Regulations, 2008

L.N. 180 of 2008

PREVENTION OF MONEY LAUNDERING ACT

(CAP. 373)

Prevention of Money Laundering and Funding of Terrorism

Regulations, 2008

IN exercise of the powers conferred by article 12 of the

Prevention of Money Laundering Act, the Minister of Finance, the

Economy and Investment has made the following regulations>-

(1) The title of these regulations is the Prevention of Title, scope and

Money Laundering and Funding of Terrorism Regulations, 2008. commencement.

(2) The objective of these regulations is to implement

the provisions of Directive 2005#60#EC of the European Parliament

and of the Council of 26 October 2005 on the prevention of the use

of the financial system for the purposes of money laundering and

terrorist financing, including Directive 2006#70#EC of the European

Commission of 1 August 2006 laying down implementing measures

for Directive 2005#60#EC as regards the definition of politically

exposed persons and as regards the technical criteria for simplified

customer due diligence and for the exemption on grounds of a

financial activity being conducted on an occasional or very limited

basis, as may be amended from time to time, and any further

implementing measures that may be issued thereunder.

(1)

In these regulations, unless the context otherwise Interpretation

and application.

requires -

“the Act” means the Prevention of Money Laundering Act<

“applicant for business” means a legal or natural person,

whether acting as principal or agent, who seeks to form a

business relationship, or carry out an occasional transaction with

a person who is acting in the course of either relevant financial

business or relevant activity<

“beneficial owner” means the natural person or persons

who ultimately own or control the customer and, or the natural

person or persons on whose behalf a transaction is being

conducted, and>

(a) in the case of a body corporate or a body of

persons, the beneficial owner includes any natural person

or persons who>-

(i) ultimately own or control, whether through

direct or indirect ownership or control, including,

where applicable, through bearer share holdings, more

than 25% of the shares or voting rights in that body

corporate or body of persons other than a company

that is listed on a regulated market which is subject to

disclosure requirements consistent with Community

legislation or equivalent international standards< or

(ii) otherwise exercise control over the

management of that body corporate or body of

persons< and

(b) in the case of any other legal entity or legal

arrangement which administers and distributes funds, the

beneficial owner includes>-

(i) where the beneficiaries have been

determined, a natural person who is the beneficiary

of at least 25% of the property of the legal entity or

arrangement<

(ii) where the beneficiaries have not yet been

determined, the class of persons in whose main interest

the legal entity or arrangement is set up or operates<

(iii) a natural person who controls at least 25%

of the property of the legal entity or arrangement< and

(c) in the case of long term insurance business, the

beneficial owner shall be construed to be the beneficiary

under the policy<

“business relationship” means a business, professional or

commercial relationship, which is expected to have an element

of duration, between two or more persons, at least one of which

is acting in the course of either relevant financial business or

relevant activity<

“Case 1” (negotiations) means any case where negotiations

take place between the parties with a view to the formation of a

business relationship between them<

“Case 2” (suspicion) means any case where, regardless of

any exemption or threshold, in respect of any transaction, any

person handling the transaction knows or suspects that the

applicant for business may have been, is, or may be engaged in

money laundering or the funding of terrorism, or that the

transaction is carried out on behalf of another person who may

have been, is, or may be engaged in money laundering or the

funding of terrorism<

“Case 3” (single large transaction) means any case where,

in respect of any transaction, payment is to be made by or to

the applicant for business of the amount of fifteen thousand

euro (€15,000) or more, and, where an occasional transaction

involves a money transfer or remittance in accordance with

regulation 7(11), the payment amount is one thousand euro

(€1,000) or more<

“Case 4” (series of transactions) means any case where, in

respect of two or more transactions>-

(a) it appears at the outset to a person dealing with

any of the transactions that –

(i) the transactions are carried out by the same

person and are of a similar character, and

(ii) the total amount, in respect of all of the

transactions, which is payable by or to the applicant

for business is fifteen thousand euro (€15,000) or

more< or

(b) at any later stage it appears to such a person that

the provisions of paragraph (a)(i) and (ii) are satisfied<

“casino” shall have the same meaning as is assigned to it

by article 2 of the Gaming Act and “casino licensee” in these Cap. 400.

regulations shall be construed accordingly<

“collective investment scheme”, “participants” and “units”

have the same meanings as are assigned to these terms

respectively in the Investment Services Act<

“the Community” shall mean the European Community

and, for the purposes of these regulations, shall include EEA

States<

“company” has the same meaning as is assigned to it in

the Companies Act<

“criminal activity” has the same meaning as is assigned to

the term in the Act<

“EEA State” means a State which is a contracting party to

the agreement on the European Economic Area signed at Oporto

on the 2 May, 1992 as amended by the Protocol signed at

Brussels on the 17 March, 1993 and as may be amended by any

subsequent acts<

“established business relationship” means a business

relationship formed by a person acting in the course of either

relevant financial business or relevant activity where that person

has carried out customer due diligence under procedures

maintained by him, in accordance with the provisions of these

regulations in relation to the formation of that business

relationship<

“Financial Intelligence Analysis Unit” has the same

meaning as is assigned to the term in the Act<

“funding of terrorism” means the conduct described in

articles 328F and 328I both inclusive, of the Criminal Code<

“group of companies” has the same meaning as is assigned

to the term “group company” by the Companies Act so however

that, for the purposes of these regulations, it shall include also

any other body corporate registered or operating in a reputable

jurisdiction and forming part of the group of companies and

which is further licensed or otherwise authorised under the laws

of that jurisdiction to carry out any activity equivalent either to

relevant financial business or to relevant activity<

“long term insurance business” means the business of

insurance of any of the classes specified in the Second Schedule

to the Insurance Business Act<

“money laundering” means the doing of any act which

constitutes an offence under the Act, or in the case of an act

committed otherwise than in Malta, would constitute such an

offence if done in Malta<

“occasional transaction” means any transaction other than

a transaction carried out in the exercise of an established

business relationship formed by a person acting either in the

course of relevant financial business or in the course of relevant

activity<

“politically exposed persons” means natural persons who

are or have been entrusted with prominent public functions and

shall include their immediate family members or persons known

to be close associates of such persons, but shall not include

middle ranking or more junior officials<

“relevant activity” means the activity of the following legal

or natural persons when acting in the exercise of their

professional activities>

(a) auditors, external accountants and tax advisors,

including when acting as provided for in paragraph (c)<

(b)

real estate agents<

(c) notaries and other independent legal

professionals when they participate, whether by acting on

behalf of and for their client in any financial or real estate

transaction or by assisting in the planning or execution of

transactions for their clients concerning the>

(i) buying and selling of real property or

business entities<

(ii) managing of client money, securities or

other assets, unless the activity is undertaken under a

licence issued under the provisions of the Investment

Services Act<

(iii) opening or management of bank, savings

or securities accounts<

(iv) organisation of contributions necessary for

the creation, operation or management of companies<

(v) creation, operation or management of trusts,

companies or similar structures,

or when acting as a trust or company service

provider<

(d) trust and company service providers not already

covered under paragraphs (a), (c), (e) and (f)<

(e) nominee companies holding a warrant under the

Malta Financial Services Authority Act and acting in

relation to dissolved companies registered under the said

Act<

(f) any person providing trustee or any other

fiduciary service, whether authorised or otherwise, in terms

of the Trusts and Trustees Act<

(g)

casino licensee<

(h) other natural or legal persons trading in goods

whenever payment is made in cash in an amount equal to

fifteen thousand euro (€15,000) or more whether the

transaction is carried out in a single operation or in several

operations which appear to be linked< and

(i) any activity which is associated with an activity

falling within paragraphs (a) to (h)<

“relevant financial business” means -

(a) any business of banking or any business of an

electronic money institution carried on by a person or

institution who is for the time being authorised, or required

to be authorised, under the provisions of the Banking Act<

(b) any activity of a financial institution carried on

by a person or institution who is for the time being

authorised, or required to be authorised, under the

provisions of the Financial Institutions Act<

(c) long term insurance business carried on by a

person or institution who is for the time being authorised,

or required to be authorised, under the provisions of the

Insurance Business Act or enrolled or required to be

enrolled under the provisions of the Insurance

Intermediaries Act<

(d) investment services carried on by a person or

institution licensed or required to be licensed under the

provisions of the Investment Services Act<

(e) administration services to collective investment

schemes carried on by a person or institution recognised

or required to be recognised under the provisions of the

Investment Services Act<

(f) a collective investment scheme licensed or

recognised, or required to be licensed or recognised, under

the provisions of the Investment Services Act<

(g) any activity other than that of a scheme or a

retirement fund, carried on in relation to a scheme, by a

person or institution registered or required to be registered

under the provisions of the Special Funds (Regulation) Act

and for the purpose of this paragraph, “scheme” and

“retirement fund” shall have the same meaning as is

assigned to them in the said Act< .

(h) any activity of a regulated market and that of a

central securities depository authorised or required to be

authorised under the provisions of the Financial Markets

Act<

(i) any activity under paragraphs (a) to (h) carried

out by branches established in Malta and whose head

offices are located inside or outside the Community<

(j) any activity which is associated with a business

falling within paragraphs (a) to (i)<

“reputable jurisdiction” means any country having

appropriate legislative measures for the prevention of money

laundering and the funding of terrorism, taking into account

that country’s membership of, or any declaration or accreditation

by, any international organisation recognised as laying down

internationally accepted standards for the prevention of money

laundering and for combating the funding of terrorism, and

which supervises natural and legal persons subject to such

legislative measures for compliance therewith<

“shell bank” means a credit institution or an institution

engaged in equivalent activities, incorporated in a jurisdiction

in which it has no physical presence, involving meaningful mind

and management, and which is not affiliated with a regulated

financial group<

“subject person” means any legal or natural person carrying

out either relevant financial business or relevant activity<

“supervisory authority” means –

(a)

the Central Bank of Malta<

(b)

the Malta Financial Services Authority<

(c) the Registrar of Companies acting under articles

403 to 423 of the Companies Act<

(d) a person appointed by the Registrar of

Companies under articles 403 to 423 of the Companies

Act<

(e) an inspector appointed under article 30 of the

Insurance Business Act, including when such inspector

exercises his functions for the purposes of the Insurance

Intermediaries Act by virtue of article 54 thereof<

(f) a person appointed under article 20 or article 22

of the Banking Act<

(g) a person appointed under article 14 or article 15

of the Financial Institutions Act<

(h) a person appointed under article 13 or article 14

of the Investment Services Act<

(i) the Lotteries and Gaming Authority acting under

the Lotteries and Other Games Act and the Gaming Act,

and any regulations issued thereunder<

(j) a person appointed under article 17 of the

Lotteries and Other Games Act<

(k) the Comptroller of Customs when carrying out

duties under any regulations that may be issued or are in

force from time to time relating to the cross border

movement of cash and other financial instruments<

“terrorism” means any act of terrorism as defined in article

328A of the Criminal Code<

“trust and company service providers” means any natural

or legal person who, by way of business, provides any of the

following services to third parties>

(a)

forming companies or other legal persons<

(b) acting as or arranging for another person to act

as a director or secretary of a company, a partner of a

partnership, or a similar position in relation to other legal

persons<

(c) providing a registered office, business address

and other related services for a company, a partnership or

any other legal person or arrangement<

(d) acting as or arranging for another person to act

as a trustee of an express trust or a similar legal

arrangement<

(e) acting as or arranging for another person to act

as a nominee shareholder for another person other than a

company listed on an official stock exchange that is subject

to disclosure requirements in conformity with the Financial

Markets Act or subject to equivalent international Cap. 345.

standards.

(2) Where these regulations are extended to professions

and other categories of undertakings other than those referred to in

this regulation and whose activities are particularly likely to be used

for the purposes of money laundering or the funding of terrorism,

these regulations shall apply in full or in part as may be established

by such extension in accordance with the provisions of the Act, and

the Financial Intelligence Analysis Unit shall inform the European

Union Commission accordingly through the established appropriate

channels.

(3) These regulations shall also apply where any ‘relevant

financial business’ or any ‘relevant activity’ as defined in this

regulation is undertaken or performed through the Internet or other

electronic means.

(4) Where the Financial Intelligence Analysis Unit

determines, or is otherwise informed, that a particular jurisdiction

meets the criteria of a ‘reputable jurisdiction’ as defined in this

regulation, it shall inform the relevant authorities of other Member

States of the Community and the European Union Commission

through the established appropriate channels.

(1) The Financial Intelligence Analysis Unit may

determine that legal and natural persons who engage in a financial

activity on an occasional or very limited basis and where there is

little risk of money laundering or the funding of terrorism occurring,

do not fall within the scope of relevant financial business as defined

for the purposes of these regulations.

(2) In making a determination under sub-regulation (1)

the Financial Intelligence Analysis Unit shall, subject to sub-

regulation (3), apply all the following criteria>

(a) the total turnover of the financial activity does not

exceed fifteen thousand euro (€15,000), and the Financial

Intelligence Analysis Unit may establish different thresholds

not exceeding this amount depending on the type of financial

activity<

(b) each transaction per customer does not exceed five

hundred euro (€500) whether the transaction is carried out in a

single operation or in several operations which appear to be

linked, and the Financial Intelligence Analysis Unit may

establish different thresholds not exceeding this amount

depending on the type of financial activity<

(c) the financial activity is not the main activity and in

absolute terms does not exceed five per centum (5%) of the

total turnover of the legal or natural person concerned<

(d) the financial activity is ancillary and not directly

related to the main activity<

(e) with the exception of paragraph (i) of the definition

of ‘relevant activity’, the main activity is not an activity falling

within the definition of relevant financial business or relevant

activity< and

(f) the financial activity is provided only to the customers

of the main activity and is not generally offered to the public.

(3) In assessing the risk of money laundering or the

funding of terrorism for the purposes of sub-regulation (1), the

Financial Intelligence Analysis Unit shall pay particular attention

to, and examine any financial activity which, is particularly likely,

by its very nature, to be used or abused for money laundering or the

funding of terrorism and the Financial Intelligence Analysis Unit

shall not consider that financial activity as representing a low risk

of money laundering or funding of terrorism if the information

available suggests otherwise.

(4) In making a determination under sub-regulation (1)

the Financial Intelligence Analysis Unit shall further state the reasons

underlying the decision and shall revoke such determination should

circumstances change.

(5) The Financial Intelligence Analysis Unit shall

establish risk-based monitoring mechanisms or other adequate

measures as is practicable to ensure that determinations under sub-

regulation (1) are not abused for money laundering or the funding

of terrorism.

(1) No subject person shall form a business relationship Systems and

training to prevent

or carry out an occasional transaction with an applicant for business money laundering

unless that subject person>

and the funding of

terrorism.

(a) maintains the following measures and procedures

established in relation to that business in accordance with the

provisions of these regulations>

(i)

customer due diligence measures<

(ii)

record-keeping procedures< and

(iii)

internal reporting procedures<

(b) applies the measures and procedures established under

paragraph (a) including when entering into or undertaking non

face-to-face relationships or transactions<

(c) establishes policies and procedures on internal control,

risk assessment, risk management, compliance management and

communications that are adequate and appropriate to prevent

the carrying out of operations that may be related to money

laundering or the funding of terrorism<

(d) takes appropriate measures from time to time for the

purpose of making employees aware of>

(i)

the measures and procedures under the

provisions of paragraph (a) and paragraph (c), and any other

relevant policies that are maintained by him< and

(ii)

the provisions of the Prevention of Money

Laundering Act< of the Sub-Title, Of Acts of Terrorism,

Funding of Terrorism and Ancillary Offences of Title IVA

of Part II of Book First of the Criminal Code< and of these

regulations< and

(e) provides employees from time to time with training

in the recognition and handling of transactions carried out by,

or on behalf of, any person who may have been, is, or appears

to be engaged in money laundering or the funding of terrorism.

(2) Subject persons shall ensure that they have in place

appropriate procedures for due diligence when hiring employees.

(3) In this regulation, the term “employees” means those

employees whose duties include the handling of either relevant

financial business or relevant activity.

(4) Where a natural person undertakes any of the

professional activities as defined under ‘relevant activity’ in

regulation 2 as an employee of a legal person, the obligations under

this regulation shall apply to that legal person.

(5) Any subject person who contravenes the provisions

of this regulation shall be guilty of an offence and shall, on

conviction, be liable to a fine (multa) not exceeding fifty thousand

euro (€50,000) or to imprisonment for a term not exceeding two

years, or to both such fine and imprisonment.

(6) In determining whether a subject person has complied

with any of the requirements of sub-regulation (1), a court shall

consider>

(a) any relevant guidance or procedures issued, approved

or adopted by the Financial Intelligence Analysis Unit with the

concurrence of the relevant supervisory authority, and which

applies to that subject person< and

(b) in a case where no guidance or procedures falling

within the provisions of paragraph (a) apply, any other relevant

guidance issued by a body which regulates, or is representative

of, any trade, profession, business or employment carried on

by that subject person.

(7) In proceedings against any subject person for an

offence against this regulation, it shall be a defence for that person

to show that he took all reasonable steps and exercised all due

diligence to avoid the commission of the offence.

(1) Where an offence against the provisions of regulation Offences by bodies

4 is committed by a body or other association of persons, be it corporate

unincorporated

corporate or unincorporate, every person who at the time of the associations.

commission of the offence was a director, manager, secretary or other

similar officer of such body or association, or was purporting to act

in any such capacity, shall be guilty of that offence unless he proves

that the offence was committed without his knowledge and that he

exercised all due diligence to prevent the commission of the offence.

(2) Without prejudice to sub-regulation (1), where the

offence is committed by a body or other association of persons, be it

corporate or unincorporate, or by a person within and for the benefit

of that body or other association of persons consequent to the lack

of supervision or control that should have been exercised on him by

a person referred to in sub-regulation (1), such body or association

shall be liable to an administrative penalty of not less than one

thousand two hundred euro (€1,200) and not more than five thousand

euro (€5,000).

(3) Administrative penalties under sub-regulation (2) shall

be imposed by the Financial Intelligence Analysis Unit without

recourse to a court hearing and may be imposed either as a one time

penalty or on a daily cumulative basis until compliance provided

that in the latter case the accumulated penalty shall not exceed fifty

thousand euro (€50,000).

(1) Subject persons carrying out relevant financial Branches and

majority owned

business shall not establish or acquire branches or majority owned subsidiaries.

subsidiaries in a jurisdiction that does not meet the criteria for a

reputable jurisdiction as defined in regulation 2.

(2) In relation to their branches and majority owned

subsidiaries situated in a reputable jurisdiction, subject persons

carrying out relevant financial business shall>

(a) communicate to such branches and majority owned

subsidiaries the relevant policies and procedures established in

accordance with regulation 4<

(b) apply in such branches and majority owned

subsidiaries, where applicable, measures that, as a minimum, are

equivalent to those under these regulations regarding customer due

diligence and record keeping, and where the legislation of that

reputable jurisdiction does not permit the application of such

equivalent measures, subject persons under this regulation shall

immediately inform the Financial Intelligence Analysis Unit and shall

further take additional measures to effectively handle the risk of

money laundering or the funding of terrorism.

(3) Where the Financial Intelligence Analysis Unit is in

possession of information in accordance with sub-regulation (2)(b)

it shall immediately inform the relevant domestic supervisory

authority, the relevant authorities of the other Member States of the

Community, and the European Union Commission accordingly.

(4) Where a subject person under this regulation is unable

to apply additional measures as required under sub-regulation (2) to

effectively handle the risk of money laundering or the funding of

terrorism, that subject person shall immediately inform the Financial

Intelligence Analysis Unit who, in collaboration with the relevant

supervisory authority, may require the closure of the branch or

majority owned subsidiary in accordance with the applicable law.

(1) Customer due diligence measures in accordance with

paragraph (a) of regulation 4(1) shall comprise>

(a) the identification of the applicant for business and the

verification of the identity of the applicant for business on the

basis of documents, data or information obtained from a reliable

and independent source<

(b) the identification, where applicable and in accordance

with sub-regulation (3), of the beneficial owner and the taking

of reasonable measures to verify the identity such that the

subject person is satisfied of knowing who the beneficial owner

is, including, in the case of a body corporate, trusts and similar

legal arrangement, reasonable measures to understand its

ownership and control structure<

(c) obtaining information on the purpose and intended

nature of the business relationship, such that a subject person

is able to establish the business and risk profile of the customer<

(d) conducting ongoing monitoring of the business

relationship,

and where the applicant for business or the beneficial owner

is subsequently found to be or becomes a politically exposed

person as defined in regulation 2, customer due diligence shall

proceed in accordance with regulation 11(6) and (7).

(2) The ongoing monitoring of a business relationship for

the purposes of sub-regulation (1) shall include>

(a) the scrutiny of transactions undertaken throughout the

course of the relationship to ensure that the transactions being

undertaken are consistent with the subject person’s knowledge

of the customer and of his business and risk profile, including,

where necessary, the source of funds< and

(b) ensuring that the documents, data or information held

by the subject person are kept up to date.

(3) Where an applicant for business is or appears to be

acting otherwise than as principal, in addition to the identification

and the verification of the identity of the applicant for business>

(a) subject persons shall ensure that the applicant for

business is duly authorised in writing by the principal<

(b) subject persons shall establish and verify the identity

of the person on whose behalf the applicant for business is

acting<

(c) where the principal is a body corporate, a body of

persons, or any other form of legal entity or arrangement, subject

persons shall, in addition to verifying the legal status of the

principal, identify all directors and, where such principal does

not have directors, all such other persons vested with its

administration and representation, and establish the ownership

and control structure<

(d) in addition to the requirements under paragraph (c),

where the principal is a body corporate, a body of persons, trust

or any other form of legal entity or arrangement in which there

is a shareholding, or any other form of ownership interest or

assets held under a trustee or any other fiduciary arrangement,

a subject person shall not undertake any business with or provide

any service to the applicant for business unless that applicant

for business discloses the identity of the beneficial owners, his

principal, and the trust settlor, as the case may be, and produces

the relevant authenticated identification documentation, and

such disclosure procedures shall also apply where there are

changes in beneficial ownership, or principal<

(e) where the applicant for business is acting as a trustee

or under any other fiduciary arrangement, a subject person shall

not undertake any business with or provide any service to the

applicant for business unless that applicant for business

discloses the identity of the beneficial owners, his principal,

and the trust settlor, as the case may be, and produces the

relevant authenticated identification documentation, and such

disclosure procedures shall also apply where there are changes

in beneficial ownership, or principal.

(4) Subject persons shall not keep anonymous accounts

or accounts in fictitious names.

(5) Without prejudice to the provisions of regulation 8,

customer due diligence measures maintained by a subject person

shall be deemed to be in accordance with the provisions of these

regulations if, in Cases 1 to 4, that subject person requires their

application to all new applicants for business when contact is first

made between that subject person and the applicant for business

concerning any particular business relationship or occasional

transaction.

(6) Customer due diligence measures under this regulation

shall be applied to all new customers and, at appropriate times, to

existing customers on a risk-sensitive basis.

(7) Where, following the application of the customer due

diligence measures under these regulations, in an established business

relationship doubts have arisen about the veracity or adequacy of

the previously obtained customer identification information, or

changes have occurred in the circumstances surrounding that

established business relationship, then the customer due diligence

measures shall be repeated in accordance with these regulations.

(8) Without prejudice to sub-regulation (1), subject

persons may determine the extent of the application of customer

due diligence requirements on a risk sensitive basis depending on

the type of customer, business relationship, product or transaction>

Provided that subject persons are able to demonstrate to

the Financial Intelligence Analysis Unit, or to any other supervisory

authority acting on behalf of the Financial Intelligence Analysis Unit

in ensuring compliance with these regulations, that the extent of the

application on a risk-sensitive basis is appropriate in view of the

risks of money laundering and the funding of terrorism.

(9) For the purposes of this regulation, subject persons

shall develop and establish effective customer acceptance policies

and procedures that are not restrictive in allowing the provision of

financial and other services to the public in general but that are

conducive to determine, on a risk based approach, whether an

applicant for business is a politically exposed person and that, as a

minimum, include>

(a) a description of the type of customer that is likely to

pose higher than average risk<

(b) the identification of risk indicators such as the

customer background, country of origin, business activities,

products, linked accounts or activities and public or other high

profile positions< and

(c) the requirement for an enhanced customer due

diligence for higher risk customers in accordance with

regulation 11.

(10) An applicant for business who makes a false

declaration or a false representation or who produces false

documentation for the purposes of this regulation shall be guilty of

an offence and shall be liable, on conviction, to a fine (multa) not

exceeding fifty thousand euro (€50,000) or to imprisonment for a

term not exceeding two years or to both such fine and imprisonment.

(11) Subject persons who carry out a financial activity

under ‘relevant financial business’ that involves the transfer of funds

both domestically and cross-border shall comply with the provisions

of Regulation (EC) No 1781#2006 of the European Parliament and

of the Council of 15 November 2006 on information on the payer

accompanying transfer of funds, as may be in force from time to

time.

(12) A subject person who contravenes the provisions of

this regulation or of Regulation (EC) No 1781#2006 of the European

Parliament and of the Council of 15 November 2006 on information

on the payee accompanying transfers of funds shall be liable to an

administrative penalty of not less than two hundred and fifty euro

(€250) and not more than two thousand five hundred euro (€2,500)

which shall be imposed by the Financial Intelligence Analysis Unit

without recourse to a court hearing.

(1) Subject persons shall verify the identity of the Verification of

identification.

applicant for business and, where applicable, the identity of the

beneficial owner, before the establishment of a business relationship

or the carrying out of an occasional transaction.

(2) Notwithstanding sub-regulation (1), subject persons

may complete the verification during the establishment of a business

relationship where this is necessary for the continued normal conduct

of business provided that the risk of money laundering or the funding

of terrorism is low and, provided further, that the verification

procedures be completed as soon as is reasonably practicable after

the initial contact.

(3) Notwithstanding sub-regulations (1) and (2), in

relation to life insurance, subject persons may complete the

verification of the identity of the beneficiary under the policy after

the business relationship has been established but prior to or at the

time of payout or at or before the time the beneficiary intends to

exercise any of his rights vested under the policy.

(4) Notwithstanding sub-regulations (1) and (2), subject

persons may open a bank account as may be required by the applicant

for business provided that adequate measures are put in place such

that no transactions are carried out through the account until the

verification procedures in accordance with sub-regulation (1) have

been satisfactorily completed.

(5) Where a subject person is unable to comply with

paragraphs (a), (b) and (c) of regulation 7(1), the customer due

diligence procedures shall require that subject person not to carry

out any transaction through the account, not to establish the business

relationship or carry out any occasional transaction, or to terminate

the business relationship and to consider making a suspicious

transaction report to the Financial Intelligence Analysis Unit in

accordance with these regulations>

Provided that, where to refrain in such manner is impossible

or is likely to frustrate efforts of investigating a suspected money

laundering or the funding of terrorism operation that business shall

proceed on condition that a disclosure is immediately lodged with

the Financial Intelligence Analysis Unit in accordance with

regulation 15(6)>

Provided further that subject persons carrying out a relevant

activity under paragraph (a) or paragraph (c) of the definition of

“relevant activity” shall not be bound by the provisions of this sub-

regulation if those subject persons are acting in the course of

ascertaining the legal position for their client or performing their

responsibilities of defending or representing that client in, or

concerning, judicial procedures, including advice on instituting or

avoiding procedures.

(1) In addition to complying with the provisions of Additional

customer due

regulation 7 and regulation 8, a casino licensee shall>

diligence

requirements for

casino licensees.

(a) not allow any person to enter the casino unless such

person has been satisfactorily identified pursuant to the

provisions of article 25 of the Gaming Act<

(b) identify, and verify by the production of an

identification document, any person who, whilst in the casino

exchanges cash, a cheque or bank draft, whether such is drawn

on a local or a foreign credit institution, or who otherwise makes

a credit or a debit card payment in exchange for chips or tokens

for an amount of two thousand euro (€2,000) or more for use in

the casino<

(c) identify, and verify by the production of an

identification document, any person who, whilst in the casino

exchanges cash, exchanges chips or tokens after playing a game

or games, for an amount of two thousand euro (€2,000) or more<

(d) ensure that the particulars relating to the identity of a

person exchanging chips or tokens to the value of two thousand

euro (€2,000) or more is matched with, and cross referred to,

the particulars relating to the identity of the person exchanging

cash, cheques or bank drafts, or making a credit or debit card

payment in exchange for those chips or tokens, and shall further

ensure that chips or tokens are derived from winnings made

whilst playing a game or games at the casino< and

(e) ensure that the provisions of paragraphs (b) to (d) are

also applied in cases where in any one gaming session a person

carries out transactions which are individually for an amount

of less than two thousand euro (€2,000) but which in aggregate

equal or exceed such amount.

(2) Notwithstanding the provisions of sub-regulation (1)

and without prejudice to the provisions of regulation 15(6) and (7),

the casino licensee shall further record the particulars relating to the

identity of a person playing a game or games in the casino where the

casino licensee or any casino employee has any knowledge or

suspicion that such person may have been, is, or may be, engaging

in money laundering or the funding of terrorism.

(1) Without prejudice to the provisions of sub-regulation

(5) and sub-regulation (6), subject persons shall not apply customer

due diligence measures in accordance with regulation 7 and

regulation 8(1), but shall gather sufficient information to establish

that the applicant for business qualifies accordingly –

(a) where the applicant for business is a person who is

authorised to undertake relevant financial business or is a person

who is licensed or otherwise authorised in another Member State

of the Community or under the laws of a reputable jurisdiction

to carry out an activity which is equivalent to relevant financial

business<

(b) in the case of legal persons listed on a regulated market

authorised in accordance with the provisions of the Financial

Markets Act or on an equivalent regulated market within the

Community, and legal persons otherwise listed on an equivalent

regulated market in a reputable jurisdiction and which are

subject to equivalent public disclosure requirements<

(c) with respect to beneficial owners of pooled accounts

held by persons carrying out a relevant activity under paragraph

(c) of the definition of “relevant activity” domestically, from

within the Community or from a reputable jurisdiction, provided

that the subject person shall ensure that supporting identification

documentation is available, or may be made available, on

request, to the institution that is acting as the depository for the

pooled accounts<

(d) in the case of domestic public authorities or public

bodies which fulfill all the following criteria>

(i) the applicant for business has been entrusted with

a public function pursuant to the Treaty on the European

Union, the Treaties on the Communities or other

Community legislation<

(ii) the identification of the applicant for business

is publicly available, transparent and verified<

(iii) the applicant for business undertakes activities

that are transparent, including any accounting practices<

and

(iv) the applicant for business is either accountable

to a Community institution or to a domestic relevant

authority or to an authority of another member of the

Community or, where appropriate and effective procedures

are in place to control the activity of the applicant<

(e) to any other applicant for business who is a legal

person and who represents a low risk of money laundering or

the funding of terrorism in accordance with sub-regulation (2).

(2) For the purposes of paragraph (e) of sub-regulation

(1), an applicant for business who is a legal person and who does

not have the status as provided for under paragraph (d) of sub-

regulation (1) shall be considered as representing a low risk of money

laundering or the funding of terrorism where>-

(a) the applicant for business undertakes a financial

activity outside the scope of relevant financial business as

defined in these regulations, provided that the applicant for

business is also subject to these regulations independently, even

if the applicant for business forms part of a group of companies<

(b) the identity of the applicant for business is publicly

available, transparent and verified<

(c) the applicant for business is subject to the full

licensing requirements under domestic law for undertaking those

financial activities, is supervised for those activities by a

relevant competent authority, and is further subject to

supervision on compliance with these regulations in accordance

with the relevant provisions of the Act< and

(d) the applicant for business is subject to all sanctions

and administrative measures provided for under these

regulations for non-compliance.

(3) Without prejudice to the provisions of sub-regulation

(5) and sub-regulation (6), subject persons shall not apply customer

due diligence measures in accordance with regulation 7 and

regulation 8(1) in relation to>-

(a) life insurance policies in respect of which a premium

is payable in one installment of an amount not exceeding two

thousand five hundred euro (€2,500)<

(b) life insurance policies in respect of which a periodic

premium is payable and where the total payable in respect of

any calendar year does not exceed one thousand euro (€1,000)<

(c) insurance policies in respect of pension schemes

provided that such policies contain no surrender clause and may

not be used as collateral for a loan<

(d) a pension, superannuation or similar scheme that

provides retirement benefits to employees, where contributions

are effected through deductions from wages and where the

scheme regulations prohibit members from assigning their

interests under the scheme<

(e) electronic money as defined under the Banking Act

where, if the electronic device cannot be recharged the

maximum amount stored is one hundred and fifty euro (€150)

or less, or where, if the electronic device can be recharged, a

limit of two thousand five hundred euro (€2,500) is imposed

on the total amount that can be transacted in a calendar year,

except where an amount of one thousand euro (€1,000) or more

is redeemed in that calendar year< and

(f) any other product or transaction that represents a low

risk of money laundering or the funding of terrorism in

accordance with sub-regulation (4).

(4) Subject persons shall consider products that fulfill all

the following criteria, or transactions related to them, as representing

a low risk of money laundering or funding of terrorism for the

purposes of paragraph (f) of sub-regulation (3) where>

(a) the product is subject to a written contractual

agreement<

(b) the related transactions are carried out through an

account in the name of the applicant for business held with a

credit institution authorised under the Banking Act or so

authorised in another Member State of the Community or

otherwise so authorised under the laws of a reputable

jurisdiction<

(c) the product or related transactions are not anonymous

and they allow for the application of the customer due diligence

measures in accordance with these regulations under Case 2

(suspicion) or similar regulations in another Member State of

the Community or a reputable jurisdiction<

(d) the product is subject to a predetermined maximum

threshold and>

(i) where the product constitutes an insurance policy

or savings product of a similar nature, the maximum

threshold does not exceed that laid down in paragraphs (a)

and (b) of subregulation (3)<

(ii) in all other cases, the maximum threshold does

not exceed fifteen thousand euro (€15,000), whether the

transaction is carried out under Case 3 (single transaction)

or Case 4 (series of transactions)<

(e) third parties cannot enjoy the benefits of the product

or related transactions, except in the case of death, disablement,

survival to a predetermined age, or similar events<

(f) where the products or related transactions allow for

the investment of funds in financial assets or claims, including

insurance or other kind of contingent claims, provided that>

(i)

the benefits of the product or related

transactions are only realisable in the long term<

(ii)

the product or related transactions cannot be

used as collateral<

(iii) there are no accelerated payments, no

surrender clauses are used and no early termination takes

place during the contractual relationship.

(5) Nothing in this regulation contained shall apply in

circumstances falling within Case 2 (suspicion).

(6) For the purposes of this regulation, in determining

whether an applicant for business or a product or related transactions

represent a low risk of money laundering or the funding of terrorism,

subject persons shall pay special attention to the activities of that

applicant for business or to any type of product or transaction that,

by its nature, may be used or abused for money laundering or the

funding of terrorism, and, where there is information that suggests

that this risk may not be low, that applicant for business or that

product and related transactions shall not be considered as

representing a low risk of money laundering or the funding of

terrorism.

(7) Where the Financial Intelligence Analysis Unit

determines that a particular jurisdiction does not meet the criteria of

a reputable jurisdiction as defined in regulation 2, or where the

Financial Intelligence Analysis Unit is otherwise informed that a

jurisdiction is not considered as meeting the criteria of a reputable

jurisdiction, it shall, in collaboration with the relevant supervisory

authorities, prohibit subject persons from applying the provisions

for simplified customer due diligence under this regulation to all

business relationships and transactions from that particular

jurisdiction.

(1) In Cases 1 to 4, in addition to the requirements under

regulation 7, subject persons shall apply, on a risk-sensitive basis,

enhanced customer due diligence measures in accordance with this

regulation and in situations which, by their nature, can present a

higher risk of money laundering or the funding of terrorism.

(2) Subject persons shall apply one or more of the

following additional measures to compensate for the higher risk

where the applicant for business has not been physically present for

identification purposes>

(a) establish the identity of the applicant for business

using additional documentation and information<

(b) verify or certify the documentation supplied using

supplementary measures<

(c) require certified confirmation of the documentation

supplied by a person carrying out a relevant financial activity<

(d) ensure that the first payment or transaction into the

account is carried out through an account held by the applicant

for business in his name with a credit institution authorised

under the Banking Act or otherwise so authorised in another

Member State of the Community or in a reputable jurisdiction.

(3) In establishing cross-border correspondent banking

and other similar relationships with respondent institutions from a

country other than a Member State of the Community, subject persons

carrying out relevant financial business under paragraph (a) of the

definition in regulation 2 shall ensure that>-

(a) they fully understand and document the nature of the

business activities of their respondent institution, including,

from publicly available information, the reputation of and the

quality of supervision on that institution and whether that

institution has been subject to a money laundering or funding

of terrorism investigation or regulatory measures<

(b) they assess the adequacy and effectiveness of their

internal controls for the prevention of money laundering and

the funding of terrorism<

(c) the prior approval of senior management for the

establishment of new correspondent banking relationships is

obtained<

(d) they document their respective responsibilities for the

prevention of money laundering and the funding of terrorism<

(e) with respect to payable-through accounts, they are

satisfied that the respondent credit institution has verified the

identity of and performed on-going due diligence on the

customers having direct access to the accounts of the respondent

institution and that it is able to provide relevant customer due

diligence data to that subject person upon request.

(4) Subject persons carrying out relevant financial

business under paragraph (a) of the definition in regulation 2 shall>-

(a) not enter into, or continue, a correspondent banking

relationship with a shell bank<

(b) take appropriate measures to ensure that they do not

enter into, or continue, a corresponding banking relationship

with a bank which is known to permit its accounts to be used

by a shell bank.

(5) Subject persons shall pay special attention to any

threat of money laundering or funding of terrorism that may arise

from new or developing technologies, or from products or

transactions that might favour anonymity, and take measures, if

needed, to prevent their use in money laundering or funding of

terrorism.

(6) In accordance with sub-regulation (7) and subject to

sub-regulation (8), subject persons undertaking transactions or

establishing business relationships with politically exposed persons

residing in another Member State of the Community or in any other

jurisdiction shall>

(a) require the approval of senior management for

establishing such business relationships<

(b) ensure that the internal procedures include adequate

measures to establish the source of wealth and funds that are

involved in these business relationships or transactions<

(c) conduct enhanced ongoing monitoring of the business

relationships.

(7) For the purposes of the definition of ‘politically

exposed persons’ in regulation 2>

(a) the term ‘natural persons who are or have been

entrusted with prominent public functions’ shall include the

following>

(i) Heads of State, Heads of Government, Ministers

and Deputy and Assistant Ministers and Parliamentary

Secretaries<

(ii)

Members of Parliament<

(iii) members of the Courts or of other high-level

judicial bodies whose decisions are not subject to further

appeal, except in exceptional circumstances<

(iv) members of courts of auditors, Audit

Committees or of the boards of central banks<

(v) ambassadors, charges d’affaires and other high

ranking officers in the armed forces<

(vi) members of the administrative, management or

boards of State-owned corporations,

and where applicable, for the purposes of paragraphs

(i) to (v), shall include positions held at the Community or

international level<

(b) the term ‘immediate family members’ shall include

the following>

(i) the spouse, or any partner recognised by national

law as equivalent to the spouse<

(ii)

the children and their spouses or partners< and

(iii)

the parents<

(c) the term ‘persons known to be close associates’ shall

include the following>

(i) a natural person known to have joint beneficial

ownership of a body corporate or any other form of legal

arrangement, or any other close business relations with that

politically exposed person<

(ii) a natural person who has sole beneficial

ownership of a body corporate or any other form of legal

arrangement that is known to have been established for

the benefit of that politically exposed person.

(8) Without prejudice to the application of enhanced

customer due diligence measures on a risk sensitive basis, where a

person as mentioned in sub-regulation (6) has ceased to be entrusted

with a prominent public function for a period of at least twelve

months such person shall no longer be considered as a politically

exposed person.

(1) In accordance with the provisions of this regulation, Reliance on

performance by

subject persons may rely on a third party or another subject person third parties.

to fulfill the customer due diligence requirements provided for under

regulation 7(1)(a) to (c), provided that, notwithstanding the reliance

on a third party or other subject person, the relevant subject person

remains responsible for compliance with the requirements under

regulation 7(1)(a) to (c).

(2) For the purposes of this regulation, and without

prejudice to sub-regulation (11), a third party shall mean a person

undertaking activities equivalent to ‘relevant financial business’ or

‘relevant activity’ who is situated in a Member State of the

Community other than Malta or in a reputable jurisdiction and who

is subject to authorisation or to mandatory professional registration

recognised by law.

(3) Subject persons relying on a third party or another

subject person shall ensure that the third party or other subject person

shall make the information required in accordance with the provisions

under regulation 7(1)(a) to (c) immediately available to them.

(4) Subject persons relying on a third party or another

subject person shall further ensure that, upon request, the third party

or other subject person shall immediately forward to them relevant

copies of the identification and verification data and other relevant

documentation of the applicant for business or the beneficial owner

as required under these regulations.

(5) For the purposes of fulfilling the requirements under

regulation 7(1)(a) to (c), and in accordance with this regulation,

subject persons may rely on subject persons carrying out relevant

financial business as defined in these regulations.

(6) In accordance with the provisions of this regulation,

subject persons may, for the purposes of the requirements under

regulation 7(1)(a) to (c), recognise and accept the outcome of the

customer due diligence requirements carried out in accordance with

provisions equivalent to these regulations by a third party who

undertakes activities equivalent to those falling within the scope of

the definition of ‘relevant financial business’ under regulation 2(1),

with the exception of those persons whose main business is currency

exchange or money transmission or remittance services as defined

under paragraph (b) of that definition or their equivalent, even if the

documentation or data upon which these requirements have been

based are different to those under domestic requirements.

(7) Subject persons carrying out an activity falling with

the scope of paragraph (b) of the definition of ‘relevant financial

business’ and whose main business is currency exchange or money

transmission or remittance services may, in accordance with the

provisions of this regulation and for the purposes of the requirements

under regulation 7(1)(a) to (c), recognise and accept the outcome of

the customer due diligence requirements carried out in accordance

with provisions equivalent to these regulations by a third party who

undertakes currency exchange or money transmission or remittance

services, even if the documentation or data upon which these

requirements have been based are different to those under domestic

requirements.

(8) For the purposes of fulfilling the requirements under

regulation 7(1)(a) to (c), and in accordance with this regulation,

subject persons may rely on those subject persons carrying out a

relevant activity under paragraphs (a), (c), or (f) of the definition of

‘relevant activity’ under regulation 2.

(9) Further to sub-regulation (8) subject persons carrying

out a relevant activity under paragraphs (a), (c) or (f) of the definition

of ‘relevant activity’ under regulation 2 may, in accordance with

the provisions of this regulation and for the purposes of the

requirements under regulation 7(1)(a) to (c), recognise and accept

the outcome of the customer due diligence requirements carried out

in accordance with provisions equivalent to these regulations by a

third party who undertakes an activity equivalent to any of those in

paragraph (a), (c) or (f) of the definition of ‘relevant activity’ under

regulation 2, even if the documentation or data upon which these

requirements have been based are different to those under domestic

requirements.

(10) This regulation shall not apply>

(a) to outsourcing or agency relationships where, on the

basis of a contractual agreement, the outsourcing service

provider or agent is to be regarded as part of the subject person<

and

(b) for reliance on subject persons under paragraph (i) in

the definition of ‘relevant activity’ and subject persons under

paragraph (j) of the definition of ‘relevant financial business’

in regulation 2(1).

(11) Where the Financial Intelligence Analysis Unit

determines that a jurisdiction does not meet the criteria of a reputable

jurisdiction as defined in regulation 2 and the criteria for a third

party as established under sub-regulation (2), or where the Financial

Intelligence Analysis Unit is otherwise informed that a jurisdiction

is not considered as meeting the criteria of a reputable jurisdiction

as defined in regulation 2 and that for a third party as established

under sub-regulation (2), it shall, in collaboration with the relevant

supervisory authorities, prohibit subject persons from relying on

persons and institutions from that particular jurisdiction for the

performance of customer due diligence requirements under this

regulation.

(1) Subject persons shall retain the documents and Record keeping

procedures.

information specified in this regulation for use in any investigation

into, or an analysis of, possible money laundering or the funding of

terrorism activities by the Financial Intelligence Analysis Unit or

by other relevant competent authorities in accordance with the

provisions of applicable law.

(2) Record-keeping procedures maintained by a subject

person shall be deemed to be in accordance with the provisions of

this regulation if they make provision for the keeping, for the

prescribed period, of the following records>

(a) in relation to any business relationship that is formed

or an occasional transaction that is carried out, a record

indicating the nature of the evidence of the customer due

diligence documents required and obtained under procedures

maintained in accordance with these regulations, comprising a

copy of or the reference to the evidence required for the identity

and providing sufficient information to enable the details as to

a person’s identity contained in the relevant evidence to be re-

obtained<

(b) a record containing details relating to the business

relationship and to all transactions carried out by that person in

the course of an established business relationship or occasional

transaction which shall include the original documents or other

copies which are admissible in court proceedings<

(c) in relation to regulations 15(1) and 15(2) a record of

the findings of the examination of the background and purpose

of the relationships and transactions therein.

(3) For the purposes of sub-regulation (2), the prescribed

period shall be the period of at least five years commencing with -

(a) in relation to such records as are described in

paragraph (a), the date on which the relevant financial business

or relevant activity was completed< and

(b) in relation to such records as are described in

paragraphs (b) and (c), the date on which all dealings taking

place in the course of the transaction in question were

completed>

Provided that, in relation to records relating to an

occasional transaction or a series of occasional transactions, the

aforesaid period of at least five years shall commence with the date

on which the occasional transaction or the last of a series of

occasional transactions took place.

(4) For the purposes of sub-regulation (3)(a) the date on

which relevant financial business or relevant activity is completed

shall, as the case may be, be deemed to be the date of –

(a) in circumstances falling within Case 1 (negotiations),

the ending of the business relationship in respect of whose

formation the record under this regulation was compiled<

(b) in circumstances falling within Case 2 (suspicion), the

reporting of the suspicious transaction in accordance with

regulation 15, provided that the period of five years may be

extended as may be required by the Financial Intelligence

Analysis Unit<

(c) in the circumstances falling within Case 3 (single large

transaction), the carrying out of the transaction or the last of a

series of single large transactions in respect of which the record

under this regulation was compiled< and

(d) in circumstances falling within Case 4 (series of

transactions), the carrying out of the last transaction in a series

of transactions in respect of which the record under this

regulation was compiled,

and where the formalities necessary to end a business

relationship have not been observed, but a period of five years

has elapsed since the date on which the last transaction was

carried out in the course of that relationship, then the date of

that transaction shall be treated as the date on which the relevant

financial business or relevant activity was completed, provided

that the business relationship is immediately formally

terminated.

(5) Without prejudice to sub-regulations (2) to (4), a

casino licensee shall also maintain records in relation to all

identification processes under regulation 9 in accordance with the

relevant provisions of the Gaming Act.

(6) Subject persons shall ensure that, upon request, all

customer identification, due diligence records and transaction records

and other relevant information are made available on a timely basis

to the Financial Intelligence Analysis Unit and, as may be allowed

by law, to other relevant competent authorities, for the purposes of

the prevention of money laundering and the funding of terrorism.

(7) Subject persons carrying out relevant financial

business shall establish systems that enable them to respond

efficiently to enquiries from the Financial Intelligence Analysis Unit

or from supervisory or other relevant competent authorities, in

accordance with applicable law, as to>

(a) whether they maintain or have maintained during the

previous five years a business relationship with a specified

natural or legal person or persons< and

(b) the nature of that relationship.

(1) The Financial Intelligence Analysis Unit, subject Statistical data.

persons and supervisory and other competent authorities responsible

for combating money laundering or the funding of terrorism, shall

maintain comprehensive statistical data, as applicable, in accordance

with sub-regulation (2) and, upon request, such subject persons and

supervisory and other competent authorities, shall make this

statistical data available to the Financial Intelligence Analysis Unit

to enable it to review the effectiveness of the national systems.

(2) Comprehensive statistical data on matters relevant to

the effectiveness of national systems to combat money laundering

and the funding of terrorism maintained under sub-regulation (1)

shall, as a minimum, include>

(a) the number of suspicious transaction reports made to

the Financial Intelligence Analysis Unit<

(b) the number of suspicious transaction reports

forwarded by the Financial Intelligence Analysis Unit for further

investigation by the law enforcement agencies<

(c) the follow up given to these reports<

(d) the number of cases investigated<

(e) the number of persons prosecuted<

(f) the number of persons convicted for the offence of

money laundering or the funding of terrorism<

(g) details and value of property that has been frozen,

seized or confiscated<

(h) any other relevant statistical data as may justifiably

be required by the Financial Intelligence Analysis Unit in order

for it to fulfill its obligations under this regulation and the

Prevention of Money Laundering Act.

(3) The Financial Intelligence Analysis Unit shall publish

consolidated reviews of the statistical data gathered in accordance

with this regulation.

(4) The Financial Intelligence Analysis Unit shall,

wherever practicable and as may be allowed by the provisions of

the Act within the provisions of law, provide subject persons and,

where applicable, supervisory authorities with timely feedback on

the effectiveness of the suspicious transaction reports, other

information it receives under regulation 15, and the effectiveness of

the statistical data gathered under this regulation.

(1) Subject persons shall examine with special attention,

and to the extent possible, the background and purpose of any

complex or large transactions, including unusual patterns of

transactions, which have no apparent economic or visible lawful

purpose, and any other transactions which are particularly likely, by

their nature, to be related to money laundering or the funding of

terrorism, establish their findings in writing, and make such findings

available to the Financial Intelligence Analysis Unit and to the

relevant supervisory authority in accordance with applicable law.

(2) Subject persons shall pay special attention to business

relationships and transactions with persons, companies and

undertakings, including those carrying out relevant financial business

or a relevant activity, from a jurisdiction that does not meet the

criteria of a reputable jurisdiction as defined in regulation 2, and,

where the provisions of sub-regulation (1) apply to such transactions,

subject persons shall proceed as provided for in sub-regulation (1).

(3) Where a jurisdiction, as is mentioned in subregulation

(2), continues not to apply measures equivalent to those laid down

by these regulations, subject persons shall inform the Financial

Intelligence Analysis Unit which, in collaboration with the relevant

supervisory authority, may require such business relationship not to

continue or a transaction not to be undertaken or apply any other

counter-measures as may be adequate under the respective

circumstances.

(4) Internal reporting procedures maintained by a subject

person, shall be deemed to be in accordance with the provisions of

these regulations if they provide for -

(a) the appointment by the subject person of one of its

officers of sufficient seniority and command as the reporting

officer, to whom a report is to be made of any information or

other matter which gives rise to a knowledge or suspicion that

a person may have been, is or may be engaged in money

laundering or the funding of terrorism or that a transaction may

be related to money laundering or the funding of terrorism<

(b) consideration of such report by the reporting officer

or by another designated employee of the subject person, in the

light of all other relevant information, for the purpose of

determining whether or not the information or other matter

contained in the report does give rise to a knowledge or

suspicion that a person may have been, is or may be engaged in

money laundering or the funding of terrorism<

(c) reasonable access for the reporting officer or other

designated employee to any information held by the subject

person which may be of assistance for the purposes of

considering the report<

(d) a procedure whereby any knowledge or suspicion that

a person may have been, is or may be engaged in money

laundering or the funding of terrorism determined by the

reporting officer or other designated employee is reported in

accordance with sub-regulation (6)<

(e) notifying the Financial Intelligence Analysis Unit and

the relevant supervisory authority, where applicable, of the

details of the appointed reporting officer and any subsequent

changes thereto and the appointment of a designated employee

for the purposes of paragraphs (b) to (d)< and

(f) any employee designated by the subject person for

the purposes of paragraphs (b) to (d) shall be approved by the

reporting officer and shall work under his direction.

(5) A supervisory authority shall maintain internal

reporting procedures in accordance with the provisions of sub-

regulation (4), although the failure of a supervisory authority to

maintain such procedures in accordance with the provisions of this

regulation shall not constitute an offence but may be the subject of

internal disciplinary proceedings against the officials or employees

concerned.

(6) Where a subject person knows, suspects or has

reasonable grounds to suspect that a transaction may be related to

money laundering or the funding of terrorism, or that a person may

have been, is or may be connected with money laundering or the

funding of terrorism, or that money laundering or the funding of

terrorism has been, is being or may be committed or attempted, that

subject person shall, as soon as is reasonably practicable, but not

later than five working days from when the suspicion first arose,

disclose that information, supported by the relevant identification

and other documentation, to the Financial Intelligence Analysis Unit.

(7) Subject persons shall refrain from carrying out a

transaction that is suspected or known to be related to money

laundering or the funding of terrorism until they have informed the

Financial Intelligence Analysis Unit in accordance with this

regulation and, where to refrain in such a manner is not possible or

is likely to frustrate efforts of investigating or pursuing the

beneficiaries of the suspected money laundering or funding of

terrorism operations, subject persons shall accordingly inform the

Financial Intelligence Analysis Unit immediately the transaction is

effected.

(8) Where, following the consideration of an internal

report, the reporting officer or other designated employee determines

not to report in accordance with this sub-regulation for justifiable

reasons in accordance with paragraph (b) of sub-regulation (4), the

reporting officer shall record the reasons for such determination in

writing and, upon request, shall make it available to the Financial

Intelligence Analysis Unit or a supervisory authority acting on behalf

of the Financial Intelligence Analysis Unit in monitoring compliance

with these regulations.

(9) Where a supervisory authority, either in the course of

its supervisory work or in any other way, discovers facts or obtains

any information that could be related to money laundering or the

funding of terrorism, that supervisory authority shall, as soon as is

reasonably practicable, but not later than five working days from

when facts are discovered or information obtained, disclose those

facts or that information, supported by the relevant documentation

that may be available, to the Financial Intelligence Analysis Unit.

(10) Subject persons carrying out a relevant activity

under paragraph (a) or paragraph (c) of the definition of “relevant

activity” shall not be bound by the provisions of sub-regulation (6)

or sub-regulation (7) if such information is received or obtained in

the course of ascertaining the legal position for their client or

performing their responsibility of defending or representing that

client in, or concerning judicial proceedings, including advice on

instituting or avoiding proceedings, whether such information is

received or obtained before, during or after such proceedings.

(11) Where, following a submission of a disclosure as in

sub-regulation (6) or sub-regulation (7), or for any other reason as

is allowed by law, the Financial Intelligence Analysis Unit demands

information from the disclosing or any other subject person, that

subject person shall comply as soon as is reasonably practicable but

not later than five working days from when the demand is first made

unless that subject person makes representations justifying why the

requested information cannot be submitted within the said time and

the Financial Intelligence Analysis Unit, at its discretion and after

having considered such representations, extends such time as is

reasonably necessary to obtain the information, whereupon the

subject person shall submit the information requested within the time

as extended.

(12) Any bona fide communication or disclosure made

by a supervisory authority or by a subject person or by an employee

or director of such a supervisory authority or subject person in

accordance with these regulations shall not be treated as a breach of

the duty of professional secrecy or any other restriction (whether

imposed by statute or otherwise) upon the disclosure of information

and shall not involve that supervisory authority or subject person or

the directors or employees of such supervisory authority or subject

person in any liability of any kind.

(13) Any information disclosed under these regulations

shall be used only in connection with investigations of money

laundering and, or funding of terrorism activities.

(14) Any investigating, prosecuting, judicial or

administrative authority and subject persons shall protect and keep

confidential the identity of persons and employees who report

suspicions of money laundering or the funding of terrorism either

internally or to the Financial Intelligence Analysis Unit.

(15) A subject person who contravenes the provisions of

this regulation, or who fails to disclose information as is required

by sub-regulation (6) or sub-regulation (7) or who fails to submit

information demanded under sub-regulation (11), shall be liable to

an administrative penalty of not less than two hundred and fifty euro

(€250) and not more than two thousand five hundred euro (€2,500).

(16) Administrative penalties under sub-regulation (15)

shall be imposed by the Financial Intelligence Analysis Unit without

recourse to a court hearing and may be imposed either as a one time

penalty or on a daily cumulative basis until compliance, provided

that in the latter case the accumulated penalty shall not exceed twelve

thousand five hundred euro (€12,500).

(1) A subject person, a supervisory authority or any

official or employee of a subject person or a supervisory authority

who discloses to the person concerned or to a third party, other than

as provided for in this regulation, that an investigation is being or

may be carried out, or that information has been or may be transmitted

to the Financial Intelligence Analysis Unit pursuant to these

regulations shall be guilty of an offence and liable on conviction to

a fine (multa) not exceeding fifty thousand euro (€50,000) or to

imprisonment for a term not exceeding two years or to both such

fine and imprisonment.

(2) Without prejudice to sub-regulation (1), disclosures

made under the following circumstances shall not constitute a breach

of that sub-regulation>

(a) disclosures to the supervisory authority relevant to that

subject person or to law enforcement agencies in accordance

with applicable law<

(b) disclosures by the reporting officer of a subject person

who undertakes relevant financial business to the reporting

officer of another person or persons undertaking equivalent

activities and who form part of the same group of companies of

the former subject person, whether situated domestically, within

another Member State of the Community or in a reputable

jurisdiction<

(c) disclosures by the reporting officer of a subject person

who undertakes activities under paragraph (a) or paragraph (c)

of the definition of ‘relevant activity’ to the reporting officer

of another person or persons undertaking equivalent activities,

who perform their professional activities whether as employees

or not, but within the same legal person or within a larger

structure to which the subject person belongs and which shares

common ownership, management or compliance control,

whether situated domestically, within another Member State of

the Community or in a reputable jurisdiction<

(d) disclosures between the same professional category

of subject persons referred to in paragraph (b) and paragraph

(c) of this sub-regulation in cases related to the same customer

and the same transaction that involves two or more institutions

or persons, whether situated domestically, within another

Member State of the Community or in a reputable jurisdiction,

provided that such subject persons are subject to equivalent

obligations as regards professional secrecy and personal data

protection and, provided further that the information exchanged

shall only be used for the purposes of the prevention of money

laundering or the funding of terrorism.

(3) The fact that a subject person as referred to in

paragraph (c) of sub-regulation (2) is seeking to dissuade a client

from engaging in an illegal activity shall not constitute a disclosure

in breach of sub-regulation (1).

(4) Where the Financial Intelligence Analysis Unit

determines that a jurisdiction does not meet the criteria of a reputable

jurisdiction as defined in regulation 2, or where the Financial

Intelligence Analysis Unit is otherwise informed that a jurisdiction

is not considered as meeting the criteria of a reputable jurisdiction,

it shall, in collaboration with the relevant supervisory authorities,

prohibit subject persons from applying the provisions of sub-

regulation (2) with persons and institutions from that jurisdiction.

(1) The Financial Intelligence Analysis Unit, with the

concurrence of the relevant supervisory authority, may issue

procedures and guidance as may be required for the carrying into

effect of the provisions of these regulations, and which shall be

binding on persons carrying out relevant financial business or

relevant activity.

(2) A subject person who fails to comply with the

provisions of any procedures and guidance established in accordance

with sub-regulation (1) shall be liable to the administrative penalties

as provided for under regulation 15(15) and (16).

(3) In fulfilling its compliance supervisory

responsibilities under the Prevention of Money Laundering Act, the

Financial Intelligence Analysis Unit may monitor persons carrying

out a ‘relevant activity’, with the exception of those under paragraph

(g) and paragraph (h), on a risk-sensitive basis.

The Prevention of Money Laundering and Funding of

Revocation of L.N.

Terrorism Regulations, 2003 are hereby revoked>

Provided that such revocation shall not>

(a) affect the previous operation of the regulations so

revoked or anything done or suffered under those regulations<

(b) affect the institution, continuation or enforcement of

any inquiry, investigation or legal proceeding under the regulations

so revoked or the imposition of any penalty or punishment under

the provisions of those regulations.