Bank Compliance Procedures in Malta Under Scrutiny Amid EU Directive Changes
The European Union’s fifth Anti-Money Laundering Directive (5AMLD) has introduced significant changes to the way financial institutions operate within its member states, including Malta. The directive aims to strengthen the prevention of money laundering and terrorist financing by enhancing transparency, information sharing, and cooperation between anti-money laundering supervisors.
Background on EU Directive Changes
The European Union’s fifth Anti-Money Laundering Directive (5AMLD) has introduced significant changes to the way financial institutions operate within its member states, including Malta. The directive aims to strengthen the prevention of money laundering and terrorist financing by enhancing transparency, information sharing, and cooperation between anti-money laundering supervisors.
Regulatory Framework in Malta
In Malta, the Prevention of Money Laundering Act sets out the definitions of money laundering and predicate offences, while the Maltese Criminal Code addresses the offence of terrorist financing. The Prevention of Money Laundering and Financing of Terrorism Regulations outline the obligations and procedures that subject persons must implement, including a risk-based approach to customer information and documentation.
Subject Persons Under the Spotlight
A range of entities are classified as subject persons in Malta, including:
- Company service providers
- Gaming licensees
- Real estate agents
- Notaries and legal professionals
- Insurance agents and intermediaries
- Financial institutions
These entities are required to implement a comprehensive set of procedures, including reporting, training, and awareness measures. The FIAU (Financial Intelligence Analysis Unit) has issued general and sector-specific implementing procedures that bind subject persons to comply with these regulations.
Key Areas of Focus
Malta’s bank compliance procedures are under scrutiny due to the following key areas:
- Enhancing Beneficial Ownership Transparency: Subject persons must ensure that they have adequate processes in place to identify and verify beneficial owners.
- Strengthening Financial Intelligence Units’ Powers through Information Sharing: Financial institutions must be able to share information with the FIAU to enhance the prevention of money laundering and terrorist financing.
- Improving Cooperation between Anti-Money Laundering Supervisors and the European Central Bank: Malta’s financial institutions must collaborate with anti-money laundering supervisors and the European Central Bank to ensure compliance with EU regulations.
- Limiting Anonymity related to Virtual Currencies and Wallet Providers: Subject persons must implement adequate procedures to prevent anonymous transactions involving virtual currencies and wallet providers.
- Setting up Central Bank Account Registries: Malta’s central bank account registries will be set up to enhance transparency and cooperation between financial institutions.
As the EU continues to evolve its Anti-Money Laundering framework, Malta’s financial institutions must remain vigilant in their compliance efforts to avoid potential risks and penalties.