Act I of 2020 was published on 7th February to amend the Prevention of Money Laundering Act (CAP. 373) (‘PMLA’). The amendments are intended to transpose the 5th Anti-Money Laundering Directive (‘5AMLD’), to reflect the recommendations made in the latest MONEYVAL Mutual Evaluation Report and to address points raised by the Venice Commission opinion.
Enhanced FIAU powers
The said amendments provide the FIAU with further tools for combatting financial crime. The FIAU has been given the power to set up and run a central bank account registry, which will allow it to acquire information related to the holding or controlling of payment and bank accounts which can be identified by IBAN, as well as safe-deposit boxes held by credit institutions in a timely manner. Subsidiary legislation will provide more detail about the workings of the mechanism and list other national authorities that will have access to the registry.
The FIAU has also been entrusted to supervise implementation and enforcement of any future provisions on restrictions to cash transactions. This follows from the Ministry for Finance’s budget 2020 provisions which seek to limit cash payments to €10,000 when acquiring goods such as immoveable property, certain land and sea vehicles, precious stones and works of art. Upcoming regulation will amplify on this aspect. Other amendments to the PMLA strengthen the FIAU’s powers to cooperate and exchange information both within and outside of Malta. Furthermore, existing powers of the FIAU are being clarified through a number of other amendments.
FIAU structure and operations
The amendments bring about changes to the internal structures of the FIAU to enhance transparency and operational independence. The composition of the FIAU’s Board of Governors, which sets out general policies but does not involve itself in operations, will now include the Malta Gaming Authority and the Commissioner for Revenue. On the other hand, the Office of the Attorney General will no longer be represented. Moreover, the Director of the FIAU will now be appointed on the basis of a public call and will henceforth have exclusive responsibility for staff recruitment.
Publication of administrative penalties and Court of Appeals timeframes
The publication regime for administrative penalties is being changed substantially. The quantum of administrative penalties subject to publication has been increased from €10,000 to €50,000. Publication of penalties below this new threshold may now only occur in an anonymous manner. On the other hand, whereas the FIAU could previously notify publicly such penalties only if confirmed on appeal, it is now empowered to publish upon notification to the subject person. Publication will however have to provide updated information on appeal status and final outcome.
The appeal process before the pertinent Court of Appeal in relation to administrative penalties imposed by the FIAU is now being given a maximum timeframe of 9 months, save for limited exceptions. Appeals before the said Court are to be heard not later than 3 months from the date of filing, and the Court must give a final judgment by no later than 6 months from the commencement of the hearing.
In line with 5AMLD requirements, the Minister for Finance will publish a notice in the Government Gazette which specifies the public functions which are to be considered as prominent public functions in Malta. This will assist subject persons to identify which of their customers are politically exposed persons (PEPs).
Confidentiality and security in information exchange
Other important amendments have also reinforced certain controls in the process of information exchange with third parties. When the FIAU exchanges information with third parties, it shall have to ascertain that the authority or other body receiving such information has adequate rules and procedures that guarantee confidentiality and security of information. The mentioned exchange would need to be subject to certain conditions such as that:
– the information or documents exchanged are only used by the receiving authority or body to perform its supervisory or regulatory functions, and
– the exchanged information is not disseminated to any other person or entity without the express consent of the FIAU.
The introduced amendments to the Act will come into force upon notification by the Minister for Finance in the Government Gazette. Amendments are also anticipated for the Prevention of Money Laundering and Funding of Terrorism Regulations (SL373.01). Other subsidiary legislation is expected to be published soon.
Article written by Mr Mark Zammit and Mr Stefan Briffa.
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