Financial Crime World

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Malta Cracks Down on Money Laundering and Terrorist Financing

Malta has strengthened its laws to combat money laundering and terrorist financing, imposing severe penalties for those found guilty of these crimes.

New Laws and Penalties

According to the law, any individual or entity suspected of deriving proceeds from criminal activity is liable to be charged. This includes concealing the origin or source of funds, as well as assisting those involved in illegal activities.

Even if a person has not been convicted of a crime, their assets can still be considered illicit if they cannot prove that they had no knowledge or suspicion of the origin of the funds.

The maximum fine for money laundering is €2.5 million, while the maximum prison sentence is 18 years. Legal entities can also face penalties, with punishments extendable to individuals involved in the entity and even future proceeds.

Who are “Subject Persons”?

Under Maltese law, “subject persons” are defined as any natural or legal person engaging in financial activities. This includes:

  • Notaries and lawyers acting on behalf of clients
  • Real estate agents
  • Financial advisors
  • Art dealers
  • Auditors and accountants

KYC and Due Diligence

To prevent money laundering, subject persons must conduct know-your-customer (KYC) verification and due diligence procedures. This includes:

  • Verifying the legal status of customers and directors
  • Identifying beneficial owners
  • Ensuring ongoing monitoring
  • Keeping records up to date

Risk Management

Subject persons must also conduct risk management exercises to identify suspicious transactions, including those that are complex, high-value, or involve unusual patterns.

Record-Keeping and Reporting

Under Maltese law, subject persons must keep relevant documentation and information for potential investigations by the Financial Intelligence Analysis Unit (FIAU) or police. This includes storing data in accordance with national and EU regulations, such as GDPR.

BDO Malta’s AML Compliance Services

BDO Malta’s AML compliance team can assist clients from all industries with their anti-money laundering and counter-terrorism financing obligations. Their services include:

  • Developing AML compliance frameworks
  • Conducting AML compliance reviews
  • Creating AML procedures
  • Providing staff training
  • Offering compliance support

By working with BDO Malta, organizations can ensure they comply with national and international AML legal requirements and maintain a robust culture of compliance.

Get in Touch

To learn more about how BDO Malta can help your organization, contact us today.