FIAU’s Penalty Appeals to be Heard Behind Closed Doors

The Financial Intelligence Analysis Unit (FIAU) has confirmed that several financial institutions and designated non-financial businesses and professions (DNFBPs) in Malta have filed appeals against penalties issued by the agency.

Appeals Process

According to sources, the appeals will be heard behind closed doors, with no publication of the judgment expected. The FIAU is bound to update its website with information on the status of the appeal and the outcome.

Background

The penalty appeals follow a review process undertaken by the FIAU, which had identified potential breaches of anti-money laundering (AML) and combating the financing of terrorism (CFT) requirements.

AML/CFT Requirements in Malta

In related news, the AML/CFT requirements for financial institutions and DNFBPs in Malta were highlighted in a recent publication. The document outlined:

• Types of payments or money transmission activities subject to AML requirements, including exceptions
• Application of AML/CFT obligations to the cryptocurrency industry and non-fungible tokens (NFTs)
• Importance of maintaining compliance programs for financial institutions and DNFBPs, which must include:
  • Customer due diligence
  • Record keeping
  • Reporting
  • Risk management measures
  • Internal controls
  • Employee screening

Compliance Requirements

The FIAU’s AML/CFT regime also requires institutions to:

• Detect unusually large transactions and assess their legitimacy
• Report only where there are doubts about the transaction or the source of funds

Cross-border transactions reporting requirements were not highlighted in the publication, although local authorities may impose specific regulations in this regard.

Conclusion

It remains to be seen how the FIAU will address the appeals filed by financial institutions and DNFBPs in Malta. In the meantime, institutions must continue to comply with AML/CFT requirements and maintain robust compliance programs to mitigate risks.