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Malta Financial Services Authority Unveils New Guidelines for Money Laundering Reporting Officers

The Malta Financial Services Authority (MFSA) has published a new guidance note aimed at clarifying the roles and responsibilities of Money Laundering Reporting Officers (MLROs) in the financial services sector. The guidance, titled “A Guidance for Money Laundering Reporting Officers in the Financial Services Sector”, provides valuable insights into what the MFSA expects from MLROs and AML/CFT compliance management officials.

Scope of the Guidance

According to the guidance, all licence holders that carry out a relevant financial business or conduct relevant activity fall within its scope. The document is intended to be applied in relation to the function of the MLRO even where the responsibilities for AML/CFT compliance management are vested with another official, to the extent applicable.

Key Takeaways

The guidance highlights several key takeaways, including:

  • Knowledge and Training: MLROs should have a full understanding of the fundamental principles and obligatory practices related to AML/CFT, as well as the necessary expertise and legislative proficiency.
  • Training, Background, and Experience: MLROs should have awareness of predicate crimes and/or financial crime typologies relevant to the specific business sector. Achieving academic qualifications and attending regular training does not override the MFSA’s consideration of other factors, such as relevant experience.
  • Autonomy: MLROs should be independent and have the necessary authority and decision-making power to carry out their responsibilities effectively.

Good Practices

The guidance provides several good practices related to these principles, including:

  • Dedicating sufficient time: MLROs should dedicate sufficient time in proportion to the needs of the licence holder.
  • Access to technological resources: MLROs should have access to technological resources to carry out their responsibilities effectively.
  • Reporting directly to someone other than the Board of Directors: MLROs may need to report directly to someone other than the Board of Directors where necessary.

Conflict of Interest

The guidance notes that there should be no conflict of interest between the MLRO function and other roles. It suggests that MLROs should only fulfill other compliance-related roles that complement their MLRO-related duties and not business-driven roles.

Access to Guidance

The full guidance is available on the MFSA website, providing valuable insights for all stakeholders involved in the financial services sector.