On the 14th November 2025, a substantially-revised National Interest (Enabling Powers) Act (‘NIA’. ‘the Act’), overhauling and modernising Malta’s domestic sanctions regime in conformity with recently-enacted EU laws. The Act transposes parts of a set of EU Directives and Regulations – namely Directive 2024/1226 (sanctions criminalisation), Regulation 2024/886 (instant euro transfers) and Regulation 2023/1113 (crypto-asset transfer information) into Maltese law. Malta has now formally adopted EU definitions of sanctions offences, while strengthening its tracing of funds mechanisms.
The NIA now distinguishes between minor breaches and serious offences. It commences by drawing a 10,000 EUR threshold, whereby breaches involving less than 10,000 EUR in funds or resources (such as a minor failure to freeze assets or a minor trade with a listed entity) are considered as administrative failures instead of criminal offences.
In order to prevent evasion by splitting large deals, the NIA introduces a ‘linked series’ rule which allows authorities to aggregate related transactions by the same person when the 10,000 EUR limit is assessed. The NIA also tightens enforcement procedures, with the Sanctions Monitoring Board (‘SMB’) now being endowed with formal out-of-court settlement powers and the recover of unpaid penalties as civil debts within 20 working days.
Moreover, from an institutional aspect, the SMB has gained broader authority. It is empowered to conduct both onsite and offsite inspection of firms within its scope, coordinate with other agencies and exchange strategic information. New measures allow the SMB to attach and freeze assets belonging to suspected designated persons, and is obliged to publish the measure. Aa dedicated Sanctions Appeals Tribunal and a public Tribunal Registry are also established, empowering natural and legal persons alike with appeal rights to formally challenge SMB decisions such as rulings or penalties.
The Act creates the figure of a temporary administrator whom a sanction company must appoint if required to prevent serious economic and/or social harm. The penalties that can be imposed have also significantly increased.
The revised NIA imposes detailed compliance duties on regulated businesses (so-called “subject persons” – essentially entities carrying out financial or other relevant activities under Maltese AML rules). In addition to AML related obligations, they must also screen active and prospective clients against specific sanctions lists. Moreover, for payment service providers, there is a special rule: those offering instant euro credit transfers must verify daily whether their payment service users are on an EU sanctions list.
In summary, the newly-amended NIA brings with it a sanctions regime which is stricter and more stringent in its nature. Through its codification of EU sanctions rules, it raises enforcement powers and sets the tone for more concrete compliance duties. One should take heed of the obligation imposed upon financial institutions and corporate service providers to rigorously screen every prospective client and related party against all sanctions lists applicable before and periodically – once the prospective client becomes a serviced client. The new NIA aims to ensure that Malta’s financial system is sufficiently resilient to sanctions evasion, guiding businesses in complying with their various legal obligations.
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Author: Dr Karl Cauchi