The concern of money laundering and potential terrorist financing has given rise to the enactment of various rules and regulations. The regulatory framework in Malta comprises the Prevention of Money Laundering Act (‘PMLA’) and the Prevention of Money Laundering and Funding of Terrorism Regulations (‘PMLFTR’). These pieces of legislation are in alignment with European Union legislation and lay down the obligations of subject persons (i.e. persons from sectors which are prone to be used for money laundering and funding of terrorism activities).
What is Money Laundering?
Money laundering is the process of transforming the proceeds of crime (criminal property) into ostensibly legitimate money or other assets.
Originally, the PMLA only applied to a limited list of predicate offences, however since 31st May 2005, with the coming into effect of Legal Notice 176 of 2005, Malta has shifted from having a restricted list of predicate offences to an ‘all crimes’ regime, meaning that ‘any criminal offence’, whenever or wherever it is carried out, may constitute the basis for the offence of money laundering.
What is Funding of Terrorism?
In terms of the Criminal Code (Cap. 9 of the Laws of Malta), funding of terrorism is the process by which a person receives, provides or invites another person to provide, money or other property intending it to be used, or which he has reasonable cause to suspect that it may be used, for the purposes of terrorism. The definition of funding of terrorism therefore cares little about the source of the funds (contrary to the definition of money laundering), but it is what the funds are to be used for that defines its scope.
What AML/CFT policies and procedures are required?
The law stipulates that subject persons must establish and maintain policies and procedures relating to:
Subject persons must ensure that the records kept as well as the retention periods adhere to the obligations emanating from the Data Protection Act (Cap. 440 of the Laws of Malta), which has transposed the Directive 95/46/EC into national legislation.
How we can assist your business
The AML/CFT regime imposes significant obligations on subject persons. AS a result of the pending transposition of the 4th AMLD, which must be done by the 26th June 2017, it has become even more important for subject persons to ensure that their policies and procedures are not only up to date and forward looking but that they are being adhered to correctly.
If you would like to discuss any of the issues raised above or how the new Directive may affect your business, please do contact us. We have the knowledge and expertise to provide your business with comprehensive assistance with the regulation and other matters such as:
If you need any help, please feel free to contact us. We will get back to you within 1 business day. If you’re in a hurry, call us now.
Call: +(356) 21247785
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