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Malta Tightens Financial Crime Prevention Strategies to Combat Sanctions Breaches
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Malta has strengthened its financial crime prevention strategies to ensure compliance with international sanctions, following recent developments in the global fight against financial terrorism and money laundering.
The National Interest (Enabling Powers) Act
The Act requires all financial institutions, including banks and credit institutions, to freeze funds and assets of designated individuals and entities subject to United Nations Security Council Resolutions, European Union regulations, and national sanctions. The Act also empowers the Sanctions Monitoring Board to monitor the implementation and operation of sanctions legislation in Malta.
Financial Sanctions: A Critical Tool
Financial sanctions have become a critical tool in combating financial terrorism and money laundering, as they aim to disrupt the flow of funds to terrorist organizations and other malicious entities. In recent years, international sanctions have been imposed on various countries, individuals, and entities accused of supporting terrorism or breaching human rights.
Compliance Requirements for Financial Institutions
To ensure compliance with these sanctions, Malta’s financial institutions are required to:
- Take note of all international sanctions issued from time to time
- Exercise caution in their business dealings
- Monitor their business relationships and verify their records on an ongoing basis for any information or transactions known or suspected to be connected or related to designated individuals and entities
The Role of the Sanctions Monitoring Board
The Sanctions Monitoring Board is responsible for:
- Monitoring and reporting on sanctions breaches
- Providing guidance and support to financial institutions in their efforts to comply with international sanctions
- Maintaining a website that provides information on international sanctions and advises Licence Holders and other interested persons to consult the relevant websites for complete and up-to-date information
US Sanctions: A Significant Risk
US sanctions, which are not always synchronized with UN or EU sanctions, also pose a significant risk to Malta’s financial sector. Unilateral US sanctions have been imposed on various countries, individuals, and entities, often without prior consultation with other nations. These sanctions can have far-reaching implications for businesses operating in the European Union, including those in Malta.
Mitigating Risks
To mitigate these risks, Malta’s financial institutions are advised to:
- Consider US sanctions when conducting business activities outside of the EU
- Seek professional advice as necessary to ensure compliance with international sanctions and avoid unwittingly supporting activities or entities subject to sanctions
Conclusion
In conclusion, Malta has taken a proactive approach to strengthening its financial crime prevention strategies in response to the evolving threat posed by financial terrorism and money laundering. By working closely with international partners and implementing robust measures to prevent sanctions breaches, Malta aims to maintain its reputation as a responsible and reliable financial center in the European Union.