FIAU Imposes Stiff Penalties for Anti-Money Laundering Violations
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The Financial Intelligence Analysis Unit (FIAU) has taken a tough stance on anti-money laundering (AML) violations, imposing severe penalties on financial institutions and businesses that fail to comply with regulatory requirements.
Penalties for AML Violations
According to recent updates, the FIAU may impose penalties of up to €1 million or twice the value of the benefit derived from the contravention, where the violation is committed by a person undertaking a relevant activity. For financial institutions that carry out relevant financial business acts, the maximum penalty is set at €5 million.
- The FIAU also introduced non-monetary sanctions, including:
- Written reprimands
- Remediation plans
- Notifications to other supervisory authorities or bodies
- Termination of a particular business relationship
Criminal Sanctions
Violations of AML obligations can also attract criminal sanctions. The Civil Court has recently ruled that penalties imposed by the FIAU are deemed to be of a criminal nature, although this judgment is currently under appeal.
FIAU’s Process for Assessing and Collecting Sanctions
The FIAU’s process for assessing and collecting sanctions involves a thorough investigation and assessment of the violation. Penalties can be appealed through administrative or judicial proceedings.
Recordkeeping and Reporting Requirements
Applicable laws and regulations do not impose specific thresholds for large currency transactions. However, financial institutions are required to detect unusually large transactions and assess their legitimacy.
- Financial institutions must also maintain accurate records of customer transactions.
- They are required to report suspicious transactions to the FIAU.
Customer Identification and Due Diligence Requirements
The FIAU has introduced customer identification and due diligence requirements, which include:
- Identifying and verifying customers
- Understanding ownership and control structures
- Obtaining sufficient information to understand the purpose of the business relationship
Cross-Border Reporting Requirements
The local AML/CFT regime does not impose specific cross-border reporting requirements on financial institutions or other businesses subject to the anti-money laundering regulations.
Conclusion
With the FIAU’s tough stance on AML violations, financial institutions and businesses operating in Malta must ensure compliance with regulatory requirements to avoid severe penalties.