Prevention of Money Laundering and Funding of Terrorism

L.N. 199 of 2021

PREVENTION OF MONEY LAUNDERING ACT

(CAP. 373)

Prevention of Money Laundering and Funding of Terrorism

(Amendment) Regulations, 2021

IN EXERCISE of the powers conferred by article 12 of the

Prevention of Money Laundering Act, the Minister for Finance,

acting on the advice of the Financial Intelligence Analysis Unit, has

made the following regulations:-

The title of these regulations is the Prevention of Money

Laundering and Funding of Terrorism (Amendment) Regulations,

2021, and these regulations shall be read and construed as one with

the Prevention of Money Laundering and Funding of Terrorism

Regulations, hereinafter referred to as "the principal regulations".

Sub-regulation (1) of regulation 2 of the principal

regulations shall be amended as follows

(a)

the definition "supervisory authority" shall be

amended as follows

(i) paragraph (c) thereof shall be substituted by

the following

"(c)

the Malta Business Registry;";

(ii) in paragraph (d) thereof, the words "acting

under the Gaming Act, and any regulations issued

thereunder" and the corresponding marginal note shall be

deleted;

(iii) in paragraph (e) thereof, the words "acting

under the Accountancy Profession Act" and the

corresponding marginal note shall be deleted; and

(iv) immediately after paragraph (e) thereof, there

shall be added the following new paragraphs

"(f) the Trade Licensing Unit limitedly

to its licensing function in relation to dealers in

precious metals and stones; and

(g) the Licensing Board established

under the Real Estate Agents, Property

Brokers and Property Consultants Act;"; and

(b) in paragraph (b) of the definition "trust and company

service provider", for the words "whether registered or notified,

or required to be registered or notified" there shall be

substituted the words "whether authorised, registered or

notified, or required to be authorised, registered or notified".

Regulation 4 of the principal regulations shall be amended Amends

regulation 4 of

as follows

the principal

regulations.

(a)

in sub-regulation (1) thereof, for the words "as

subject persons for the purposes of these regulations." there

shall be substituted the words "as subject persons for the

purposes of these regulations:";

(b) immediately after sub-regulation (1) thereof, there

shall be added the following proviso

"Provided that the Financial Intelligence Analysis

Unit may not make any determination as is referred to

hereabove in relation to a person who engages in the

remittance and transfer of money.";

(c)

in paragraph (f) of sub-regulation (2) thereof, for the

words "and is not generally offered to the public:" there shall be

substituted the words "and is not generally offered to the

public."; and

(d)

the proviso to sub-regulation (2) thereof shall be

deleted.

Regulation 11 of the principal regulations shall be Amends

regulation 11 of

amended as follows

the principal

regulations.

(a)

sub-regulations (12) and (13) thereof shall be

renumbered as sub-regulations (13) and (14) respectively;

(b) sub-regulation (11) thereof shall be substituted by

the following

"(11) Where occasional transactions or business

relationships or transactions involve non-reputable

jurisdictions in respect of which there is an international

call for counter-measures, subject persons shall inform in

writing the Financial Intelligence Analysis Unit, and shall

apply one or more of the following enhanced customer due

diligence measures

(a) carry out additional customer due

diligence measures;

(b) introduce

enhanced

reporting

mechanisms or systemic reporting of transactions;

(c) limit occasional transactions or business

relationships involving such non-reputable

jurisdictions.";

(c)

immediately after sub-regulation (11) thereof, as

substituted, there shall be added the following new sub-

"(12) Without prejudice to the provisions of sub-

regulation (11), the Financial Intelligence Analysis Unit or

the relevant supervisory authority shall, in the situations

referred to in sub-regulation (11), apply one or more of the

following counter-measures

(a) refuse the establishment in Malta of

branches, representative offices or subsidiaries of

persons or entities undertaking activities equivalent

to relevant financial business or relevant activity

which are situated in such non-reputable

jurisdictions, or otherwise take into account the

fact that that person or entity is situated in a non-

reputable jurisdiction that has deficiencies in its

anti-money laundering and counter funding of

terrorism regime;

(b) prohibit

subject

persons

from

establishing branches or representative offices in

such a non-reputable jurisdiction or otherwise take

into account the fact that the branch or

representative office would be situated in a non-

reputable jurisdiction that has deficiencies in its

anti-money laundering and counter funding of

terrorism regime;

(c) carry out increased compliance

monitoring or require increased external audit

requirements on branches and subsidiaries, of

persons and entities referred to in sub-regulation

(11)(a), established in Malta;

(d) require external audit requirements on

subject persons forming part of a group in respect

of their branches or subsidiaries in such non-

reputable jurisdictions; and

(e) require subject persons carrying out

relevant financial business to review, amend or

terminate correspondent relationships with

respondent institutions established in such non-

reputable jurisdiction."; and

(d) in sub-regulation (13) thereof, as renumbered, for

the words "The provisions of the proviso to sub-regulation (11)"

there shall be substituted the words "The provisions of sub-

regulation (12)".

Sub-regulation (2) of regulation 13 of the principal Amends

regulation 13 of

regulations shall be amended as follows

the principal

regulations.

(a)

in paragraph (a) thereof, for the words

"documentation, data or information described in paragraph (a)"

there shall be substituted the words "documentation, data or

information described in paragraph (a) thereof";

(b) paragraph (b) thereof shall be substituted by the

following

"(b) in relation to the supporting evidence and

records described in paragraph (b) thereof, the date when

the business relationship ends or when the occasional

transaction is carried out, and where the formalities

necessary to end a business relationship could not be

observed, the date on which the last transaction in the

course of that business relationship was carried out;"; and

(c)

the second proviso thereto shall be substituted by the

following

"Provided further that the period of five years may

be further extended, up to a maximum retention period of

ten years, where, after a thorough assessment of the

necessity and proportionality of such further extension, it

is concluded that the extension is justified as necessary for

the purposes of the prevention, detection, analysis and

investigation of money laundering or funding of terrorism

activities by the Financial Intelligence Analysis Unit,

relevant supervisory authorities or law enforcement

agencies.".

Sub-paragraph (ii) of paragraph (b) of sub-regulation (4) of

regulation 21 of the principal regulations shall be substituted by the

following new sub-paragraph

"(ii) in the case of a subject person carrying out a relevant

financial business, an administrative penalty of not more than five

million euro (€5,000,000) and, where the imposition of an

administrative penalty of five million euro (€5,000,000) is deemed

not to be effective and dissuasive in the view of the serious, systemic

and repeated nature of the contraventions committed, an

administrative penalty of not more than ten per centum (10%) of the

total annual turnover according to the latest available approved

annual financial statements

Provided that where the subject person is a parent

undertaking or a subsidiary of a parent undertaking which is required

to prepare consolidated accounts, the relevant total annual turnover

shall be the total annual turnover resulting from the latest available

consolidated accounts approved by the ultimate parent undertaking;

and".

€0.45