This article was written by Dr Michael Psaila and Mr Neeraj Bharwani.
Directive No 19 on the Use of Cheques and Bank Drafts ('the Directive') was issued by the Central Bank of Malta on 7th July 2021 with the aim of promoting safe and effective use of cheques and bank drafts ('paper-based instruments') drawn on Maltese banks and financial institutions. Furthermore, institutions which exercise their passporting rights to provide their services in Malta, post office giro payment institutions and the Central Bank of Malta ('Bank') when acting as a payment service provider, and any natural or legal person making use of such instruments will also fall within the remit of this Directive.
While certain provisions in the Directive repeat the corresponding provisions on bills of exchange and other negotiable instruments in the Commercial Code and codify certain other usages of trade, the Directive has also introduced additional requirements and limitations which are intended to curb certain practices often associated with money laundering and other forms of financial crime. Indeed, the Malta Bankers' Association has also declared that the implementation of this Directive will shift the nation's payment landscape to more efficient modes of payment. 
This effort to control the use of cheques as payment instruments for certain transactions should also be seen in the context of the recently published Use of Cash (Restriction) Regulations, which have made it a criminal offence for any person to make or receive a payment, or otherwise carry out a transaction in cash amounting to, or exceeding, €10,000 or its equivalent in any other currency, whether in one transaction or in several linked transactions, in respect of the purchase or sale of certain goods, including jewellery, immovable property, sea-craft, motor vehicles and works of art.
Among the salient changes that will be brought about by the Directive, when it enters into force on 1st January 2022, are the following:
The Central Bank has made it clear that the main focus of the Directive is to ensure that cheques become a non-transferable payment instrument from the payer to the beneficiary. This will in turn lessen the susceptibility of the same to facilitate money laundering or other fraudulent purposes, whilst simultaneously instilling a sense of certainty in the use of the instruments for both users and service providers.
 Central Bank of Malta, 'New Central Bank of Malta Directive will affect cheque payments as from 2022' (https://www.centralbankmalta.org/en/news/88/2021/8946)
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. Michael Psaila