Malta’s Financial Authorities Investigate Cases of Money Laundering
In a bid to combat financial crimes, the Malta Financial Services Authority (MFSA) and the Malta Gaming Authority (MGA) have been working closely together to investigate cases of money laundering and terrorist financing. These authorities are empowered to take severe measures against individuals or entities suspected of involvement in such activities, including fines of up to €2.5 million and imprisonment for up to 18 years.
What is Money Laundering?
Money laundering refers to the process of concealing the source of illegally obtained funds by making them appear legitimate. This can be done by transferring funds through multiple accounts, using shell companies or trusts, or engaging in other complex financial transactions.
Maltese Law
Under Maltese law, it is illegal to acquire, possess, or retain property that has been derived from criminal activity.
Who are Subject Persons?
Subject persons are defined as any individual or entity engaged in relevant financial business or activity. This includes:
- Notaries and lawyers
- Real estate agents
- Financial advisors
- Art dealers
- Tax professionals
- Auditors
These individuals and entities are required to carry out due diligence on their clients, including verifying the source of funds and conducting background checks.
Due Diligence
Due diligence involves verifying the information provided by a client in order to establish whether they are suitable to onboard. This includes:
- Identifying the client
- Verifying their legal status
- Ensuring that the source of funds is legitimate
Risk Management
Subject persons must also conduct risk management exercises to identify transactions that may be suspicious or complex. If such transactions are identified, the subject person must increase monitoring of the client and business relationship.
Record-Keeping and Reporting Procedures
Under Maltese law and international best practices, subject persons must keep relevant documentation and information in order to aid any potential investigations by the Financial Intelligence Analysis Unit (FIAU) or police.
BDO Malta’s AML Compliance Team
BDO Malta’s AML compliance team is experienced in assisting clients from all industries with their AML/CFT obligations. Our multidisciplinary team can provide assistance with:
- Developing AML frameworks
- Conducting compliance reviews
- Providing staff training
If you require more information on how to ensure your company complies with national and international AML legal requirements, contact us today.