International Financial Crime Laws in Malta: Understanding the Consequences of Non-Compliance
Malta has implemented a robust system for enforcing international financial crime laws, particularly those related to sanctions imposed by the United Nations Security Council and the European Union. These sanctions are designed to prevent countries, regimes, or organizations from engaging in activities that threaten global peace, security, and stability.
Types of Sanctions
There are different types of sanctions, including:
- Diplomatic sanctions: restrictions on diplomatic relations
- Economic sanctions: restrictions on trade and financial transactions
- Military sanctions: military actions against targeted entities
The most common type is economic sanctions, which aim to restrict trade and financial transactions with targeted entities. These sanctions can have severe consequences for individuals and companies that fail to comply.
Obligations of MFSA Licence Holders
Malta’s Financial Intelligence Analysis Unit (FIAU) has issued guidelines for MFSA licence holders to ensure compliance with international sanctions. Licence holders are required to:
- Take note of all international sanctions as issued from time to time
- Exercise caution and vigilance in business relationships
- Verify records on an ongoing basis for any information or transactions connected to designated individuals or entities
- Identify and freeze funds, financial assets, and economic resources in accordance with the requirements of the sanctions
Reporting Obligations
Licence holders are also required to report their findings to the Sanctions Monitoring Board (SMB) and the MFSA. They must provide all relevant details about any frozen funds, financial assets, or economic resources belonging to designated individuals or entities.
US Sanctions
The United States has also imposed sanctions on several countries, individuals, and entities. Unlike UN and EU sanctions, US sanctions are enforced unilaterally by the US government. MFSA licence holders and the public are encouraged to take US sanctions into consideration when conducting business activities in view of their wide- ranging applicability.
Consequences of Non-Compliance
Non-compliance with international financial crime laws can result in severe consequences for individuals, companies, and even countries. These may include:
- Fines
- Penalties
- Asset freezing
- Criminal prosecution
Conclusion
Malta’s implementation of international financial crime laws demonstrates its commitment to preventing and combating financial crime. It is essential that MFSA licence holders and the public understand their obligations and take necessary steps to ensure compliance with these laws. Failure to do so can have significant consequences for individuals, companies, and the country as a whole.
It is recommended that Licence Holders consult the appropriate Sanctions Monitoring Board, United Nations, and EU websites for complete and up-to-date information and seek professional advice as may be necessary to ensure compliance with international sanctions.