FIAU: Legal Notice 199 of 2021 and Amendments to the Prevention of Money Laundering and Funding of Terrorism Regulations
The Financial Intelligence Analysis Unit (FIAU) would like to bring to the attention of subject persons and interested parties the publication in the Government Gazette of Legal Notice 199 of 2021. This legal notice, which was issued on 30 April 2021, introduces a series of amendments to the Prevention of Money Laundering and Funding of Terrorism Regulations (PMLFTR).
The following is a brief outline of the main amendments carried out:
1) Widening of the Definition of “Supervisory Authority” – The list of authorities considered as supervisory authorities in terms of Regulation 2(1) of the PMLFTR has been widened to also include the Malta Business Registry, the Licensing Board established under the Real Estate Agents, Property Brokers and Property Consultants Act and the Trade Licensing Unit but limited to its licensing function in relation to dealers in precious metals and stones. The inclusion of these authorities within the list is intended to clarify and strengthen the possible cooperation and collaboration that there may be between the FIAU and these new bodies.
2) Amendment of the Definition of “Trust and Company Service Provider” – The Company Service Providers Act has been the subject of a major overhaul, with both existing and prospective service providers in this area now requiring authorisation by the Malta Financial Services Authority (MFSA) rather than simply being registered with the MFSA or having notified the FIAU. The inclusion of the term ‘authorised’ within paragraph (b) of this definition is intended to ensure there is no misunderstanding that anyone authorised in terms of the Company Service Providers Act as amended will still be considered as carrying out relevant activity and is therefore a subject person for the purposes of the PMLFTR.
3) Amendments to reflect the requirements of Directive (EU) 2015/849 – Following a thorough evaluation of how the provisions of Directive (EU) 2015/849 were transposed into Maltese law, the European Commission remarked that some of the provisions of the PMLFTR were not fully aligned with the requirements of the Directive. To this end, amendments were carried out to Regulations 4 and 13 of the PMLFTR to ensure that these correctly reflect the requirements arising from Directive (EU) 2015/849 when it comes to possible exemptions from AML/CFT requirements and to subject persons’ record keeping obligations.
4) Amendments to Regulation 11(11) – Regulation 11(11) of the PMLFTR used to set out the obligations that subject persons must adhere to when carrying out occasional transactions, establishing business relationships or carrying out transactions within the context of a business relationship involving non-reputable jurisdictions in respect of which there is an international call for countermeasures. The same provision used to also list the powers that the FIAU enjoyed in such cases. To render this provision more legible and clear, Regulation 11(11) was revised and is now limited to setting out the obligations of subject persons, and a new sub-regulation was introduced setting out the powers of the FIAU in such cases.
5) Amendments to Regulation 21(4)(b)(ii) – In an effort to clarify the power of the FIAU when it comes to the imposition of administrative penalties on subject persons carrying out relevant financial business, this sub-paragraph has been revised. It now ensures that the FIAU is always empowered to impose an administrative penalty of not more than Euro 5 million in the case of serious, repeated, or systematic breaches of any of the requirements arising from the PMLFTR. If, however, the breaches being considered are so severe that Euro 5 million is not considered enough, the FIAU can take into consideration the subject person’s turnover and impose an administrative penalty of not more than 10% of the turnover, as long as this results in an administrative penalty that is higher than Euro 5 million in value.
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