Malta Takes Swift Action Against International Financial Crime Laws

Malta has taken significant steps to strengthen its anti-money laundering (AML) laws and regulations, taking a proactive approach to combat the growing threat of money laundering.

AML Regulations Strengthened

The country’s financial regulators have implemented a range of measures aimed at preventing the legalization of revenues from criminal activities. The Prevention of Money Laundering Act (PMLA), enacted in 1994, was Malta’s primary law against money laundering until it was repealed and replaced by the Proceeds of Crime Act (POCA) in 2021.

POCA and PMLFTR

POCA has further increased the effectiveness of AML measures and policies alongside the Prevention of Money Laundering and Funding of Terrorism Regulations (PMLFTR).

Regulatory Oversight

The Malta Financial Services Authority (MFSA), a public institution, regulates and supervises financial institutions to ensure economic stability. The MFSA conducts joint AML/CFT audits with the Financial Intelligence Analysis Unit (FIAU) to prevent money laundering and terrorist financing.

MONEYVAL Report

A recent MONEYVAL report has revealed significant strides in Malta’s commitment to countering money laundering and terrorist financing. After an evaluation in 2019 identified compliance gaps, Malta adopted stringent measures and has now been upgraded from “partially compliant” to “largely compliant” and “compliant” in nine FATF Recommendations.

Virtual Assets Regulation

Malta’s proactive approach to regulating virtual assets, including prominent cryptocurrencies, has also led to an elevation from “partially compliant” to “largely compliant” status. Malta has notably achieved full compliance with twelve out of the 40 FATF Recommendations, signifying adherence to international AML/CTF standards.

Enhanced Follow-Up

However, MONEYVAL has determined that Malta will continue to be subject to enhanced follow-up, necessitating a subsequent report on advancing AML/CFT measures in two years.

Compliance Requirements

Financial institutions in Malta must comply with the Maltese AML regulations, which are compatible with the Financial Action Task Force (FATF) and the European Union (EU) regulations. Organizations must meet Customer Due Diligence (CDD) requirements and report suspicious transactions to authorized units. Non-compliant organizations and individuals can face penalties issued by FIAU.

Fines Issued

In 2022, FIAU issued more than €3.1 million in fines to entities that had breached PMLA, with most cases due to the lack of business risk assessments identified by FIAU.

Customized AML Compliance Solutions

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