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Anonymous Company Launches Appeal Against FIAU Penalty
A prominent financial institution in Malta has launched an appeal against a penalty imposed by the Financial Intelligence Analysis Unit (FIAU) for alleged non-compliance with anti-money laundering regulations.
According to sources, the company had been accused of failing to implement adequate measures to prevent money laundering and terrorist financing. The FIAU issued a penalty, which the company is now challenging through an appeal in the Court of Appeal (Inferior Jurisdiction).
Outcome Kept Confidential
The outcome of the appeal will be kept confidential, but the FIAU has pledged to update its website on the status of the appeal.
Cryptocurrency Industry Under Scrutiny
The anti-money laundering requirements have been increasingly applied to the cryptocurrency industry in Malta. The Financial Institutions Act and the Virtual Financial Assets Act require entities operating in this sector to implement robust measures to prevent money laundering and terrorist financing.
Entities Subject to Regulations
Entities subject to these regulations include:
- VFA service providers
- Issuers of virtual financial assets
- VFA agents
The FIAU has issued sector-specific guidelines to assist companies in complying with their anti-money laundering obligations.
AML Requirements for Non-Fungible Tokens (NFTs)
The FIAU has also clarified that the anti-money laundering requirements apply on a case-by-case basis to non-fungible tokens (NFTs). Whether an NFT is subject to AML regulations depends on its characteristics, and companies are advised to seek legal advice to determine whether their NFT qualifies as a virtual financial asset.
Compliance Programmes Required for Financial Institutions
Financial institutions and designated businesses in Malta are required to establish and implement compliance programmes to mitigate the risks of money laundering and terrorist financing. These programmes must include:
- Customer due diligence
- Record-keeping
- Reporting
- Risk management measures
- Internal controls
- Employee training
Reporting Requirements
There are no specific reporting requirements for large currency transactions in Malta, but financial institutions are required to detect unusually large transactions and assess their legitimacy. A reporting obligation arises only where the institution is not satisfied with the explanations provided or there are doubts about the transaction’s legitimacy.
Cross-Border Reporting Requirements
Malta does not impose specific cross-border reporting requirements on financial institutions, but companies may be subject to reporting requirements under other laws and regulations.
Customer Due Diligence and Enhanced Due Diligence
Customer due diligence measures in Malta involve:
- Identifying and verifying customers
- Understanding the purpose of business relationships
- Obtaining sufficient information about the customer’s ownership structure
There are no special or enhanced due diligence requirements for certain types of customers, but companies must undertake ongoing monitoring of business relationships.
Conclusion
The FIAU has pledged to continue its efforts to combat money laundering and terrorist financing in Malta, and companies in the financial sector are advised to remain vigilant and compliant with anti-money laundering regulations.