Regulator Demands Higher Standards in Anti-Money Laundering and Counter-Terrorism Financing Measures
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The Malta Financial Services Authority (MFSA) has issued new guidelines to enhance the anti-money laundering (AML) and counter-terrorism financing (CFT) measures adopted by financial institutions operating in the country.
New Guidelines for AML/CFT Measures
According to the guidelines, applicants for a licence must conduct a thorough assessment of the money laundering and terrorist financing risks associated with their business. This includes:
- Assessing customer base, products and services offered, distribution channels used, and geographical areas of operation
- Demonstrating how they plan to mitigate these risks and comply with applicable AML/CFT obligations
The guidelines also require applicants to have robust systems and controls in place to ensure that branches and agents operating outside of Malta are compliant with AML/CFT requirements. Additionally:
- Staff and agents must receive appropriate training in AML/CFT matters
- There must be a designated person responsible for ensuring compliance
Keeping Policies and Procedures Up-to-Date
The MFSA emphasizes the importance of keeping AML/CFT policies and procedures up to date, effective, and relevant. It also expects applicants to have systems in place to detect and report suspicious transactions or activities.
Branches of Overseas Institutions
In a separate development, the MFSA has clarified its stance on branches operated by overseas institutions in Malta:
- Branches are considered integral parts of the institution to which they belong
- There is no requirement for them to have their own funds
- The regulator may require additional information from applicants operating through branches in other Member States
Compliance and Enforcement
The guidelines come into effect immediately and will be closely monitored by the MFSA to ensure compliance with AML/CFT regulations. Failure to comply with these standards may result in restrictions or revocation of a licence.
Additional Information
Applicants for a licence are required to provide additional information as deemed necessary by the Authority to determine an application or to restrict or revoke a licence. The regulator expects applicants to notify it immediately of any changes to their documents or information submitted.
Determining an Application for a Licence
The Authority must determine an application for a licence within six months of receipt of the application. The regulator will examine:
- Planned business of the proposed local branch
- Internal controls, accounting and other records, personnel and management arrangements
- Information regarding directors, controllers and managers