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Following from the recent geopolitical developments in Ukraine, there has been a heightened interest in international sanctions. Through this series of articles, we aim to provide a general overview of the notion of sanctions, consider the local framework through which sanctions function in Malta, illustrate the general obligations which subject persons are required to observe vis-à-vis sanctions and discuss a general overview of the sanctions imposed by the EU against Russia.

In this eighth article, we shall consider the salient aspects of the guidance provided by the Maltese Sanctions Monitoring Board and European Commission in relation to a recently introduced reporting obligation on to the flow of funds by Russian-owned entities.

The Sanctions Monitoring Board (the “SMB”) recently issued a circular on the reporting obligation imposed under article 5r of EU Council Regulation 833/2014. The purpose of this reporting obligation is to provide the SMB, along with other national competent authorities around the European Union (the “EU”), with better visibility on the flow of funds related to Russian-owned entities out of the EU, without jeopardising the activities of entities which are partly Russian-owned and operating legitimately in the EU. This visibility will allow the SMB to better assess whether certain types of transfers pose a risk of violation of Russia-related sanctions and also contribute to a better understanding Russia’s sources of revenue.

This reporting obligation applies to all legal persons, entities and bodies established in the EU whose proprietary rights are directly or indirectly owned by more than 40% (including aggregate ownership) by a legal person, entity or body established in Russia; a Russian national; or a natural person residing in Russia; and credit and financial institutions tasked with handling the flow of such funds. The obligation covers any transfers which are leaving the EU’s jurisdiction and covers all types of funds, regardless of the currency. This obligation to report, as found in Article 5r of EU Council Regulation 833/2014, applies to those transfers which exceed €100,000, whether such sum is made in one or several operations made by the same party.

The first reporting period for legal persons, entities and bodies established in the EU should cover the period between 1st January and 31st March 2024, with the obligation to submit having occurred on the 1st May 2024. From the second quarter of 2024 onwards, reporting is required to be done within 2 weeks after the end of each quarter. The European Commission has issued a document listing the most frequently asked questions on this obligation to report. These FAQs may be accessed through the following link:

The obligation to report for credit and financial institutions begins on 1st July 2024, which is considered to be the first semester for reporting. The first report is to be submitted by the 15th July 2024. The reporting obligation for credit and financial institutions for the second semester is to be done by the 15th January 2025.

For this purpose, the SMB has provided a specific template accessible on the following guidance circular link: Circular-on-Reporting-Obligation-under-article-5r-of-Council-Regulation-8332014.pdf (, which must be duly completed when submitting such notifications. The notification is to be submitted by email to

Submissions to the SMB should include a clear subject line referencing the obligations under Article 5r of Council Regulation 833/2014. In the absence of any updates, a NIL report is to be submitted by email to the Sanctions Monitoring Board.

This document does not purport to give legal, financial or tax advice. Should you require further information or legal assistance, please do not hesitate to contact Dr Zachary Galea.