Financial Crime World

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Malta’s Financial Sanctions Regimes: A Comprehensive Guide

Malta has implemented a robust financial sanctions regime to ensure compliance with international sanctions imposed by the United Nations Security Council, the European Union, and the United States. The National Interest (Enabling Powers) Act provides the legal framework for the implementation of sanctions in Malta.

Purpose of Sanctions

Sanctions are designed to achieve various objectives, including:

  • Promoting peace and stability
  • Combating terrorism
  • Addressing human rights violations
  • Imposing measures against specific individuals or entities involved in illicit activities

Restrictive Measures

Sanctions typically involve restrictive measures that target specific countries, individuals, or entities. These measures may include:

  • Restrictions on trade
  • Travel restrictions
  • Financial services restrictions
  • Restrictions on the provision of funds and economic resources
  • Arms embargos
  • No-fly zones
  • Naval blockades
  • Military intervention

Implementation in Malta

In Malta, sanctions are implemented through regulations made under the National Interest (Enabling Powers) Act. The Act provides for the direct applicability of United Nations Security Council Resolutions and European Union Council and Commission Regulations in Malta. Sanctions may also be imposed by national legislation.

The Sanctions Monitoring Board is responsible for monitoring the implementation and operation of sanctions legislation in Malta. The board has a range of functions, including:

  • Proposing designations
  • Delistings
  • Unfreezing of property

Obligations of MFSA Licence Holders

MFSA Licence Holders are required to take note of international sanctions and exercise caution when conducting business activities. They must:

  • Verify their records on an ongoing basis for any information or transactions connected with designated individuals or entities
  • Report findings to the Sanctions Monitoring Board and the MFSA

US Sanctions

In addition to United Nations and European Union sanctions, the United States has imposed its own sanctions regime. MFSA Licence Holders and the public are encouraged to take US sanctions into consideration when conducting business activities.

The US Treasury Department’s Office of Foreign Assets Control (OFAC) may impose measures against non-US banks that engage in prohibited transactions with designated persons or entities. These measures can have significant implications for business activities.

Conclusion

Malta’s financial sanctions regime is designed to ensure compliance with international sanctions and prevent illicit activities. Licence Holders and the public are urged to consult the Sanctions Monitoring Board, United Nations, and EU websites for complete and up-to-date information and seek professional advice as necessary to comply with sanctions.