New Malta Regulations Aim to Combat Money Laundering and Terror Financing

The Maltese government has introduced new regulations aimed at combating money laundering and terror financing by increasing transparency in the beneficial ownership of trusts.

Increased Transparency

Under the new regulations, trustees are required to submit a declaration of beneficial ownership to the Malta Financial Services Authority (MFSA) for all express trusts that generate tax consequences. This information will be made available through a register of beneficial owners, which will be interconnected with central registers of other EU member states.

Exemptions and Penalties

The regulations also provide exemptions from disclosing beneficial ownership information in exceptional circumstances where it may expose the beneficial owner to:

Fraud
Kidnapping
Blackmail
Violence or intimidation
Or where the beneficial owner is a minor or otherwise incapable.

In addition, the MFSA has been granted powers to impose administrative penalties on trustees who fail to comply with the new regulations. These penalties can reach up to €150,000.

Customer Due Diligence

The regulations emphasize that subject persons shall not rely exclusively on the register of beneficial owners to fulfill their customer due diligence obligations in terms of the Prevention of Money Laundering and Funding of Terrorism Regulations.

Moreover, the regulations provide that access to information on a beneficial owner of a trust may be restricted or denied where it would expose the beneficial owner to harm or if the beneficial owner is a minor or incapable. The MFSA has also been granted powers to share information with other competent authorities and Financial Intelligence Units in the EU and third countries.

Enhanced Transparency and Cooperation

The new regulations aim to enhance transparency and cooperation between financial institutions, law enforcement agencies, and regulatory bodies to combat money laundering and terror financing.

Data Protection and Confidentiality

Data protection and confidentiality are ensured through applicable data protection laws and rules regarding the processing of personal data.

Statement from the Maltese Government

In a statement, the Maltese government emphasized that these regulations are designed to ensure that Malta remains a reputable jurisdiction in the fight against money laundering and terror financing.