Amendments to the Prevention of Money Laundering and Funding of Terrorism Regulations
The Financial Intelligence Analysis Unit (“FIAU”) has issued a notice outlining a number of amendments that have been made to the Prevention of Money Laundering and Funding of Terrorism (hereinafter referred to as “PMLFTR”). Such amendments seek to address weaknesses identified during MONEYVAL’s assessment of Malta’s PMLFT regulations. Significant amendments took place in relation to Regulations 8, 11, 12, 15 and 21 of the PMLFTR.
With the amendment that took place to Regulation 8, businesses may now proceed with a service or a transaction for a client regardless of suspicion of potential money laundering or funding of terrorism, should such a delay in all likeliness tip-off the client. The subject person is obliged to inform the FIAU immediately with regards to such service or transaction.
The information must be collected about the respondent institution, in correspondent relationships, and a new addition is for further information to be collected where the respondent institution was investigated for money laundering or funding of terrorism or was subjected to regulatory action.
In relation to long-term insurance business prior to payout, subject persons are now also obliged to consider whether to disclose to the FIAU that higher risks of money laundering and funding of terrorism are present when servicing PEPs, either directly or as beneficial owners of their client.
The prohibition on reliance is now extended beyond non-reputable jurisdictions to also incorporate jurisdictions that are deemed to present a high risk of money laundering and funding of terrorism, as per the subject person’s country risk assessment.
The most significant amendment is the provision where subject persons must now report any suspicious activity immediately, rather than five (5) days from when such suspicion of money laundering and funding of terrorism, or suspicion of an attempt to launder money or fund terrorism, arises. Supervisory authorities are also obliged to inform the FIAU immediately, rather than within five (5) days from the suspicion arising, as per the new amendments.
The amendments to regulation 21, focus mostly on affording the FIAU the power to sanction individuals holding senior management positions with the respective subject person and through their acts or omissions contributed to AML/CFT breaches by the subject person. The administrative sanctions that may be imposed on a number of functionaries, including Directors, Money Laundering Reporting Officers and those in other senior management positions, may range anywhere between Euro 1,000 and Euro 250,000. Moreover, it is recommended to the respective supervisory authority to prohibit such person from holding such a role, or any other role the FIAU and the supervisory authority deem fit.