Malta Financial Regulation Updates: FIAU Issues Revised Implementing Procedures

The Financial Intelligence Analysis Unit (FIAU) has recently released a revised version of its Implementing Procedures Part I (IPs), introducing several changes aimed at enhancing anti-money laundering and combating financing of terrorism (AML/CFT) measures in Malta. The updated IPs are now available on the FIAU’s website, along with a tracked changes document highlighting the modifications made to the previous version.

Key Updates

The revised IPs introduce several key updates, including:

Adverse Media

• Additional guidance is provided on assessing the relevance, reliability, and timing of adverse media
• Evaluating supervisory and regulatory information within simplified due diligence

Beneficial Ownership

• Further clarification on determining beneficial ownership in specific situations, such as:
  • When shares are held in a trust or when the customer is a state-owned enterprise
  • Identifying beneficial owners who are corporate entities

Agents

• Clarification of identification and verification obligations for agents
• Only the body corporate needs to be identified and verified if it is an agent
• Verification of directors or partners is only required in respect to those authorized to represent the body corporate

Transaction Monitoring

• Further guidance on transaction monitoring obligations, including:
  • When subject persons are not expected to monitor transactions carried out by customers when they have been left to their discretion
  • Primary context: discretionary portfolio management and investment services

Fund Administrators Servicing Collective Investment Schemes

• Guidance on adhering to record-keeping obligations in cases where there is a change in the fund administrator servicing a collective investment scheme
• Outsourcing AML/CFT obligations and MLRO functions

Ongoing Monitoring

• Guidance on checks that need to be carried out for low-risk business relationships
• Simplified due diligence procedures when dealing with collective investment schemes or nominee/omnibus securities’ accounts

Money Laundering Reporting Officer (MLRO)

• Changes regarding the criteria for appointing an MLRO, including:
  • Allowing both executive and non-executive directors to hold this role
  • Assessing conflicts of interest and personal ties that may affect impartiality and independence

Jurisdictional Risk Assessment

• Further guidance on jurisdictions to be considered for assessment purposes
• Additional examples and criteria for using assessments carried out by third parties

Compliance Requirements

It is essential for all subject persons to familiarize themselves with the revised IPs to ensure compliance with the updated regulations.