Financial Crime World

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FIAU Appeals: A Growing Trend in Malta’s Financial Sector

In a move that is sending shockwaves through Malta’s financial sector, several financial institutions and Designated Non-Financial Businesses and Professions (DNFBPs) have availed themselves of the right to appeal penalties issued by the Financial Intelligence Analysis Unit (FIAU).

The Trend Towards Appealing FIAU Penalties

According to sources, the appeals are being heard behind closed doors, with no judgments or details of the proceedings being made public. However, the FIAU is required to update its website with information on the status and outcome of the appeals.

This trend has sparked concerns about the effectiveness of Malta’s anti-money laundering (AML) regime. Critics argue that the lack of transparency surrounding the appeal process raises questions about the accountability of financial institutions and DNFBPs in complying with AML regulations.

Anti-Money Laundering Requirements for Financial Institutions and DNFBPs

The Maltese authorities have been working to strengthen AML requirements for financial institutions and DNFBPs. The latest developments include a push to apply AML requirements to the cryptocurrency industry, with entities such as Virtual Financial Asset (VFA) service providers and issuers of VFAs subject to strict regulations.

Key Requirements

  • Risk assessments
  • Customer due diligence
  • Record-keeping
  • Reporting suspicious activity

Sector-Specific Guidelines

The FIAU has also issued sector-specific guidelines to help businesses comply with their AML obligations. These guidelines cover areas such as:

  • Risk assessments
  • Customer due diligence
  • Record-keeping
  • Reporting suspicious activity

NFTs and AML Requirements

In a related development, the Maltese authorities have clarified that Non-Fungible Tokens (NFTs) will be subject to AML requirements on a case-by-case basis. The determination of whether an NFT is subject to AML requirements will depend on its characteristics.

Compliance Programs for Financial Institutions and DNFBPs

Regulators have also emphasized the importance of compliance programs for financial institutions and DNFBPs. These programs must include measures such as:

  • Customer due diligence
  • Record-keeping
  • Reporting
  • Risk management
  • Internal controls
  • Employee training

Ongoing Monitoring and Enhancement

SPs are required to monitor and enhance their measures, policies, controls, and procedures on a regular basis to ensure they remain effective in detecting and preventing money laundering and terrorist financing activities.

Record-Keeeping and Reporting Requirements

The Maltese authorities have clarified that there is no specific requirement for record-keeping or reporting large currency transactions. However, SPs are required to detect unusually large transactions and assess their legitimacy before reporting any suspicious activity to the FIAU.

Cross-Border Transactions Reporting Requirements

Finally, the Maltese authorities have confirmed that there are no specific cross-border reporting requirements for financial institutions and DNFBPs. However, regulators have emphasized the importance of cooperating with foreign authorities to prevent money laundering and terrorist financing activities.