PREVENTION OF MONEY LAUNDERING AND FUNDING OF TERRORISM

The legal provisions for the prevention and prohibition of money laundering in Malta are laid down in the Prevention of Money Laundering Act (“Act”) and the Prevention of Money Laundering and Funding of Terrorism Regulations (“the Regulations”). Whilst the Act, and the Criminal Code in respect of funding of terrorism, primarily deal with the criminal law aspects of these, the Regulations, that are aligned with European Union legislation, lay down the obligations of persons operating in sectors that are particularly prone to be used for money laundering and funding of terrorism activities.  

 

The Financial Intelligence Analysis Unit, established by the Act, is a Government agency and is the national agency responsible for the collection, analysis and dissemination of information for the purpose of combating money laundering and the funding of terrorism. It also oversees compliance by “subject persons” with the Regulations. 

 

Pursuant to the Regulations, subject persons that form business relationships or carry out one-off transactions with applicants for business have the duty to (i) maintain customer due diligence including identification procedures, and internal and external reporting procedures, and (ii) provide for employee training, in accordance with the provisions of the Regulations. 

 

A subject person is a legal or natural person carrying out either relevant financial business or relevant activity. Relevant financial business essentially refers to the business of banks, electronic money institutions, financial institutions, life assurance companies or intermediaries, investment service providers, collective investment schemes, stockbrokers, RIEs, and any business associated with the aforementioned.  

 

The term “relevant activity” concerns the activity of the following persons when acting in the exercise of their profession: 

 

(a) auditors, external accountants and tax advisors; 

(b) real estate agents; 

(c) notaries and other independent legal professionals assisting in the planning or execution of transactions for their clients concerning the: 

 

(d) trust and company service providers and persons providing trustee or other fiduciary services; 

(e) casino and remote gaming licensees; 

(e) persons trading in goods whenever payment is made in cash in an amount equal to EUR 15,000 or more in a single operation or in several operations which appear to be linked;  

(f) any activity which is associated with an activity falling within these paragraphs . 

 

 

A general obligation of professional secrecy is imposed by the Professional Secrecy Act in order to create the necessary reassurance to local and foreign investors without unnecessarily hampering supervision of fiscal and regulatory compliance. However, the Prevention of Money Laundering Act and Regulations as well as the gateways in the relevant financial legislation, in particular the Banking Act, the Financial Institutions Act, and Investment Services Act, provide for the lifting of confidentiality for disclosure of information in cases of suspicious transactions.