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Malta’s Battle Against Money Laundering: Understanding the Legal Framework

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In a bid to combat the scourge of money laundering and terrorist financing, Malta has implemented stringent laws and regulations to ensure that financial institutions and organizations operating within its borders are held accountable for any illicit activities.

Identifying ‘Subject Persons’

The law defines “subject persons” as any individual or entity engaged in financial activities, including:

  • Notaries
  • Lawyers
  • Real estate agents
  • Accountants
  • Art dealers

These individuals must conduct due diligence on clients and report suspicious transactions to the Financial Intelligence Analysis Unit (FIAU) and other relevant authorities.

Know Your Customer (KYC) and Due Diligence

KYC is a critical process that requires service providers to:

  • Identify and verify clients
  • Assess risks associated with the relationship
  • Determine whether the client is suitable for onboarding

Due diligence involves verifying information provided by clients, including:

  • The source of funds
  • Conducting background checks

Risk Management

Subject persons must conduct regular risk management exercises to identify transactions that may be suspicious or indicative of money laundering or terrorist financing activities. This includes:

  • Monitoring complex, high-value, or unusual transactions
  • Transactions involving non-reputable jurisdictions

Record-Keeping and Reporting Procedures

Under Maltese law, subject persons are required to maintain accurate records and reports to facilitate investigations by the FIAU and police. The General Data Protection Regulation (GDPR) also applies to personal data held by these entities.

BDO Malta’s AML Compliance Services

To assist clients in navigating the complexities of anti-money laundering (AML) compliance, BDO Malta offers a range of services:

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

By partnering with BDO Malta’s experienced AML team, organizations can ensure that they are in compliance with national and international AML legal requirements and mitigating the risks of money laundering and terrorist financing.

Get in Touch

For more information on how to comply with Malta’s anti-money laundering regulations, contact us today.