Means of Control Criteria Essential in Determining Beneficial Ownership

In recent years, Malta has introduced stricter guidelines for identifying beneficial owners in response to new regulations aimed at combating money laundering and terrorist financing. Article 3 (6)(a)(i) of the Prevention of Money Laundering Act (PMLFA) specifies that a person is considered a beneficial owner if they exercise control or ownership over an entity through any means.

Criteria for Determining Beneficial Ownership

The Financial Intelligence Analysis Unit (FIAU) has outlined the various criteria for determining beneficial ownership. According to their guidelines, control can be exercised through:

• Direct or indirect ownership of shares
• Voting rights
• Other means, such as:
  • A shareholder giving another person the right to determine how their voting rights are exercised
  • Special rights in an agreement establishing a relationship

Identifying Beneficial Owners

In cases where no natural person is identified as the beneficial owner after exhausting all possible means and provided there are no grounds for suspicion, the senior managing official(s) of the company must be recorded as the beneficial owner. This applies even if no shareholder holds more than 25% of shares in the company.

Determining Beneficial Ownership for Cell Companies

The FIAU has emphasized that a cell company’s beneficial ownership should be determined by considering all shareholders, including those holding shares only in cells. In contrast, an incorporated cell in an incorporated cell company would have separate legal personality and must be considered separately for determining beneficial ownership.

Key Points to Note

• A company licensed by a Maltese competent authority is not exempt from disclosing its beneficial owners to the Malta Business Registry (MBR).
• The MBR may conduct on-site inspections to verify a company’s beneficial ownership information.
• Beneficial ownership information must be disclosed to both the MFSA and the MBR, as these registers are separate and distinct.

Conclusion

These developments underscore the importance of ensuring accurate and up-to-date beneficial ownership information. Companies must take proactive steps to identify their beneficial owners and disclose this information to relevant authorities to maintain compliance with anti-money laundering regulations.