Prevention of Money Laundering and Funding of Terrorism

L.N. 379 of 2024

PREVENTION OF MONEY LAUNDERING ACT

(CAP. 373)

Prevention of Money Laundering and Funding of Terrorism

(Amendment) Regulations, 2024

IN EXERCISE of the powers conferred by article 12 of the

Prevention of Money Laundering Act, the Minister responsible for

finance while acting on the advice of the Financial Intelligence

Analysis Unit, has made the following regulations:-

(1) The title of these regulations is the Prevention of

Money Laundering and Funding of Terrorism (Amendment)

Regulations, 2024 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".

(2) The scope of these regulations is to implement the

requirements of Article 38 of Regulation (EU) 2023/1113 of the

European Parliament and of the Council of 31 May 2023 on

information accompanying transfers of funds and certain crypto-assets

and amending Directive (EU) 2015/849 (recast).

(3) These regulations shall come into force on the 30th

December, 2024.

Regulation 2 of the principal regulations shall be amended

as follows

(a)

sub-regulation (1) thereof shall be amended as

follows

(i) paragraph (c) of the definition "competent

authority" shall be substituted by the following new

paragraph

"(c) the Commissioner for Tax and Customs;";

(ii) in paragraph (b) of the definition of

"correspondent relationship" immediately after the words

"securities transactions or funds transfers" there shall be

added the words "or relationships established for

transactions in crypto-assets or transfers of crypto-assets";

(iii) the definition "criminal activity" shall be

deleted;

(iv) immediately after the definition "customer"

there shall be added the following new definitions

" "crypto-asset" means a crypto-asset

as defined in point (5) of Article 3(1) of

Regulation (EU) 2023/1114, except when

falling within the categories listed in

Article 2(3) and (4) of the said Regulation

or when it otherwise qualifies as banknotes,

coins, scriptural money or electronic

money;

"crypto-asset service provider" means

a crypto-asset service provider as defined

in point (15) of Article 3(1) of Regulation

(EU) 2023/1114, when performing one or

more crypto-asset services as defined in

point (16) of Article 3(1) of t he s ai d

Regulation, with the exception of providing

advice on crypto-assets as referred to in

point (16)(h) of Article 3(1) of the said

Regulation and except when falling within

the categories listed in Article 2(2) of the

said Regulation

Provided that any person who is

providing any of the crypto-asset services

referred to above without the authorisation

required in accordance with Regulation

(EU) 2023/1114, when it should have been

so authorised, shall equally be considered

as a crypto-asset service provider for the

purposes of these regulations

Provided further that any person

who on the 30th December 2024 is licensed

under the Virtual Financial Assets Act to

provide one or more of the services listed in

the Second Schedule to the said Act and

benefits from any transitory period allowed

for authorisation to be granted under

Regulation (EU) 2023/1114, shall also be

considered as a crypto-asset service provider

for the duration of the said transitory

period;";

(v) in the definition "electronic money" the words

"Act, and excludes monetary value" shall be substituted by

the words "Act, including electronic money tokens, but

excludes monetary value";

(vi) immediately after the definition "electronic

money" as amended, there shall be added the following

new definition

" "electronic money token" means a type of

crypto-asset as defined in point (7) of Article 3(1) of

Regulation (EU) 2023/1114;";

(vii) the

definition

"European

Supervisory

Authorities" shall be deleted;

(viii) the definition "Member State" shall be deleted;

(ix) the definition "money laundering" shall be

deleted;

(x) the definition "occasional transaction" shall be

amended as follows

-

in paragraph (b) thereof the words

"Regulation (EU) 2015/847 of the European

Parliament and of the Council of 20 May 2015"

shall be substituted by the words "Regulation (EU)

2023/1113 of the European Parliament and of the

Council of 31 May 2023 on information

accompanying transfers of funds and certain crypto-

assets and amending Directive (EU) 2015/849

(recast)";

-

paragraph (f) thereof shall be substituted

by the following new paragraph

"(f) a

transaction,

independently

of

the

amount

involved, carried out by a subject

person whose activities are those

referred to in paragraphs (l) and (n) of

the definition "relevant financial

business", including when these

activities are carried out as established

in paragraph (o) of the aforementioned

definition;"; and

-

paragraph (g) thereof shall be deleted;

(xi) immediately after the definition "politically

exposed persons" there shall be added the following new

definition

"Regulation

(EU)

2023/1114"

means

Regulation (EU) 2023/1114 of the European

Parliament and of the Council of 31 May 2023 on

markets in crypto-assets, and amending Regulations

(EU) No 1093/2010 and (EU) No 1095/2010 and

Directives 2013/36/EU and (EU) 2019/1937; ";

(xii) the definition "relevant financial business"

shall be amended as follows

-

paragraph (l) thereof shall be substituted

by the following new paragraph

"(l) the activity of a crypto-asset

service provider;";

-

paragraph (m) thereof shall be deleted;

-

paragraph (n) thereof shall be substituted

by the following new paragraph

"(n) the issue of electronic

money tokens for offer to the public as

provided for under Title IV of

Regulation (EU) 2023/1114;";

(xiii) immediately after the definition "relevant

financial business" there shall be added the following new

definition

" "self-hosted address" means a self-hosted

address as defined in point (20) of Article 3 of

Regulation (EU) 2023/1113 of the European

Parliament and of the Council of 31 May 2023 on

information accompanying transfers of funds and

certain crypto-assets and amending Directive (EU)

2015/849 (recast);";

(xiv) the definition "subject person"

shall

be

substituted by the following new definition

" "subject person" means any natural or legal

person, as well as any other body or association of

persons, carrying out either relevant financial

business or relevant activity;";

(xv) paragraph (b) of the definition "trust and

company service provider" shall be substituted by the

following new paragraph

"(b) acts as a company service

provider, whether registered or authorised,

or required to be registered or authorised, in

accordance with the Company Service

Providers Act, including any natural or

legal person referred to in paragraph (a)

acting as a company service provider,

whether notified or required to be notified

in a c c o r d a n c e w i t h the Company

Service Providers Act;";

(xvi) the definition "VFA" shall be deleted; and

(xvii) in the definition "Work of Art" the words

"Work of Art" shall be substituted by the words

"work of art";

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

shall be added the following new sub-regulation

"(1a) Without prejudice to the provisions of sub-

regulation (1), unless the context otherwise requires, words

and phrases used in these regulations shall have the same

meaning as assigned to them in the Act. "; and

(c) sub-regulation (3) thereof shall be substituted by the

following new sub-regulation

"(3) The Financial Intelligence Analysis

Unit, in conjunction with the relevant supervisory

authority, may require entities which issue

electronic money, or provide payment services, or

qualify as crypto-asset service providers, and

which

(a) have their head office situated in

another Member State; and

(b) are established in Malta in

forms other than a branch,

to appoint a central contact point in Malta to

ensure, on behalf of the appointing entity,

compliance with these regulations and to

facilitate the monitoring of such compliance,

including by providing the Financial Intelligence

Analysis Unit and supervisory authorities with

information and documents upon request.".

Regulation 7 of the principal regulations shall be amended Amends

regulation 7 of

as follows

the principal

regulations.

(a) paragraph (b) of sub-regulation (2) thereof shall be

amended as follows

(i) the words "kept up-to-date:" shall be substituted

by the words "kept up-to-date."; and

(ii)

the proviso thereto shall be deleted; and

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

the following new sub-regulation

"(11) Without prejudice to any additional

obligation under Regulation (EU) 2023/1113 of

the European Parliament and of the Council of 31

May 2023 on information accompanying transfers

of funds and certain crypto-assets and amending

Directive (EU) 2015/849 (recast) or under the

National Interest (Enabling Powers) Act, subject

persons carrying out relevant financial business

involving the transfer of funds or the transfer of

crypto-assets as defined under the said

Regulation shall comply with Chapters II, III and

V of the said Regulation.".

In paragraph (a) of sub-regulation (2) of regulation 9 of the Amends

principal regulations, immediately after the words "of the Gaming regulation

the principal

Act" there shall be added the words "or of any regulations made or regulations.

directives issued thereunder".

Regulation 11 of the principal regulations shall be amended Amends

regulation 11 of

as follows

the principal

regulations.

(a)

immediately after sub-regulation (3) thereof there

shall be added the following new sub-regulation

"(3a) Where a correspondent relationship as

referred to in sub-regulation (3) involves the

execution of crypto-asset services as defined in

point (16) of Article 3(1) of Regulation (EU)

2023/1114, with the exception of point (h) of such

point, with a respondent institution from a

country other than a Member State that is

providing similar services, including the transfer

of crypto-assets, the crypto-asset service provider

shall

(a) carry out the measures referred

to in sub-regulation (3), with the reference

to "payable-through accounts" in paragraph

(e) of the said sub-regulation to be read

as a reference to "payable-through crypto-

asset accounts";

(b) determine

whether

the

respondent institution is licensed or

registered;

(c) document the reasons for the

termination of any such relationship where

this is attributable to reasons relating to

anti-money laundering or countering the

funding of terrorism; and

(d) without prejudice

to the

generality of the obligations arising from

other provisions of these regulations

(i) take into account any

information obtained through the

carrying out of the measures referred

above to implement appropriate

measures to mitigate the risks

associated with the respondent

institution; and

(ii) update any information

obtained through the carrying out of

the measures referred to above on a

regular basis or when new risks

emerge in relation to the respondent

institution."; and

(b)

immediately after sub-regulation (4) thereof there

shall be added the following new sub-regulation

"(4a) Crypto-asset service providers shall

ensure that the risk management procedures in

force in accordance with regulation 5(5)(a) are

conducive to identify and assess the risks of

money laundering and, or the funding of

terrorism associated with transfers of crypto-

assets directed to, or originating from a self-

hosted address, so that any such crypto-asset

service provider applies the necessary measures

to mitigate the identified risks including one or

more of the following measures

(a) taking risk-based measures to

identify, and verify the identity of, the

originator or beneficiary of a transfer made

to, or from a self-hosted address or the

beneficial owner of such originator or

beneficiary, including through reliance on

third parties;

(b) requiring additional information

on the origin and destination of the

transferred crypto-assets;

(c) conducting enhanced ongoing

monitoring of those transactions; and

(d) any other measures to mitigate

and manage the risks of money laundering

and terrorist financing.".

Sub-regulation (2) of regulation 16 of the principal Amends

regulation 16 of

regulations shall be amended as follows

the principal

regulations.

(a) in paragraph (b) thereof the words "other than a

business referred to in paragraphs (l), (m) and (n) under the

definition "relevant financial business" " shall be deleted; and

(b) in paragraph (d) thereof the words "other than a

business referred to in paragraphs (l), (m) and (n) under the

definition "relevant financial business" " shall be deleted.

In sub-paragraph (ii) of paragraph (b) of sub-regulation (4) Amends

of regulation 21 of the principal regulations the word "systemic" shall regulation

the principal

be substituted by the word "systematic".

regulations.

€0.81