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PREVENTION OF MONEY LAUNDERING AND FUNDING OF TERRORISM REGULATIONS
Table of Provisions (27)
Statutory Text (27 Articles)
AND FUNDING OF TERRORISM
SUBSIDIARY LEGISLATION 373.01
PREVENTION OF MONEY LAUNDERING AND
FUNDING OF TERRORISM REGULATIONS
1st January, 2018
LEGAL NOTICE 372 of 2017,as amended by Legal Notice 430 of 2018, 77
of 2019 and 26 and 214 of 2020,199 and 313 of 2021, 379 of 2024 and 82
of 2026 * .
(1)
The title of these regulations is the Prevention of
Money Laundering and Funding of Terrorism Regulations.
(2) The objective of these regulations is to implement the
provisions of Directive (EU) 2015/849 of the European Parliament
and of the Council of 20 May 2015 on the prevention of the use of the
financial system for the purposes of money laundering or terrorist
financing.
(1)
In these regulations, unless the context
otherwise requires
"the Act" means the Prevention of Money Laundering Act;
"anti-money laundering and counter-funding of terrorism
obligations" means the obligations imposed on subject persons and
arising from the Act, these regulations or under any binding
procedures, guidance, instructions, directives, orders or directions
issued under the Act or these regulations;
"beneficial owner" means any natural person or persons who
ultimately own or control the customer and, or the natural person or
persons on whose behalf a transaction or activity is being conducted,
(a)
in the case of a body corporate or a body of
persons, the beneficial owner shall consist of any natural
person or persons who ultimately own or control that body
corporate or body of persons through direct or indirect
ownership of twenty-five per centum (25%) plus one (1) or
more of the shares or more than twenty-five per centum (25%)
of the voting rights or an ownership interest of more than
twenty-five per centum (25%) in that body corporate or body
of persons, including through bearer share holdings, or
through control via other means, other than a company that is
listed on a regulated market which is subject to disclosure
requirements consistent with European Union law or
equivalent international standards which ensure adequate
transparency of ownership information
*Vide Regulation 6 of Legal Notice 82 of 2026.
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Provided that a shareholding of twenty-five per
centum (25%) plus one (1) share or more, or the holding of an
ownership interest or voting rights of more than twenty-five
per centum (25%) in the customer shall be an indication of
direct ownership when held directly by a natural person, and of
indirect ownership when held by one or more bodies corporate
or body of persons or through a trust or a similar legal
arrangement, or a combination thereof
Provided further that if, after having exhausted
all possible means and provided there are no grounds of
suspicion, no beneficial owner in terms of this paragraph has
been identified, subject persons shall consider the natural
person or persons who hold the position of senior managing
official or officials to be the beneficial owners, and shall keep a
record of the actions taken and any difficulties encountered to
determine who the beneficial owner is in terms of this
paragraph.
(b)
in the case of trusts the beneficial owner shall
consist of
(i)
the settlor or settlors;
(ii)
the trustee or trustees;
(iii)
the
protector
or
protectors,
where
applicable;
(iv) the beneficiaries or
the
class
of
beneficiaries as may be applicable; and
(v)
any other natural person exercising
ultimate control over the trust by means of direct or
indirect ownership or by other means;
(c)
in the case of legal entities such as foundations,
and legal arrangements similar to trusts, the beneficial owner
shall consist of the natural person or persons holding equivalent
or similar positions to those referred to in paragraph (b);
''business relationship'' means a business, professional or
commercial relationship between two or more persons, at least one of
which is acting in the course of either relevant financial business or
relevant activity, and which has, or is expected to have at the time
when the contact is established, an element of duration;
''casino'' means any premises where gaming services are made
available to the public by a gaming licensee and in relation to which a
concession in terms of article 11(3)(a) of the Gaming Act has been
granted, and "casino licensee" in these regulations shall be construed
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accordingly;
''collective investment scheme'', and ''units'' have the same
meanings as are assigned to these terms respectively in the
Investment Services Act;
''company'' has the same meaning as is assigned to the term in
the Companies Act;
"competent authority" means
(a)
any supervisory authority;
(b)
the Comptroller of Customs when carrying out
duties under any regulation that may be issued or are in force
from time to time relating to the cross-border movement of
cash and other financial instruments;
(c)
the Commissioner for Tax and Customs;
(d)
the
Commissioner
for
Voluntary
Organisations;
(e)
the Asset Recovery Bureau;
(f)
the Security Service;
(g)
the Sanctions Monitoring Board; and
(h)
the
Internal
Audit
and
Investigations
Directorate;
"correspondent relationship" means
(a)
the provision of banking services by one bank
as the correspondent to another bank as the respondent,
including providing a current or other liability account and
related services, such as cash management, international funds
transfers, cheque clearing, payable-through accounts and
foreign exchange services;
(b)
the relationship between and among
institutions carrying out relevant financial business and
activities equivalent thereto, including where similar services
to those under paragraph (a) are provided by a correspondent
institution to a respondent institution, and including
relationships established for securities transactions or funds
transfers or relationships established for transactions in crypto-
assets or transfers of crypto-assets;
"customer" means a legal or natural person who seeks to form,
or who has formed a business relationship, or seeks to carry out an
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occasional transaction with a person who is acting in the course of
either relevant financial business or relevant activity;
"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 h e 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;
"electronic money" has the same meaning as is assigned to the
term in the Financial Institutions Act, including electronic money
tokens, but excludes monetary value that
(a)
is stored on instruments that can be used to acquire
goods or services only in the premises used by the
issuer or under a commercial agreement with the
issuer either within a limited network of service
providers or for a limited range of goods or services;
or
(b)
is used to make payment transactions executed by
means of any telecommunication, digital or IT
device, where the goods or services purchased are
delivered to and are to be used through
telecommunication, digital or IT device, provided
that the telecommunication, digital or IT operator
does not act only as an intermediary between the
payment service user and the supplier of the goods
AND FUNDING OF TERRORISM
and services;
"electronic money token" means a type of crypto-asset as
defined in point (7) of Article 3(1) of Regulation (EU) 2023/1114;
''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;
"gaming licensee" means any person licensedin terms of the
Gaming Authorisation Regulations to provide a gaming service;
"gaming service" means making a licensable game which is a
game of chance as defined in the Gaming Act, available for
participation by players, and, without prejudice to the preceding
phrase, "licensable game" shall have the same meaning as is assigned
to it in the Gaming Definitions Regulations and the subsidiary
legislation existing thereunder;
''group'' has the same meaning as is assigned to the term in the
Companies Act;
"long term insurance business" means the business of
insurance of any of the classes specified in the Second Schedule to
the Insurance Business Act;
"management body" means the board of directors or, where
there is no board of directors, the body having equivalent powers and
functions;
''non-reputable jurisdiction'' means any jurisdiction having
deficiencies in its national anti-money laundering and counter
funding of terrorism regime or having inappropriate and ineffective
measures for the prevention of money laundering and the funding of
terrorism, taking into account any accreditation, declaration, public
statement or report issued by an international organisation which lays
down internationally accepted standards for the prevention of money
laundering and for combating the funding of terrorism or which
monitors adherence thereto, or is a jurisdiction identified by the
European Commission in accordance with Article 9 of Directive
(EU) 2015/849;
''occasional transaction'' means any transaction or service
carried out or provided by a subject person for his customer, other
than a transaction or service carried out or provided within a business
relationship, and includes the following
(a)
a transaction amounting to fifteen thousand
euro (€15,000) or more, carried out in a single operation or in
AND FUNDING OF TERRORISM
several operations which appear to be linked;
(b)
a transfer of funds as defined 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) which exceeds one thousand euro (€1,000) in
a single operation or in several operations which appear to be
linked;
(c)
a transaction in cash amounting to ten thousand
euro (€10,000) or more, carried out by a natural or legal person
trading in goods in a single operation or in several operations
which appear to be linked;
(d)
a transaction amounting to two thousand euro
(€2,000) or more, carried out by gaming or casino licensees in a
single operation or in several operations which appear to be
linked;
(e)
a transaction amounting to ten thousand euro
(€10,000) or more, carried out by a natural or legal person
trading in works of art or acting as intermediary in the sale of
works of art, in a single operation or in several operations
which appear to be linked;
(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;
(g)
Repealed by Legal Notice 379 of 2024;
(h)
the provision of material aid, assistance or
advice on tax matters;
(i)
the formation of a company, trust, foundation or
a similar structure;
(j)
the provision, by real estate agents, of
intermediation services in relation to the letting of immovable
property where the monthly rent amounts to ten thousand euro
(€10,000) or more; and
(k)
the storage, by free ports, of works of art the
value of which is equal to or exceeds ten thousand euro
(€10,000).
"politically exposed persons" means natural persons who are or
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have been entrusted with prominent public functions in or outside
Malta, other than middle ranking or more junior officials. For the
purposes of this definition the term "natural persons who are or have
been entrusted with prominent public functions" means
(a)
Heads of State, Heads of Government,
Ministers, Deputy or Assistant Ministers, and Parliamentary
Secretaries;
(b)
Members of Parliament or similar legislative
bodies;
(c)
Members of the governing bodies of political
parties;
(d)
Members
of
superior,
supreme,
and
constitutional courts or of other high-level judicial bodies
whose decisions are not subject to further appeal, except in
exceptional circumstances;
(e)
Members of courts of auditors or of the boards
of central banks;
(f)
Ambassadors, charges d’affaires and high
ranking officers in the armed forces;
(g)
Members of the administrative, management or
supervisory boards of State-owned enterprises;
(h)
Anyone exercising a function equivalent to
those set out in paragraphs (a) to (f) within an institution of the
European Union or any other international body; and
(i)
Anyone entrusted with a prominent public
function listed in an order issued by the Minister in terms of
article 12(5) of the Act from time to time, or included in any
other equivalent list issued by any other jurisdiction or
international organisation.
"real estate agent" means any person who is licensed or required
to be licensed as a property broker or as a real estate agent under the
Property Market Agency Act
Provided that where two (2) or more real estate agents or
two (2) or more property brokers are authorised in accordance with
the Property Market Agency Act to carry out their activity through a
partnership as defined under the said Act, for the purposes of these
regulations the real estate agent shall be deemed to be the
partnership;
"Regulation (EU) 2023/1114" means Regulation (EU) 2023/1114
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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;
''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) and any
other person that undertakes to provide, directly, or through
other persons to whom he is related, material aid, assistance or
advice on tax matters;
(b)
real estate agents , including when acting as
intermediaries in relation to the letting of immovable property
where the monthly rent amounts to ten thousand euro (€10,000)
or more;
(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 carrying out 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
companies, trusts, foundations or similar structures, or
when acting as a trust or company service provider;
(d)
trust and company service providers;
(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)
casino licensees;
AND FUNDING OF TERRORISM
(g)
gaming licensees;
(h)
any natural or legal person trading in goods,
but only where a transaction involves payment in cash in an
amount equal to ten thousand euro (€10,000) or more whether
the transaction is carried out in a single operation or in several
operations which appear to be linked;
(i)
any natural or legal person trading in works of
art or acting as intermediary in the sale of works of art,
including when this is carried out by art galleries, auctioneers
and freeports, where the value of the transaction or a series of
linked transactions amounts to ten thousand euro (€10,000) or
more; and
(j)
free ports when storing works of art the value
of which amounts to ten thousand euro (€10,000) or more, or
when trading in works of art or acting as intermediaries in the
sale of works of art as envisaged under paragraph (i);
''relevant financial business'' means –
(a)
any business of banking carried on by a person
or institution who is for the time being licensed, or required to
be licensed, 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 licensed, or
required to be licensed, under the provisions of the Financial
Institutions Act;
(c)
any long term insurance business other than
business of reinsurance 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;
(d)
any insurance intermediary activities carried
out by an insurance intermediary or by a tied insurance
intermediary related to long-term insurance business which
person or institution is enrolled or required to be enrolled
under the provisions of the Insurance Distribution Act, other
than a natural person who is registered or enrolled and acts on
behalf of a tied insurance intermediary or a person or
institution enrolled as a tied insurance intermediary that does
not collect premiums, or other amounts intended for the
policyholder or the beneficiary;
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(e)
any long term insurance business other than
business of reinsurance carried on by a person in accordance
with the Insurance Business (Captive Insurance Undertakings
and Captive Reinsurance Undertakings) Regulations, by a cell
company in accordance with the provisions of the Companies
Act (Cell Companies Carrying on Business of Insurance)
Regulations or by an incorporated cell company and an
incorporated cell in accordance with the provisions of the
Companies Act (Incorporated Cell Companies Carrying on
Business of Insurance) Regulations;
(f)
investment services carried on by a person or
institution licensed or required to be licensed under the
provisions of the Investment Services Act;
(g)
administration services to collective investment
schemes provided by a person or institution recognised or
required to be recognised under the provisions of the
Investment Services Act other than administration services
provided by recognised incorporated cell companies in
accordance with the Companies Act (Recognised Incorporated
Cell Companies) Regulations;
(h)
a collective investment scheme marketing its
units or shares, licensed, recognised or notified, or required to
be licensed, recognised or notified, under the provisions of the
Investment Services Act;
(i)
any activity other than that of a retirement
scheme or a retirement fund, carried on in relation to a
retirement scheme, by a person or institution licensed or
required to be licensed under the provisions of the Retirement
Pensions Act and for the purpose of this paragraph, ''retirement
scheme'' and ''retirement fund'' shall have the same meaning as
is assigned to them in the Retirement Pension Act;
(j)
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;
(k)
safe custody services provided by any person or
institution not covered under paragraph (a) or (f);
(l)
the activity of a crypto-asset service provider;
(m)
Repealed by Legal Notice 379 of 2024;
(n)
the issue of electronic money tokens for offer to
the public as provided for under Title IV of Regulation (EU)
2023/1114;
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(o)
any activity under paragraphs (a) to (n) carried
out by branches established in Malta and whose head offices
are situated outside Malta
"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);
"senior management" means an officer or employee with
sufficient knowledge of the subject person's money laundering and
terrorist financing risk exposure and sufficient seniority to take
decisions affecting its risk exposure, and need not be a member of the
management body;
''shell institution'' means an institution carrying out activities
equivalent to relevant financial business, 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 natural or legal person, as well as
any other body or association of persons, 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 Malta Business Registry;
(d)
the Malta Gaming Authority;
(e)
the Accountancy Board;
(f)
the Trade Licensing Unit limitedly to its
licensing function in relation to dealers in precious metals and
stones; and
(g)
the Property Market Agency.
''terrorism'' means any act of terrorism as defined in article
328A of the Criminal Code;
''trust and company service provider'' means any natural or
legal person who
(a)
provides trustee or other fiduciary services,
whether authorised or required to be authorised, in terms of the
AND FUNDING OF TERRORISM
Trusts and Trustees Act, other than persons acting as trustees in
terms of article 43A of the said Act;
(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;
(c)
arranges, by way of business, for another person
to act as a trustee of an express trust or a similar legal
arrangement;
(d)
arranges, by way of business, for another person
to act as a fiduciary shareholder for another person other than a
company listed on regulated market that is subject to disclosure
requirements in conformity with the Financial Markets Act or
subject to equivalent international standards.
"work of art" means an original, unique and tangible
object of any kind or material that is created or executed by
hand or a limited edition reproduction thereof, and which is
considered to have an imaginative, expressive and aesthetic
function, value or appeal, irrespective of artistic quality, and
provided that the said criteria are met includes the following
(a)
paintings,
drawings,
etchings
and
decorative
plaques;
(b)
engravings, lithographs or other prints;
(c)
works of sculpture or statuary;
(d)
tapestries;
(e)
photographs printed and signed by the
photographer, including limited edition prints made
from the exposure; and
(f)
ceramic works.
(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
(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
AND FUNDING OF TERRORISM
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
Commission accordingly.
(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.
(4) 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.
(5) The Financial Intelligence Analysis Unit shall cooperate
with the European Supervisory Authorities for the purposes of
Directive (EU) 2015/849 and it shall provide the European
Supervisory Authorities with any information which is necessary to
carry out their duties under Directive (EU) 2015/849 and under
Regulation (EU) No 1093/2010, Regulation (EU) No 1094/2010 and
Regulation (EU) No 1095/ 2010.
(1)
The Financial Intelligence Analysis Unit, in
conjunction with the relevant supervisory authority may, following
an appropriate risk assessment, determine that these regulations are
not to apply, in whole or in part, to specific gaming services on the
basis of proven low risk of money laundering and funding of
terrorism posed by the nature and, where appropriate, the scale of
operations of such services.
(2) Any exemption in terms of sub-regulation (1) shall be
revoked if the Financial Intelligence Analysis Unit, in conjunction
with the relevant supervisory authority, determines that the risk of
money laundering or funding of terrorism posed by such gaming
services can no longer be considered as low.
(3)
Any exemption or revocation in terms of this regulation
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shall be communicated to the European Commission.
(4) The provisions of sub-regulation (1) shall not be
applicable to casinos and/or to any casino type games provided via
electronic means of distance communication.
(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, are
not to be considered as subject persons for the purposes of these
regulations
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.
(2) For the purpose of reaching a determination under sub-
regulation (1) the Financial Intelligence Analysis Unit shall consider a
legal or natural person to be engaging in a financial activity on an
occasional or very limited basis where all of the following criteria are
met
(a)
the total annual 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 directly
related to the main activity;
(e)
the main activity is not an activity falling within
the definition "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.
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(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.
(6) The Financial Intelligence Analysis Unit shall inform
the European Commission accordingly of any determination made
under sub-regulation (1) or its subsequent revocation under sub-
regulation (4).
(1)
Every subject person shall take appropriate
steps, proportionate to the nature and size of its business, to identify
and assess the risks of money laundering and funding of terrorism
that arise out of its activities or business, taking into account risk
factors including those relating to customers, countries or
geographical areas, products, services, transactions and delivery
channels and shall furthermore take into consideration any national
or supranational risk assessments relating to risks of money
laundering and the funding of terrorism.
(2) Where the Financial Intelligence Analysis Unit
considers the risk of money laundering and the funding of terrorism
inherent in any particular relevant activity or relevant financial
business to be clear and understood, it may exempt subject persons
carrying out such relevant activity or relevant financial business from
the obligation to perform risk assessments under this regulation.
(3) The risk assessment referred to in sub-regulation (1)
shall be properly documented, and shall be made available to the
Financial Intelligence Analysis Unit and any other relevant
supervisory authority upon demand.
(4) Subject persons shall ensure that the risk assessment
carried out in terms of sub-regulation (1) is regularly reviewed and
kept up-to-date.
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(5)
Every subject person shall: –
(a)
have in place and implement the following
measures, policies, controls and procedures, proportionate to
the nature and size of its business, which address the risks
identified as a result of the risk assessment referred to in sub-
regulation (1)
(i)
customer due diligence measures, record-
keeping procedures and reporting procedures;
(ii) risk management measures including
customer acceptance policies, customer risk assessment
procedures, internal controls, compliance management,
communications, employee screening policies and
procedures;
(b)
take appropriate and proportionate measures
from time to time for the purpose of making employees aware
of –
(i)
the measures, policies, controls and
procedures under the provisions of paragraph (a) and any
other relevant policies that are maintained by the subject
person; and
(ii) the provisions of the Prevention of
Money Laundering Act and of these regulations; of the
Sub-Title IV A "Of Acts of Terrorism, Funding of
Terrorism and Ancillary Offences" of Title IX of Part II
of Book First of the Criminal Code; and of data
protection requirements;
(c)
appoint, where appropriate with regard to the
nature and size of the business, an officer at management level
whose duties shall include the monitoring of the day-to-day
implementation of the measures, policies, controls and
procedures adopted under this regulation;
(d)
implement, where appropriate with regard to the
size and nature of the business, an independent audit function
to test the internal measures, policies, controls and procedures;
(e)
provide employees from time to time with
training in the recognition and handling of operations and
transactions which may be related to proceeds of criminal
activity, money laundering or the funding of terrorism;
(f)
monitor and where appropriate enhance the
measures, policies, controls and procedures adopted to better
achieve their intended purpose.
AND FUNDING OF TERRORISM
(6) To the extent that it may be applicable, any measures,
policies, controls, procedures and changes thereto shall be adopted
and implemented following senior management approval, and, where
applicable, the management body of the subject person may identify
one of its members who is to be responsible for the implementation of
these measures, policies, controls and procedures.
(7) In this regulation, the term ''employees'' means those
employees whose duties include the handling of either relevant
financial business or relevant activity.
(8) 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.
(1)
Subject persons that are part of a group shall be
required to implement group-wide policies and procedures that
include the measures established under regulation 5(5), as well as
policies and procedures on data protection and the sharing of
information within the group for the prevention of money laundering
and the funding of terrorism. These policies and procedures shall be
implemented effectively at the level of branches and majority-owned
subsidiaries in Member States and third countries
Provided that, unless otherwise instructed by the
Financial Intelligence Analysis Unit and subject to the provisions of
regulation 16, a subject person that is part of a group and discloses
information in accordance with regulation 15(3) to the Financial
Intelligence Analysis Unit, shall share that disclosed information
within the group for the purposes of preventing and detecting money
laundering and the funding of terrorism.
(2) Subject persons having branches or majority-owned
subsidiaries established in another Member State shall ensure that
those branches or majority-owned subsidiaries comply with the
national provisions of that Member State, transposing the provisions
of Directive (EU) 2015/849.
(3) Subject persons having branches or majority-owned
subsidiaries established in third countries where the anti-money
laundering and counter-funding of terrorism measures are less
stringent than those under these regulations shall ensure that those
branches or majority-owned subsidiaries implement the provisions of
these regulations in so far as that third country’s legislation permits
the implementation of such provisions.
(4) Where subject persons have branches or majority-owned
subsidiaries established in third countries, and the legislation of such
third countries does not permit the implementation of the policies and
procedures under sub-regulation (1), subject persons shall ensure that
AND FUNDING OF TERRORISM
those branches and majority-owned subsidiaries apply additional
measures to effectively handle the risk of money laundering and
funding of terrorism and shall immediately inform the Financial
Intelligence Analysis Unit about these circumstances and the
measures taken
Provided that where the additional measures are not
adequate, the Financial Intelligence Analysis Unit shall, in
collaboration with any relevant supervisory authority, exercise
additional supervisory actions, including requiring those subject
persons not to establish or to terminate existent business relationships
and not to undertake transactions and, where necessary require those
subject persons to close down their operations in the third country.
(5) Where the Financial Intelligence Analysis Unit is in
possession of information in accordance with sub-regulation (4) it
shall, where applicable, inform the relevant supervisory authorities,
the relevant supervisory authorities of the other Member States, and
the European Supervisory Authorities, and shall seek to cooperate and
coordinate its actions with such relevant supervisory authorities and
the European Supervisory Authorities, as necessary.
(6) In fulfilling their obligations under sub-regulation (4),
subject persons carrying out relevant financial business shall comply
with any regulatory technical standards developed by the European
Supervisory Authorities in accordance with Article 45(6) of Directive
(EU) 2015/849 which may be adopted by the European Commission
setting out the minimum action to be taken.
(1)
Customer due diligence measures shall consist
in
(a)
the identification of the customer, and the
verification of the identity of the customer on the basis of
documents, data or information obtained from a reliable and
independent source, including, where available, electronic
identification means issued under electronic identification
schemes, or relevant trust services as set out in Regulation (EU)
No 910/2014, or any other secure, remote or electronic
identification process approved by the Financial Intelligence
Analysis Unit under procedures issued in terms of regulation
17
Provided that where the customer is a body
corporate, a body of persons, or any other form of legal entity
or arrangement, subject persons shall also verify the legal
status of the customer and shall also identify all directors and,
where the customer does not have directors, all such other
persons vested with its administration and representation
Provided further that where the customer is a
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body corporate, a body of persons or any other form of legal
entity incorporated in a Member State or a trust or similar legal
arrangement administered in a Member State, that is subject to
the registration of beneficial owner information, subject
persons shall also obtain proof that such beneficial ownership
information has been duly registered with a designated
beneficial ownership register.
(b)
the identification, where applicable, of the
beneficial owners, and the taking of reasonable measures to
verify their identity so that the subject person is satisfied of
knowing who the beneficial owners are, including, in the case
of a body corporate, foundations, trusts and similar legal
arrangements, the taking of reasonable measures to understand
the ownership and control structure of the customer;
(c)
assessing and, as appropriate, obtaining
information on the purpose and intended nature of the business
relationship, and establishing the business and risk profile of
the customer;
(d)
conducting ongoing monitoring of the business
relationship.
(2) The ongoing monitoring of a business relationship for
the purposes of sub-regulation (1) shall consist in
(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 reviewed and kept
up-to-date.
(3) Where a person purports to act on behalf of a customer,
in addition to identifying and verifying the identity of the customer
and, where applicable, the beneficial owner, subject persons shall
ensure that such person is duly authorised in writing to act on behalf
of the customer and shall identify and verify the identity of that
person.
(4) Subject persons shall not keep anonymous accounts or
anonymous safe-deposit boxes, or accounts or safe-deposit boxes in
fictitious names.
(5) Without prejudice to the provisions of regulation 8,
customer due diligence measures shall be applied to all customers
AND FUNDING OF TERRORISM
when
(a)
establishing a business relationship;
(b)
carrying out an occasional transaction; and
(c)
the subject person has knowledge or suspicion
of proceeds of criminal activity, money laundering or the
funding of terrorism, regardless of any derogation, exemption
or threshold.
(6)
Customer due diligence measures under this regulation
shall also be applied, at appropriate times, to existing customers on a
risk-sensitive basis and also whenever any of the following
circumstances occur
(a)
when the subject person becomes aware that the
relevant circumstances surrounding a business
relationship have changed; or
(b)
when the subject person has a legal duty to contact
the customer for the purpose of reviewing and
updating any information relating to the beneficial
owners, including when the subject person has such
a duty in terms of the Cooperation With Other
Jurisdiction On Tax Matters Regulations.
(7) Customer due diligence measures under these regulations
shall be repeated whenever, in relation to a business relationship,
doubts arise about the veracity or adequacy of the previously obtained
customer identification information.
(8) The extent of the customer due diligence measures shall
be commensurate to the risks of money laundering and funding of
terrorism identified through the risk assessments carried out in terms
of regulation 5 and may vary from case to case.
(9) Subject persons providing long-term insurance business
shall, in addition to identifying and verifying the identity of the
customer and, where applicable, the beneficial owner in terms of sub-
regulations (1)(a) and (b), carry out the following customer due
diligence measures on the beneficiaries of long-term insurance
policies
(a)
where the beneficiaries are specifically named
natural persons, legal entities or arrangements, subject persons
shall identify such beneficiaries;
(b)
where the beneficiaries are designated by
characteristics, class or other means, subject persons shall
obtain sufficient information concerning those beneficiaries to
AND FUNDING OF TERRORISM
be able to identify them at the time of payout;
(c)
where the beneficiaries assign any of their
rights vested under the policy, subject persons shall, at the time
of becoming aware of the assignment, identify the natural
persons, legal entities or arrangements receiving for their own
benefit the value of the policy assigned;
(d)
verify the identity of the beneficiaries at the
time of payout.
(10) A customer, or any person purporting to act on his
behalf, 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) 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.
(1)
The Financial Intelligence Analysis Unit, with
the concurrence of the relevant supervisory authority may, on the basis
of an appropriate risk assessment which demonstrates a low risk of
money laundering and funding of terrorism, exempt subject persons
issuing electronic money from the carrying out of customer due
diligence measures under regulation 7(1)(a) to (c) where all the
following criteria are met
(a)
the payment instrument is not reloadable, or is
subject to a maximum monthly payment transaction limit of
one hundred fifty euro (€150) which can be used only in
Malta;
(b)
the maximum amount stored electronically does
not exceed one hundred fifty euro (€150);
(c)
the payment instrument is used exclusively to
purchase goods or services;
(d)
the payment instrument cannot be funded with
anonymous electronic money; and
AND FUNDING OF TERRORISM
(e)
the issuer carries out sufficient monitoring of the
transactions and the business relationship to enable the
detection of unusual or suspicious transactions
Provided that this exemption shall not be applied in the
case of redemption in cash or cash withdrawals of the monetary value
stored on the payment instrument where the amount redeemed or
withdrawn would exceed fifty euro (€50), or in the case of remote
payment transactions where the amount paid exceeds fifty euro (€50).
(2)
Subject persons issuing electronic money may still apply
simplified customer due diligence measures where a low risk of money
laundering and funding of terrorism is identified in accordance with
regulation 10, even where the exemption envisaged under sub-
regulation (1) has not been granted or has been granted subject to the
criteria envisaged in the said sub-regulation (1).
(3)
Subject persons acquiring payment transactions shall
only accept payments carried out with anonymous prepaid instruments
issued in other Member States and third countries where these are
issued subject to criteria equivalent to those envisaged under sub-
regulation (1).
(4)
In this regulation
"acquiring of payment transactions" means a payment
service provided by a payment service provider contracting
with a payee to accept and process payment transactions which
results in a transfer of funds to the payee;
"payment transaction" has the same meaning as is
assigned to the term under the Second Schedule to the
Financial Institutions Act;
"remote payment transaction" means a payment transaction
initiated via internet or through a device that can be used for distance
communication.
(1)
Subject persons shall verify the identity of the
customer 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 the provisions of sub-regulation (1),
subject persons may complete the verification after the establishment
of a business relationship where this is necessary so as not to interrupt
the 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 establishment of the business relationship.
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(3) Notwithstanding the provisions of sub-regulations (1)
and (2), subject persons carrying out relevant financial business may
open an account, including accounts that permit transactions in
transferable securities, as may be required by the customer provided
that adequate safeguards are put in place to ensure that no
transactions are carried out through the account until the verification
procedures in accordance with sub-regulation (1) have been
satisfactorily completed.
(4) Where the beneficiaries of a trust, legal entity or
arrangement are designated by particular characteristics or class, the
subject person shall identify and verify the identity of the
beneficiaries at the time of payout or at the time the beneficiaries
exercise their vested rights
Provided that, before the establishment of a business
relationship or the carrying out of an occasional transaction, the
subject person shall obtain sufficient information concerning the
beneficiaries to be able to identify and verify their identity at the time
of payout or at the time the beneficiaries seek to exercise their vested
rights.
(5) Where a subject person is unable to comply with
regulation 7(1)(a), (b) and (c), 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 nor
carry out any occasional transaction, and to terminate any business
relationship and to consider disclosing that information in accordance
with regulation 15(3) to the Financial Intelligence Analysis Unit
Provided that, where to refrain in such manner would
likely tip-off the customer about the submission of a disclosure in
terms of regulation 15(3) or a potential money laundering or funding
of terrorism analysis or investigation, that business shall proceed on
condition that a disclosure is immediately lodged with the Financial
Intelligence Analysis Unit in accordance with regulation 15(3)
Provided further that subject persons carrying out a
relevant activity under paragraph (a) or paragraph (c) of the
definition ''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 of their client or performing their
responsibilities of defending or representing that client in, or
concerning, judicial procedures, including providing advice on
instituting or avoiding procedures.
(6) Without prejudice to sub-regulation (5), a subject person
who is in possession of funds of a customer or a potential customer
and who pursuant to sub-regulation (5) decides to terminate or not to
establish a business relationship, or not to carry out an occasional
AND FUNDING OF TERRORISM
transaction and to return, release or transfer those funds, shall as far as
reasonably possible return those funds to the same source from where
they originated and through the same financial channels by which the
subject person came into possession of the funds, unless an order has
been made or a notice has been issued in terms of the Act or these
regulations prohibiting the release of such funds.
(1)
Notwithstanding the provisions of regulation
8(1) and without prejudice to the provisions of regulation 7(5)(c),
casino and gaming licensees shall apply customer due diligence
measures when carrying out transactions that amount to or exceed two
thousand euro (€2,000) or more, whether carried out within the
context of a business relationship or otherwise.
(2) In addition to complying with the provisions of sub-
regulation (1) and regulation 8, a casino licensee shall
(a)
not allow any person to enter the casino unless
such person has been satisfactorily identified pursuant to the
provisions of the Gaming Act or of any regulations made or
directives issued thereunder;
(b)
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 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
(c)
ensure that the provisions of paragraph (b) 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.
(1)
Simplified customer due diligence may be
applied
(a)
in relation to activities or services that are
determined by the Financial Intelligence Analysis Unit to
represent a low risk of money laundering and funding of
terrorism, having taken into consideration the findings of any
national risk assessment and any other relevant factors as may
be deemed appropriate; or
(b)
where, on the basis of the risk assessments
carried out in accordance with regulation 5, the subject person
determines that any occasional transaction or a business
relationship represents a low risk of money laundering and
AND FUNDING OF TERRORISM
funding of terrorism.
(2) Simplified customer due diligence shall not constitute an
exemption from all customer due diligence measures as envisaged
under regulation 7(1), but subject persons may determine the
applicability and extent thereof in a manner that is commensurate to
the low risk identified
Provided that subject persons shall carry out sufficient
on-going monitoring in terms of regulation 7(2)(a) to be able to
detect unusual and suspicious transactions.
(3) Nothing contained in this regulation shall apply where
the subject person has knowledge or suspicion of proceeds of
criminal activity, money laundering or the funding of terrorism.
(1)
In addition to the requirements under
regulation 7, subject persons shall apply enhanced customer due
diligence measures in the following situations
(a)
in relation to activities or services that are
determined by the Financial Intelligence Analysis Unit to
represent a high risk of money laundering or funding of
terrorism, having taken into consideration the findings of any
national risk assessment and any other relevant factors as may
be deemed appropriate;
(b)
where, on the basis of the risk assessments
carried out in accordance with regulation 5, the subject person
determines that an occasional transaction, a business
relationship or any transaction represents a high risk of money
laundering or funding of terrorism; and
(c)
in the cases referred to in sub-regulations (3) to
(10).
(2) Subject persons shall ensure that the enhanced customer
due diligence measures applied in the cases referred to in paragraphs
(a) and (b) of sub-regulation (1) are appropriate to manage and
mitigate the high risk of money laundering or funding of terrorism.
(3) With respect to correspondent relationships with
institutions from a country other than a Member State, subject
persons shall ensure that –
(a)
they gather sufficient information about the
respondent institution to understand fully the nature of the
respondent’s business and to determine from publicly available
information the reputation of the institution and the quality of
supervision on that institution,including whether the
respondent institution has been subject to any money
AND FUNDING OF TERRORISM
laundering or funding of terrorism investigation, or regulatory
action;
(b)
they assess the adequacy and effectiveness of
the respondent institution’s measures, policies, controls and
procedures for the prevention of money laundering and the
funding of terrorism;
(c)
the prior approval of senior management for the
establishment of new correspondent relationships is obtained;
(d)
they clearly understand and document the
respective responsibilities of each institution for the prevention
of money laundering and the funding of terrorism;
(e)
with respect to payable-through accounts, they
are satisfied that the respondent 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 they are provided with relevant
customer due diligence data upon request.
(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
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(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.
(4)
Subject persons carrying out relevant financial business
shall –
(a)
not enter into, or continue, a correspondent
relationship with a shell institution;
(b)
take appropriate measures to ensure that they
do not enter into, or continue, a correspondent relationship
with a respondent institution which is known to permit its
accounts to be used by a shell institution.
(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.
(5) Subject persons shall ensure that the risk management
procedures maintained in accordance with regulation 5(5)(a) are
conducive to determine whether a customer or a beneficial owner is a
politically exposed person, and when undertaking occasional
transactions for, or establishing or continuing business relationships
with politically exposed persons shall:-
(a)
require the approval of senior management;
(b)
take adequate measures to establish the source
of wealth and source of funds; and
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(c)
conduct enhanced ongoing monitoring of such
business relationships.
(6) In addition to the requirements under sub-regulation (5),
in case of long-term insurance business subject persons shall take
reasonable measures to determine whether the beneficiaries of a
policy and, where applicable, the beneficial owner of the beneficiary
are politically exposed persons, which measures shall be taken no
later than the time of payout or the time of the assignment, in whole or
in part, of the policy
Provided that where the beneficiaries of the policy or,
where applicable, the beneficial owner of the beneficiary are
politically exposed persons, subject persons shall inform senior
management before proceeding with the payout under the policy and
shall conduct enhanced scrutiny of the entire business relationship
with the policy holder
Provided further that, where the beneficiaries of a policy
or, where applicable, the beneficial owner of the beneficiary are
politically exposed persons and the subject person has additional
indications of a higher risk of money laundering or funding of
terrorism, the subject person shall consider whether it is to submit a
disclosure to the Financial Intelligence Analysis Unit in accordance
with regulation 15(3).
(7) Without prejudice to the application of enhanced
customer due diligence measures on a risk sensitive basis, where a
politically exposed person is no longer entrusted with a prominent
public function, subject persons shall be required to apply enhanced
due diligence measures in accordance with sub-regulations (5) and (6)
for at least twelve months after the date on which that person ceased
to be entrusted with a prominent public function.
(8) Sub-regulations (5) and (6) shall also be applicable to
family members or persons known to be close associates of politically
exposed persons, and, for the purposes of this sub-regulation
"family members" includes
(i)
the spouse, or a person considered to be
equivalent to a spouse;
(ii) the children and their spouses, or persons
considered to be equivalent to a spouse; and
(iii)
the parents.
"persons known to be close associates" means
(i)
a natural person known to have joint
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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.
(9)
Subject persons shall, as far as reasonably possible,
examine the purpose and background of all transactions that
(a)
are complex;
(b)
are unusually large;
(c)
are conducted in an unusual pattern; or
(d)
have no apparent economic or lawful purpose
Provided that in such cases subject persons shall
increase the degree and nature of monitoring of the business
relationship, to determine whether those transactions or activities are
suspicious in terms of regulation 15(3).
(10) Where occasional transactions or business relationships
or transactions involve non-reputable jurisdictions, subject persons
shall
(a)
obtain additional information on the identity of the
customer and, where applicable, the beneficial
owners;
(b)
obtain additional information on the intended
nature of business relationships;
(c)
obtain additional information on the source of
wealth and source of funds of the customer, and,
where applicable, the beneficial owners;
(d)
obtain information on the purpose of prospective or
executed transactions;
(e)
obtain the approval of senior management when
establishing business relationships, carrying out
occasional transactions or continuing business
relationships;
(f)
conduct enhanced monitoring of business
relationships by increasing the frequency of
monitoring, and identifying and, where appropriate,
examining patterns of transactions that require
AND FUNDING OF TERRORISM
further scrutiny; and
(g)
where applicable, require that the first payment be
carried out through a bank account in the customer’s
name held with a bank subject to customer due
diligence obligations that are consistent with those
laid down under these regulations.
(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.
(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
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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.
(13) The provisions of sub-regulation (12) shall not prejudice
the ability of the Financial Intelligence Analysis Unit, or a
supervisory authority, acting pursuant to its powers at law, to apply,
in the case referred to in this sub-regulation, measures other than
those envisaged in that proviso, or to apply measures so envisaged in
other situations as deemed appropriate.
(14) When taking any measures as set out in the proviso to
sub-regulation (11), the Financial Intelligence Analysis Unit and the
relevant supervisory authorities shall take into account, as
appropriate, relevant evaluations, assessments or reports drawn up by
international organisations, which lay down or monitor adherence
with international standards for the prevention of money laundering
and for combating the funding of terrorism, in relation to the risks
posed by individual third countries, and shall duly notify the
European Commission of any measures taken.
(1)
Subject persons may rely on another subject
person or a third party to fulfil the customer due diligence
requirements provided for under regulation 7(1)(a) to (c), with the
subject person placing reliance remaining ultimately responsible for
compliance with those requirements.
(2) For the purposes of this regulation "third party" shall
mean any person or institution, including member organisations or
representative bodies of such person or institution, situated in a
Member State other than Malta or a third country that
(a)
apply customer due diligence requirements and
record keeping requirements that are consistent with those laid
down under these regulations; and
(b)
have their compliance with anti-money
laundering and counter-financing terrorism requirements
monitored in a manner which is consistent with Section 2 of
Chapter VI of Directive (EU) 2015/849
AND FUNDING OF TERRORISM
Provided that subject persons may not rely on
third parties from a non-reputable jurisdiction, or any other
jurisdiction which is considered by the subject person to
present a high risk of money laundering or funding of terrorism
unless such third parties are branches or majority-owned
subsidiaries of persons or institutions established in a Member
State subject to national provisions implementing Directive
(EU) 2015/849 and which comply fully with group-wide
policies and procedures equivalent to those mentioned under
regulation 6.
(3) Subject persons relying on another subject person or a
third party shall obtain from that other subject person or third party
the information required in accordance with the provisions under
regulation 7(1)(a) to (c).
(4) Subject persons relying on another subject person or a
third party shall take adequate steps to ensure that, upon request, that
other subject person or third party shall immediately forward to them
relevant copies of the identification and verification data relevant to
the customer and the beneficial owner and other relevant
documentation required in terms of regulation 7(1)(a) to (c).
(5) Subject persons that are branches or majority owned
subsidiaries of persons or institutions established in a Member State
or a third country other than Malta and subject persons that have
branches or majority owned subsidiaries in a Member State or a third
country shall be considered to comply with the provisions of sub-
regulations (2) to (4) through the group’s policies and procedures,
where all the following conditions are met
(a)
the subject person relies on information
provided by a third party that is part of the same group;
(b)
that group applies customer due diligence
measures, record keeping measures and anti-money laundering
and counter-funding of terrorism policies and procedures
equivalent to those under these regulations;
(c)
the effective implementation of the measures
and requirements referred to in paragraph (b) at group level is
subject to supervision by a relevant authority.
(6) This regulation shall not apply 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 FUNDING OF TERRORISM
(1)
Subject persons shall retain the following
documents and information 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 in
accordance with the provisions of applicable law
(a)
in relation to any business relationship that is
formed or an occasional transaction that is carried out, the
customer due diligence documentation, data and information
obtained in fulfilment of the requirements under regulations 7
to 12;
(b)
supporting evidence and records necessary to
reconstruct all transactions carried out by that person in the
course of a business relationship or any occasional transaction,
which shall include original documents or other copies
admissible in court proceedings;
(c)
a record of any disclosures made to the
Financial Intelligence Analysis Unit in accordance with
regulation 15(3);
(d)
a record of any internal reports made in
accordance with regulation 15(1)(a);
(e)
a record of any written determinations made in
accordance with regulation 15(1)(b);
(f)
a record of any training provided in accordance
with regulation 5(5)(e); and
(g)
any other document, data or information which
the Financial Intelligence Analysis Unit may require to be
maintained in accordance with procedures and guidance issued
in terms of regulation 17.
(2) The documentation, data or information referred to in
sub-regulation (1) shall be kept for a period of five years
commencing on –
(a)
in relation to the documentation, data or
information described in paragraph (a) 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;
(b)
in relation to the supporting evidence and
records described in paragraph (b) thereof, the date when the
AND FUNDING OF TERRORISM
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;
(c)
in relation to the records described
in
paragraphs (c) to (e), the later between the following
(i)
the date when the business relationships
ends or the occasional transaction is carried out; or
(ii) the date when the report or determination
is submitted or drawn up, as the case may be;
(d)
in relation to the records described in paragraph
(f), the date when the event referred to therein took place
Provided that, in relation to records relating to
an occasional transaction consisting in several operations
which appear to be linked, the aforesaid period of five years
shall commence on the date on which the last operation took
place
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.
(3) Subject persons shall ensure that, upon request, all
records maintained in accordance with this regulation are made
available to the Financial Intelligence Analysis Unit and, as may be
allowed by law, to relevant supervisory authorities and law
enforcement agencies, for the purposes of the prevention, detection,
analysis and investigation of money laundering and the funding of
terrorism.
(4) Subject persons shall have systems in place that enable
them to respond fully and efficiently, through secure means that
ensure confidentiality, to enquiries from the Financial Intelligence
Analysis Unit, relevant supervisory authorities or law enforcement
agencies, 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; and
AND FUNDING OF TERRORISM
(b)
the nature of that relationship.
(5) The retention of personal data shall no longer be deemed
necessary for the purposes of these regulations beyond the period
established in terms of sub-regulation (2) or any extension thereof as
may become applicable in terms of the second proviso to sub-
regulation (2).
(6) The processing of personal data for the purposes of the
Act and these regulations shall be deemed to be a matter of public
interest under Regulation (EU) 2016/679, and the term "personal
data" shall have the same meaning as is assigned to it under
Regulation (EU) 2016/679.
(7) The provisions of this regulation shall be without
prejudice to the right of any other authority in terms of applicable law
to access the documents, data and information described in sub-
regulation (1)(a) and (b).
(1)
The Financial Intelligence Analysis Unit shall
maintain comprehensive statistical data relative to its functions under
the Act, to assist in the review of the effectiveness of the national
system to combat money laundering or the funding of terrorism and
the carrying out of national risk assessments.
(2)
Comprehensive statistical data maintained under sub-
regulation (1) shall include
(a)
data measuring the size and importance of the
different sectors which are subject to anti-money
laundering and counter-funding of terrorism
obligations under these regulations, including the
number of entities and persons conducting a
relevant activity or a relevant financial business
and the economic importance of each sector;
(b)
the kind of activity conducted by the entities and
persons referred to in paragraph (a);
(c)
the number of suspicious transaction reports made
to the Financial Intelligence Analysis Unit, the
types of underlying criminal activities, where this
information is known, and the follow up given to
these reports;
(d)
where available, data identifying the number and
percentage of suspicious transaction reports
resulting in further investigation, together with an
annual report to subject persons detailing the
usefulness and follow-up of the reports presented;
AND FUNDING OF TERRORISM
(e)
statistics relevant to the exchange of information
between the Financial Intelligence Analysis Unit
and foreign counterparts, including data regarding
the number of requests for information made,
received, refused and answered in full or in part,
broken down per foreign counterpart;
(f)
statistics relevant to the exchange of information
between the Financial Intelligence Analysis Unit
and any designated authority as defined under
article 14 of the Act, including data regarding the
number of requests for information made, received,
refused and answered in full or in part, as well as the
time taken to respond to a request for information
broken down per designated authority;
(g)
statistics relevant to the exchange of information
between the Financial Intelligence Analysis Unit
and Europol as defined under article 14 of the Act,
including data regarding the requests for
information received, refused and answered in full
or in part, as well as the time taken to respond to a
request for information;
(h
data on human resources and information
technology resources available to the Financial
Intelligence Analysis Unit to carry out its functions
under article 16(1)(a), (b), (c) and (k) of the Act;
(i)
the number of on-site and off-site examinations
carried out on subject persons with the aim of
monitoring their compliance with the provisions of
the Act and any regulations made thereunder, the
number of compliance failures or contraventions
identified following such examinations, and the
number and values of administrative measures or
penalties imposed
Provided that the statistical data set out in
paragraphs (f) to (h) shall also be maintained to
assist in the review of the effectiveness of the
national system to combat any other serious
criminal offences as defined in the first proviso to
article 27C(1) of the Act.
(3)
The Financial Intelligence Analysis Unit shall publish
consolidated reviews of the statistical data gathered in accordance
with this regulation on an annual basis and shall ensure that such
statistical data is also made available to the National Co-ordinating
Committee on Combating Money Laundering and Funding of
AND FUNDING OF TERRORISM
Terrorism established by the National Co-ordinating Committee on
C o m b a t i n g M o n e y L a u n d e r i n g a n d F u n d i n g o f Te r r o r i s m
Regulations in terms of article 12A of the Act and the European
Commission on an annual basis and upon request.
(1)
The reporting procedures which a subject
person is required to have and implement in terms of regulation
5(5)(a)(i) shall provide for –
(a)
the appointment by the subject person of one of
its officers of sufficient seniority and command as the
reporting officer, who may be the same officer referred to in
regulation 5(5)(c), and to whom officers and employees of the
subject person are to report any information or other matter
which may give rise to a knowledge or suspicion that funds,
regardless of the amount involved, are the proceeds of criminal
activity or are related to funding of terrorism, or that a person
may have been, is or may be connected with money laundering
or the funding of terrorism;
(b)
the consideration of any 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 funds, regardless of the amount
involved, are the proceeds of criminal activity or are related to
funding of terrorism, or that a person may have been, is or may
be connected with money laundering or the funding of
terrorism;
(c)
unrestricted access for the reporting officer or
another designated employee to any relevant information held
by the subject person;
(d)
a procedure whereby the reporting officer or
another designated employee submits a report to the Financial
Intelligence Analysis Unit in accordance with sub-regulation
(3) whenever he determines that there is knowledge or
suspicion that funds, regardless of the amount involved, are
the proceeds of criminal activity or are related to funding of
terrorism, or that a person may have been, is or may be
connected with money laundering or the funding of terrorism;
(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
AND FUNDING OF TERRORISM
(f)
the approval by the reporting officer of any
employee designated by the subject person for the purposes of
paragraphs (b) to (d) who shall work under his direction.
(2) A supervisory authority shall maintain internal reporting
procedures in accordance with the provisions of sub-regulation (1).
(3) Where a subject person knows, suspects or has
reasonable grounds to suspect that funds, regardless of the amount
involved, are the proceeds of criminal activity or are related to
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
an attempt has been made to carry out a transaction or activity related
to such proceeds or funding of terrorism , that subject person shall,
promptly disclose that information, supported by the relevant
identification and other documentation, to the Financial Intelligence
Analysis Unit through such channels and in such format as the
Financial Intelligence Analysis Unit may direct.
(4) Where a subject person knows or suspects that a
transaction is or may be related to proceeds of criminal activity or the
funding of terrorism, the subject person shall not carry out that
transaction until it has informed the Financial Intelligence Analysis
Unit in accordance with this regulation and, upon informing the
Financial Intelligence Analysis Unit, it shall refrain from executing
that transaction as provided for under article 28 of the Act.
(5) Where it is not possible for a subject person to refrain
from carrying out a transaction prior to informing the Financial
Intelligence Analysis Unit as provided for in sub-regulation (4) or
where refraining from carrying out any such transaction is likely to
frustrate efforts of investigating or pursuing the beneficiaries of the
suspected money laundering or funding of terrorism operations, the
subject person shall accordingly inform the Financial Intelligence
Analysis Unit immediately after the transaction is effected.
(6) Where, following the consideration of an internal report
in accordance with sub-regulation (1)(b), the reporting officer or other
designated employee determines that no reporting to the Financial
Intelligence Analysis Unit is required in terms of this regulation, 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.
(7) Where a supervisory authority discovers facts or obtains
any information that is related to funds which are known or suspected
to be related to proceeds of criminal activity or the funding of
terrorism, or to a person who may have been, is or may be connected
AND FUNDING OF TERRORISM
with money laundering or the funding of terrorism, or to an attempt to
carry out a transaction or activity related to proceeds of criminal
activity or funding of terrorism, that supervisory authority shall,
promptly, disclose those facts or that information, supported by the
relevant documentation that may be available, to the Financial
Intelligence Analysis Unit.
(8) Where, following a submission of a disclosure as in sub-
regulation (3), 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 request is first made, and shall reply
through such channels and in such format as the Financial
Intelligence Analysis Unit may direct
Provided that the Financial Intelligence Analysis Unit
may, where it deems so necessary, demand that the information be
submitted within a shorter period of time;
Provided further that a subject person may make
representations justifying why the requested information cannot be
submitted within the said time and the Financial Intelligence
Analysis Unit may, at its discretion and after having considered such
representations, extend such time as is reasonably necessary to obtain
the information, whereupon the subject person shall submit the
information requested within the time as extended.
(9) Subject persons carrying out a relevant activity under
paragraph (a) or paragraph (c) of the definition ''relevant activity''
shall not be bound by the provisions of sub-regulations (3), (4) and
(8) in relation to information that is received or obtained in the course
of ascertaining the legal position of 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.
(10) 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, even in circumstances where they
were not precisely aware of the underlying criminal activity and
regardless of whether illegal activity actually occurred.
AND FUNDING OF TERRORISM
(11) The Financial Intelligence Analysis Unit shall, wherever
practicable and as may be allowed by the provisions of the Act,
provide subject persons and, where applicable, supervisory authorities
with timely feedback on the effectiveness of suspicious transaction
reports and of any other information it receives under this regulation.
(1)
The Financial Intelligence Analysis Unit, any
investigating, prosecuting, judicial or administrative authority and
subject persons shall protect and keep confidential the identity of any
individual who reports, either internally within the subject person or
to the Financial Intelligence Analysis Unit, knowledge or suspicions
of money laundering or funding of terrorism, or who reports
knowledge or suspicions that funds are the proceeds of criminal
activity.
(2)
No detrimental action shall be taken against any
individual, including employees or officials of subject persons, who
reports, either internally within the subject person or to the Financial
Intelligence Analysis Unit, knowledge or suspicions of money
laundering or funding of terrorism, or knowledge or suspicions that
funds are the proceeds of criminal activity.
(3)
Any individual, including an employee or official of a
subject person, who believes that detrimental action has been taken or
is to be taken against him in reprisal for making a report as envisaged
under sub-regulation (2), may file an application to the First Hall, Civil
Court for
(a)
an order requiring the person who has taken the
detrimental action to remedy that action; or
(b)
an injunction.
(4)
The court, pending the final determination of an
application under sub-regulation (3) may
(a)
make an interim order; or
(b)
grant an interim injunction.
(5)
If, in determining an application under sub-regulation (3)
the court is satisfied that a person has taken or intends to take
detrimental action against an individual in reprisal for making a report,
as referred to in sub-regulation (2), the court may
(a)
order the person who has taken detrimental action
to remedy that action and determine the amount of damages,
including, but not limited to, moral damages as the court may
determine, due to the individual who suffered the detrimental
action; or
AND FUNDING OF TERRORISM
(b)
grant an injunction in any terms it considers
appropriate.
(6)
Notwithstanding the provisions of the Code of
Organisation and Civil Procedure, an injunction granted in terms of
sub-regulation (5)(b) shall be for an indefinite period until an
application for its revocation is made and need not be followed by an
action on the merits. The provisions of articles 873 and 875 of the
Code of Organisation and Civil Procedure shall apply to warrants
issued under sub-regulation (5)(b).
(7)
The provisions of articles 829 to 838B of the Code of
Organisation and Civil Procedure shall not apply to injunctions
granted in terms of sub-regulation (5)(b).
(8)
Notwithstanding the provisions of Schedule A of the
Code of Organisation and Civil Procedure, no registry fees shall be
charged on an application filed in the First Hall of the Civil Court by
any individual referred to in sub-regulation (3) but, if granted, an
award on costs shall be made against the respondent.
(9)
Any individual, including employees or officials of a
subject person, who may have suffered detrimental action as a result of
making a report as referred to in sub-regulation (2) shall, without
prejudice to any other right under any other law, have a right to
compensation for any damages sustained.
(10) Notwithstanding the provisions of any other law, the
First Hall, Civil Court shall have exclusive jurisdiction to hear and
determine an application under sub-regulation (3).
(11) All proceedings instituted under this regulation shall be
held in camera and only the parties to the proceedings and their
respective advocates shall be allowed in court during the hearings. All
the judicial acts, documents and evidence shall be kept by the
Registrar of the Court in a confidential manner and no access shall be
given thereto except to the parties and their respective advocates.
(12) Any decree or judgement of the First Hall, Civil Court
issued pursuant to this regulation shall preserve the confidentiality of
the proceedings and shall only reveal such facts as may be necessary to
make the same intelligible and enforceable by the parties.
(13) For the purpose of this regulation, "detrimental action"
means threats, retaliatory or hostile action, including adverse or
discriminatory employment actions, and without prejudice to the
generality of the foregoing shall include
(a)
any action causing injury, loss, or damage; and, or
(b)
victimisation, intimidation or harassment; and, or
AND FUNDING OF TERRORISM
(c)
dismissal, suspension or demotion except where
administratively or commercially justifiable for organisational
reasons; and, or
(d)
being adversely affected in respect of one’s
employment, profession or office, including employment
opportunities and work security; and, or
(e)
prosecution under article 101 of the Criminal Code
relating to calumnious accusations; and, or
(f)
civil or criminal proceedings or disciplinary
proceedings.
(1)
A subject person, a supervisory authority, any
official or employee of a subject person or a supervisory authority, or
any person from whom the Financial Intelligence Analysis Unit has
demanded information pursuant to these regulations or article 30 of
the Act, or any other person who has transmitted information to the
Financial Intelligence Analysis Unit, who discloses to the person
concerned or to a third party, other than as provided for in this
regulation, the fact that information has been demanded by the
Financial Intelligence Analysis Unit or that information has been or
may be transmitted to the Financial Intelligence Analysis Unit, or that
an analysis or an investigation has been, is being, or may be carried
out, shall be guilty of an offence and liable on conviction to a fine
(multa) not exceeding one hundred and fifteen thousand euro
(€115,000) or to imprisonment for a term not exceeding two years or
to both such fine and imprisonment.
(2) Disclosures made in the following circumstances shall
not constitute an offence under sub-regulation (1)
(a)
disclosures to the supervisory authority relevant
to that subject person or to law enforcement agencies in
accordance with applicable law;
(b)
disclosures between subject persons who
undertake relevant financial business, under the definition
"relevant financial business" or between those subject persons
and other persons undertaking equivalent business, whether
situated in a Member State or a third country, which form part
of the same group and apply group-wide policies and
procedures as provided for under regulation 6;
(c)
disclosures between subject persons who
undertake activities under paragraph (a) or paragraph (c) of the
definition "relevant activity" or between those subject persons
and other persons undertaking activities equivalent to those
under the said paragraphs in a Member State or a third country
imposing requirements similar to those laid down in these
AND FUNDING OF TERRORISM
regulations, who perform their professional activities, whether
as employees or not, within the same legal person or within a
larger structure to which they belong and which share common
ownership, management or compliance control;
(d)
disclosures between a subject person who
undertakes relevant financial business, under the definition
"relevant financial business" or the activities under paragraph
(a) or paragraph (c) of the definition "relevant activity" and
another person from the same professional category situated in
a Member State or a third country imposing requirements
similar to those laid down in these regulations and in cases
related to the same customer and the same transaction,
provided such persons are subject to obligations as regards
professional secrecy and personal data protection;
(e)
disclosures by a subject person in the course of
proceedings instituted against the subject person for, or as a
consequence of, the failure or delay in carrying out a
transaction in a competent court, tribunal or other judicial
authority in or outside Malta, including disclosures made in
any written pleadings or submissions, that the subject person
refrained from carrying out a transaction as required in terms
of article 28 of the Act
Provided that disclosures under this paragraph
shall not constitute an offence under sub-regulation (1) only
where such disclosures are made after the lapse of the period
of time referred to in the proviso to article 28(1) of the Act,
and where applicable, after the lapse of any period of time
during which the execution of the transaction is opposed by
the Financial Intelligence Analysis Unit in terms of article 28
of the Act;
(f)
disclosures by a subject person to a supervisory
authority or professional body exercising supervision or
regulatory oversight over that subject person, made in
response to an enquiry or action by that supervisory authority
or professional body with respect to the subject person’s
failure or delay in carrying out a transaction, that the subject
person refrained from carrying out a transaction as required in
terms of article 28 of the Act
Provided that disclosures under this paragraph
shall not constitute an offence of sub-regulation (1) only in the
case where such disclosures are made after the lapse of the
period of time referred to in the proviso to article 28(1) of the
Act, and where applicable, after the lapse of any period of time
during which the execution of the transaction is opposed by
the Financial Intelligence Analysis Unit in terms of article 28
AND FUNDING OF TERRORISM
of the Act;
(g)
any disclosures by an individual in the course of
proceedings instituted under regulation 15A, including any
disclosures made in any written pleadings or submissions.
(3) The fact that a subject person who undertakes activities
under paragraph (a) or paragraph (c) of the definition "relevant
activity" is seeking to dissuade a client from engaging in an illegal
activity shall not constitute an offence under sub-regulation (1).
(4) The rights of the data subject referred to in regulation 4
of the Restriction of the Data Protection (Obligations and Rights)
Regulations, in particular the right of access, shall be restricted,
partially or completely, where such a restriction is necessary and
proportionate for a subject person to adhere to his obligations under
sub-regulation (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 subject persons.
Where the Financial Intelligence Analysis Unit knows or
has reasonable grounds to suspect that, in connection with a business
relationship established by a subject person, money laundering or
funding of terrorism is taking place, has taken place or has been
attempted, or that such business relationship could increase the risk of
money laundering or funding of terrorism, the Financial Intelligence
Analysis Unit may, where the circumstances so warrant, require such
subject person to terminate that business relationship within a
stipulated period of time.
In fulfilment of its supervisory functions under the Act,
the Financial Intelligence Analysis Unit may require subject persons
to submit periodical reports on the measures and procedures they
maintain and apply pursuant to regulation 5 and any other information
or documents as the Financial Intelligence Analysis Unit may
consider necessary.
Where a subject person is required to provide
information to the Financial Intelligence Analysis Unit under the Act,
these regulations and any procedures or guidance issued thereunder,
the Financial Intelligence Analysis Unit may demand that the
information is produced electronically and may establish the format
within which the information is to be provided.
AND FUNDING OF TERRORISM
(1)
Any subject person who contravenes any of its
anti-money laundering and counter-funding of terrorism obligations
shall be liable to an administrative penalty of not less than one
thousand euro (€1,000) and not more than forty-six thousand five
hundred euro (€46,500) in respect of every separate failure to comply
with or contravention of any such obligation.
(2)
Notwithstanding the provisions of sub-regulation (1), a
subject person shall
(a)
with respect to minor contraventions and where
the circumstances so warrant, be liable to an administrative
penalty below the minimum established by these regulations
but not less than two hundred and fifty euro (€250);
(b)
with respect to serious, repeated or systematic
contraventions, be liable to an administrative penalty as
follows
(i)
in the case of a subject person carrying
out a relevant activity, an administrative penalty of not
more than one million euro (€1,000,000) or, where the
benefit derived from that contravention can be
quantified, not more than twice the amount of the benefit
so derived; or
(ii) in the case of a subject person carrying
out relevant financial business, an administrative
penalty of not more than five million euro (€5,000,000)
and, where such amount is deemed not to be effective
and dissuasive in view of the serious, systematic and
repeated nature of the contraventions, 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.
(3)
An administrative penalty may be imposed as a one-time
fixed penalty or as a daily cumulative penalty, or both, and
administrative penalties imposed on a daily cumulative basis shall not
be less than two hundred and fifty euro (€250) and the accumulated
penalty shall not exceed the maximum stipulated in sub-regulations (1)
and (2), as may be applicable.
AND FUNDING OF TERRORISM
(4)
Administrative penalties under this regulation shall be
imposed by the Financial Intelligence Analysis Unit, without recourse
to a court hearing but in accordance with policies and procedures
established by the Board of Governors referred to in the Act. Such
policies and procedures shall take into account the principles of natural
justice and of a fair hearing, and ensure that any administrative penalty
imposed is proportionate, effective and dissuasive.
(5)
Where a contravention in accordance with sub-regulation
(1) is committed by a subject person being a body or other association
of persons, be it corporate or unincorporate, in addition to any
administrative penalty imposed on the subject person, an administrative
penalty of not less than one thousand euro (€1,000) and not more than
two hundred and fifty thousand euro (€250,000) may be imposed on
any individual who at the time of the contravention was
(a)
holding the position of a director or holding
similar functions and responsibilities within such body or
association of persons or purporting to act in any such capacity;
(b)
an officer of such body or association of persons
holding a senior executive management function;
(c)
appointed as a reporting officer in accordance
with regulation 15(1)(a); or
(d)
appointed to carry out the duties set out under
regulation 5(5)(c),
and who through an act or omission, whether intentional or due
to gross negligence, including through the lack of proper oversight of
subordinates, caused or contributed to the commission of any such
contravention.
(1)
In the course of determining the imposition of an
administrative penalty on a subject person or any other individual, the
Financial Intelligence Analysis Unit may, in its own discretion but in
accordance with the policies and procedures referred to in article 13(2)
of the Act, propose or agree, to a request, to enter into a settlement
agreement with the subject person or individual concerned.
(2)
The Financial Intelligence Analysis Unit shall not enter
into a settlement agreement where
(a)
the Financial Intelligence Analysis Unit believes
that doing so would not be in the public interest in accordance
with any policies and procedures as may be established by the
Board of Governors; or
(b)
two (2) years have not yet lapsed from the
conclusion of any corrective or remedial actions undertaken by
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the subject person or individual concerned as part of a prior
settlement agreement
Provided that the Financial Intelligence Analysis Unit
may apply this restriction either in general or in relation to the
different categories of actions that may be undertaken in accordance
with article 26 of the Act but in any case it shall not enter into more
than two (2) settlement agreements with the same subject person
within a period of two (2) years
Provided further that where the subject person forms
part of a group, the said limitation shall take into account any
settlement agreement entered into with any other subject person
within the group.
(3) A settlement agreement shall be in writing, signed and
shall be binding on the Financial Intelligence Analysis Unit and the
subject person or individual concerned. The said settlement
agreement shall establish the terms and conditions of the agreement
and shall include
(a)
a description of the contraventions identified by
the Financial Intelligence Analysis Unit and the unconditional
agreement therewith by the subject person or individual
concerned;
(b)
a description of any corrective or remedial
actions which the Financial Intelligence Analysis Unit may
deem necessary to restore compliance, where applicable;
(c)
an undertaking by the subject person or
individual concerned to implement the corrective or remedial
actions required by the Financial Intelligence Analysis Unit,
within such time-frames and subject to such conditions as may
be set by or otherwise agreed with the Financial Intelligence
Analysis Unit;
(d)
the administrative penalty which the Financial
Intelligence Analysis Unit was intent on imposing on the
subject person or individual concerned, and the amount by
which the said administrative penalty is reduced on condition
that the subject person or individual concerned complies with
the terms and conditions of the settlement agreement;
(e)
an undertaking by the subject person or
individual concerned to pay the reduced administrative penalty
in accordance with the terms established in the settlement
agreement;
(f)
a waiver by the subject person or individual
concerned of any right to appeal, review or to otherwise
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challenge the determination and conclusions of the Financial
Intelligence Analysis Unit; and
(g)
a declaration by the subject person or individual
concerned that the amount by which the administrative penalty
is reduced shall become due and payable to the Financial
Intelligence Analysis Unit, upon the Financial Intelligence
Analysis Unit’s determination that any corrective or remedial
actions as are referred to in paragraph (c) have not been
completed as envisaged by the settlement agreement.
(4)
The amount of the administrative penalty conditionally
reduced in accordance with sub-regulation (3)(d) shall be extinguished
upon determination by the Financial Intelligence Analysis Unit that any
corrective or remedial actions required by the settlement agreement
have been carried out.
(5)
In the event that a settlement agreement is not entered
into due to lack of interest or lack of cooperation by the subject person
or individual concerned or within such time as may be set out by the
Financial Intelligence Analysis Unit, the Financial Intelligence
Analysis Unit shall proceed with the imposition of the administrative
penalty in the full amount it was intent on imposing and the imposition
of such other measures as it is empowered by law to impose and as it
may deem necessary.
(6)
A settlement agreement shall be considered to be
completed when the said agreement is signed by both parties and the
subject person or individual concerned has paid the full amount of the
reduced administrative penalty in accordance with the terms and
conditions established in the agreement, failing which, the Financial
Intelligence Analysis Unit shall proceed with the imposition of the
administrative penalty in the full amount it was intent on imposing and
the imposition of such other measures as it is empowered by law to
impose and as it may deem necessary.
(7)
In the event that, following the conclusion of a settlement
agreement, the Financial Intelligence Analysis Unit determines that the
subject person or the individual concerned failed, without reasonable
justification, to comply with the terms of the settlement agreement or
with any corrective or remedial action as required by the agreement
(a)
the subject person or the individual concerned
shall, following a notice in writing from the Financial
Intelligence Analysis Unit, forfeit any concession or other
benefit arising from the agreement, and the amount by which
the administrative penalty had been reduced shall become
due and payable to the Financial Intelligence Analysis Unit;
(b)
the Financial Intelligence Analysis Unit, may by
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notice in writing served on the subject person or on the person
concerned, take such other measures as the Financial
Intelligence Analysis Unit is empowered by law to take, and as
may be deemed necessary in the circumstances, including
issuing directives in writing requiring the subject person or
any other person concerned to do or to refrain from doing any
act, including such prohibitions, restrictions and limitations
under such conditions as may be specified in the directives;
and
(c)
the Financial Intelligence Analysis Unit may
institute an action before the Civil Court, First Hall, to recover
from the subject person or individual concerned the amount by
which the administrative penalty had been reduced in terms of
the settlement agreement, and to enforce the completion of the
corrective or remedial actions that the Financial Intelligence
Analysis Unit had imposed through the settlement agreement.
(8)
Any such action shall follow the procedure established
in articles 167 to 170 of the Code of Organization and Civil Procedure
Provided that where leave to defend the action is granted
in accordance with article 170 of the Code of Organization and Civil
Procedure or an appeal is otherwise filed from any decision of the
Civil Court, First Hall, the time-frames established in article 13A(3) to
(5) of the Act shall apply mutatis mutandis
Provided further that articles 13A(6) and 13C of the Act
shall also apply mutatis mutandis to any action referred to under this
sub-regulation or an appeal therefrom.
(9)
Where the Financial Intelligence Analysis Unit files an
action as referred to in sub-regulation (7)(d), it may also request the
court to impose on the subject person or individual concerned
additional penalties which shall not exceed one thousand euro (€1,000)
for every day until the corrective or remedial actions are completed.
(1)
Where the Financial Intelligence Analysis Unit
determines that a subject person has contravened its anti-money
laundering and counter-funding of terrorism obligations, the Financial
Intelligence Analysis Unit shall have the power to impose, in
conjunction with or instead of an administrative penalty, one or more
of the following administrative measures
(a)
a reprimand in writing to admonish the subject
person;
(b)
an order requiring a subject person to desist from
operating in a non-compliant manner;
(c)
an order requiring a subject person to comply
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with its anti-money laundering or funding of terrorism
obligations, including taking such actions as may be necessary
to remedy and, or correct the situation within such time-frames
and subject to such conditions as may be determined by the
Financial Intelligence Analysis Unit;
(d)
an order requiring a subject person to cease from
carrying out transactions or operations within the context of a
business relationship, or to offer any particular product or
service, be it temporarily or perpetually
Provided that such administrative measures shall be
without prejudice to the powers of the Financial Intelligence Analysis
Unit under article 30D of the Act.
(2)
The provisions of regulation 21(4) shall apply mutatis
mutandis to the imposition of administrative measures under this
regulation.
*
(1)
When the Financial Intelligence Analysis Unit
exercises its powers under regulations 21 to 23 it
(a)
shall inform in a timely manner the relevant
supervisory authority or any other authority, body or committee
responsible for the authorisation, licensing, registration or
regulation of, or the granting of a warrant to the subject person
or individual concerned and shall provide all relevant
information on the contraventions committed as it deems
necessary;
(b)
may also recommend to any relevant supervisory
authority or any other authority, body or committee responsible
for the authorisation, licensing, registration or regulation of, or
the granting of a warrant to, the subject person or individual
concerned, the taking of regulatory or other measures,
pertaining to the said authority, body or committee under
applicable law, against such subject person or individual
concerned as referred to in regulation 21(5) including
(i)
the restriction, limitation, suspension,
withdrawal or cancellation of any such licence,
registration, warrant or any other form of authorisation
allowing the subject person to carry out one or more
specific activities; and, or
(ii) the suspension or preclusion of any
individual as is referred to in regulation 21(5) from
exercising the functions in respect of which he is
authorised within that subject person or any other subject
*Vide Regulation 6(3) of Legal Notice 82 of 2026.
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person, as it may deem appropriate in the circumstances
of the case
Provided that the Financial Intelligence Analysis
Unit may also make a recommendation instead of imposing an
administrative penalty or measure.
(2) The provisions of these regulations shall be without
prejudice to the powers of a supervisory authority or any other
authority, body or committee responsible for the authorisation,
licensing, registration, regulation or the granting of a warrant to a
subject person, to take any action or regulatory measure available to
it under applicable law as it may deem appropriate in the
circumstances of the case.