By virtue of Act no 1 of 2020, the Prevention of Money Laundering Act (hereafter referred to as ‘PMLA’), has been updated to reflect the recent amendments imposed by Directive (EU) 2018/843 (hereafter referred to as ‘5AMLD’) on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing.
Further amendments have been made, implementing recommendations made by MONEYVAL in its Fifth Round Mutual Evaluation Report on Malta, as well as addressing concerns expressed under the Venice Commission’s opinion on Malta’s constitutional framework, particularly to the jurisdiction’s separation of powers and independence of the judiciary and law enforcement.
The main purpose of the 5AMLD is to properly equip Member States with tools to effectively prevent its financial system from being exposed to threats or vulnerabilities relating to money laundering and/or terrorist financing. The significant changes made to the PMLA include:
- Improved transparency through public beneficial ownership registers for companies, and other registers for trusts and other legal arrangements.
- Introduction of limitations to the anonymity offered by virtual currencies, wallet providers and pre-paid cards.
- In-depth criteria for the assessment of high-risk countries and improved safeguards for financial transactions to and from such countries.
- The set up and manage central bank account registries or retrieval systems ('CBAR');
- Cash restrictions of EUR 10,000 per transaction.
- Amendments to enhance cooperation and exchange of information between national and foreign authorities.
- Amendments to clarify the powers and functions vested within the FIAU.
- Amendments to the established time frames for cases heard before the Court of Appeal ('CoA') regarding administrative penalties imposed by the FIAU, requiring a final judgment to be given within 6 months of date of hearing.
- Publication of administrative penalties amounting to a minimum of €50,000 (threshold increased from €10,000 to €50,000; penalties below this new threshold will only be published anonymously).
- Inclusion of the Malta Gaming Authority (‘MGA’) and the Commissioner for Revenue on the FIAU Board of Governors as well as the removal of the Attorney General from such Board.
- Improved standards for selection of FIAU officials and staff, particularly relating to the appointment and selection of the Director of the FIAU, promoting a higher degree of transparency, autonomy and accountability through the appointment following a public call.
- Publication of a list of prominent public functions in Malta as well as those held within international organisations accredited in Malta, assisting with the proper determination of what constitutes a Politically Exposed Person (‘PEP’).
Apart from enhancing Malta’s legislative framework in place for the prevention of money laundering and terrorist financing; these measures are expected to further contribute to lowering risk levels in concerned sectors and products; namely cash-based sectors such as real estate, gaming and lottery winnings, and designated non-financial business and professions.
The Commission will review Malta’s compliance with the new provisions and publish an implementation report by mid-2021.
