Bank Compliance Procedures in Malta: A Crucial Aspect of Anti-Money Laundering Frameworks
Introduction
In a bid to prevent the flow of illicit funds through the financial system, the Maltese authorities have strengthened their anti-money laundering (AML) and combating financial terrorism (CFT) frameworks. The Prevention of Money Laundering and Financing of Terrorism Regulations (PMLFTR) provides subject persons with clear guidance on their obligations and duties to prevent the disguising of illegally obtained funds as legitimate income.
Key Obligations for Subject Persons
Every subject person operating in Malta is legally required to have in place measures, policies, controls, and procedures that are proportionate to the nature and size of its business. These internal processes must clearly document:
- Customer Acceptance: The process for accepting customers, including identification requirements
- Risk Assessment: Regular risk assessments to identify potential money laundering and terrorism financing risks
- Compliance Management: Effective management of compliance with AML/CFT regulations
- Communication: Clear communication protocols for employees and customers
- Employee Screening: Procedures for screening employees and third-party service providers
Ensuring Effective Enforcement of Internal Controls
To ensure effective enforcement of these internal controls, subject persons must:
- Continuously educate their employees on established measures, policies, controls, and procedures
- Record, maintain, and update relevant policies on an ongoing basis to reflect legislative updates
Expert Assistance from BDO Malta
BDO Malta offers expert assistance in establishing the necessary policies and procedures commensurate with the money laundering and funding of terrorism risks faced by each organization. By doing so, subject persons can ensure that regulatory or sector-specific requirements are reflected within their documented controls.
Prioritizing AML/CFT Compliance
In light of these stringent regulations, it is essential for financial institutions operating in Malta to prioritize AML/CFT compliance. By doing so, they not only safeguard the integrity of the financial system but also protect themselves from potential reputational damage and legal consequences.