authority or having notified the FIAU.

The new proviso (b) of paragraph 4 includes the terms ‘authorised’ so as to ensure that there is no misunderstanding that anyone authorised in terms of the Company Service Providers Act as amended will still be considered as carrying our relevant activity and is therefore a subject person for the purposes of PMLFTR.

In order to fully align the provisions of the PMLFTR with those of the EU Directive 2015/849, further amendments were carried out to Regulations 4 and 13 of the PMLFTR to ensure that these correctly reflect the requirements arising from the above Directive when it comes to possible exemptions from AML/CFT requirements and to subject persons’ recordkeeping obligations which may now be extended to a maximum period of 10 years where it is necessary for the purposes of prevention, detection, analysis and investigation of ML/FT activities by the FIAU and other relevant authorities or the law enforcement unit.

3. Changes to Regulation 11 of the PMLFTRs

Regulation 11(11) has been amended in order to render this provision more legible and clearer. It now sets out the obligations of subject persons and a new sub-regulation setting out the powers of the FIAU has been introduced. Instead, the previous version used to set out the obligations that subject persons must adhere to when carrying out occasional transactions, establishing a business relationship 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. The same provision used to also list the power of the FIAU enjoyed in such cases.

4. Changes to Regulation 21 of the PMLFTRs

In an effort to clarify the power of the FIAU when it comes to the imposition of administrative penalties on subject persons carrying out relevant financial business, paragraph 21(4)(b)(ii) has been amended as follows.

The FIAU is now empowered to impose administrative penalties of not more than Euro 5 million in the case of serious, repeated or systematic breaches of any of the requirements arising from the PMLFTR. If, however, the breaches being considered are so severe that Euro 5 million is not considered enough, the FIAU can take into consideration the subject persons’ turnover and impose an administrative penalty of not more than 10% of the turnover, as long as the result is an administrative penalty that is higher than Euro 5 million in value.

For further information on do not hesitate to contact any other member of IURIS Advocates.