Malta: A Legal Notice 199 Of 2021

• Amendment to Regulation 2 of the PMLFTR - By means of the Legal Notice, the definition of "Supervisory Authority" provided in the principal regulation has been somewhat broadened. The list of Authorities considered as Supervisory Authorities in terms of the PMLFTR now includes the Malta Business Registry (MBR), the Licensing Board established under the Real Estate Agents, Property Brokers and Property Consultants Act and the Trade Licensing Unit (limited to its licensing function in relation to dealers in precious metals and stones). The incorporation of the abovementioned Authorities within the list provided in Regulation shall provide clarity to the potential cooperation and collaboration that there may be between the FIAU and these new bodies.
  
  
• The definition of "Trust and Company Service Provider" has also been amended via the Legal Notice. The Company Service Providers (CSP) Act has witnessed major changes, with both existing and prospective Service Providers now requiring authorisation by the Malta Financial Services Authority (MFSA) rather than merely being registered with the MFSA or having notified the FIAU. By means of the Legal Notice, the term 'authorised' has been included within paragraph (b) of this definition to make sure there is no uncertainty. Therefore, anyone authorised in terms of the CSP Act as amended will still be considered as carrying out relevant activity and is thus a subject person for the purposes of the PMLFTR.
  
  
• Amendments carried out to Regulation 4 and 13 of the PMLFTR - The European Commission had pointed out that, following the transposition of Directive (EU) 2015/849 (the 'Directive') into Maltese law, some of the provisions of the PMLFTR were not exactly in line with the requirements of the Directive. Therefore, the Legal Notice provides further amendments to the PMLFTR so as to reflect the requirements of the Directive when it comes to possible exemptions from AML/CFT requirements and to subject persons' recordkeeping obligations.

• Amendment to Regulations 11(11) of the PMLTR - Regulation 11(11) previously set out the obligations that had to be abided by subject persons when carrying out occasional transactions, establishing business relationships or carrying out transactions within the context of a business relationship involving non-reputable jurisdictions in respect of which there is an international call for countermeasures. This provision also, prior to these amendments, previously listed the powers that the FIAU had in such cases. Following the amendments, Regulation 11(11) is now limited to setting out the obligations of subject persons, and a new sub-regulation was introduced setting out the powers of the FIAU in such cases.
  
  
• Amendment to Regulation 21 of the PMLFTR - The Legal Notice has carried out amendments to article 21(4)(b)(ii) in order to clarify the powers of the FIAU in relation to the issuing of administrative penalties on subject persons which carry out relevant financial business. Following such amendments to the PMLFTR, it now ensures that the FIAU is empowered to impose an administrative penalty of not more than five million euro (€5,000,000) in the case of serious, repeated, or systematic breaches of any of the requirements which arise from the PMLFTR. If the breaches being considered are so serious that five million euro (€5,000,000) is not deemed sufficient, the FIAU can take into account the subject person's turnover and impose an administrative penalty of not more than ten percent (10%) of the turnover, as long as this results in an administrative penalty that is higher than five million euro (€5,000,000) in value.

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