Amendments to the Prevention of Money Laundering and Funding of Terrorism Regulations – Legal Noti

On 30^th April 2021 a legal notice (L.N. 199 of 2021) (the “Legal Notice”) introduced a number of amendments to the ‘Prevention of Money Laundering and Funding of Terrorism Regulations’ (the “PMLFTR”).  The following is a short synopsis of the key amendments:

1. Broader definition of “Supervisory Authority” under regulation 2(1) of the PMLFTR –  for the purposes of the PMLFTR, supervisory authorities shall also include:
   1.  the Malta Business Registry;
   2. the Trade Licensing Unit (limitedly to its licensing function relating to dealers in precious metals and stones); and
   3. the Licensing Board (established under the Real Estate Agents, Property Brokers and Property Consultants Act).
2. Clarification of the definition of “Trust and Company Service Provider” under regulation 2 (1) of the PMLFTR – following an overhaul to the ‘Company Service Providers Act’ whereby amongst introduced amendments, company service providers shall need to apply for authorisation from the Malta Financial Services Authority to act as such, the definition of ‘trust and company service provider’ in the PMLFTR has been clarified by the inclusion of the term ‘authorised’.  To this effect, a trust and company service provider which is “authorised, registered or notified, or required to be authorised, registered or notified”, will be deemed a subject person under the PMLFTR.
3. Amendments reflecting EU Directive 2015/849 (the 4^th Anti-Money Laundering Directive) – amendments to regulations 4 and 13 were carried out to ensure these are aligned with the 4^th Anti-Money Laundering Directive.  The said regulations respectively provide for possible exemptions from PMLFTR requirements and record keeping procedures.
4. Clarification regarding international calls for countermeasures in Regulation 11(11) of the PMLFTR – Regulation 11(11) used to list the obligations of subject persons in instances where there has been an international call for countermeasures, as well as provide the powers of the Financial Intelligence Analysis Unit (the “FIAU”) in such instances.  In terms of the Legal Notice, regulation 11(11) shall only provide the obligations of subject persons in such instances whereas a new sub-regulation shall provide the corresponding powers of the FIAU.
5. Clarification on the imposition of administrative penalties in terms of Regulation 21(4)(b)(ii) of the PMLFTR – Regulation 21(4)(b)(ii) has been clarified to ensure that with respect to serious, repeated or systematic contraventions of the PMLFTR (or any procedures or guidance issued under regulation 17 of the PMLFTR), the FIAU may impose an administrative penalty of not more than five million euro (€5,000,000) on a subject person carrying out a relevant financial business.  Should such administrative penalty be deemed ineffective, an administrative penalty of not more than ten per cent (10%) of the total annual turnover (according to the latest available approved annual financial statements), may be imposed.

Link to the Legal Notice: https://legislation.mt/eli/ln/2021/199/eng