Following the issuance of the Implementing Procedures 1 in May 2011, the Malta FIAU has recently published its most comprehensive revisions following its consultation and subsequent suggestion from stakeholders including private sector representatives and the relevant authorities.
The first issuance of the Procedures was intended to provide guidance regarding required customer due diligence. These included alternative procedures, documents, and the allowance of technological alternatives as opposed to traditional paper-based methods. The revisions referred to hereunder, also took into account legislative amendments that were made to the PMLA, the Criminal Code, and the PMLFTR which were introduced in 2014 and 2015. It also seeks to provide additional guidance and clarity on specific AML requirements.
Key amendments to the Procedures are as follows:
- The necessity to obtain additional documents in order to verify the identity and residential address of individuals;
- Amendments to Section 3.1.1.2 to mitigate difficulties suffered by subject persons when attempting to verify the residential address of individuals;
- The introduction of the use of video conferencing, e-IDs, and various other technologies to assist in the conduction of CDD;
- Amendments to the definition of an occasional transaction so that it defines the threshold of €15,000 as the monetary value of the transaction, or series of transactions as opposed to the fee charged by the subject person;
- Further requirements for DD when trying to determine the BO of a company whose shares are issue to bearer;
- Further guidance regarding the identification of BO’s;
- Additional guidance to subject persons relating to the performing of CCD on legal entities and arrangements;
- The addition of Section 3.7 which pertains to the assistance of subject person in terms of their obligations relating to UNSCRs and RU Regulations which impose sanctions on entities and individuals who are known to have involvement or links to the financing of weapons of mass destruction, and, or terrorism;
With regards to Record Keeping Procedures, the following amendments have been introduced:
- Further guidance has been provided on the matter of determining the date of commencement of the five year retention period;
- Amendments relating to Section 5.4 which establishes that records can be retained either physically or electronically with the exception of a few clear exemptions;
- The following changes have been made to Reporting Procedures and Obligations:
- The revision of seniority and command criteria for MLROs under Section 6.1.;
- Ancillary changes have been made to the procedures relating to internal reporting, and the five working day timeframe for reporting STRs and the date from which that timeframe shall start from have also been revised;
- Clarification has been provided on Article 28 of the PMLA which gives the right to the FIAU to postpone suspicious transactions;
There have also been changes and amendments relating to changes in legislation in the PMLA and the PMLFTR which have increased the value of penalties relating to administration that are imposed for AML/CFT breaches.
Please note that the above amendments bear no relation to the transposition of the EU Fourth Anti-Money Laundering Directive. The FIAU is at present, carrying out work to revise the PMLFTR and the related Implementing Procedures Part 1 which will be continued throughout this year. Any changes or amendments to the PMLFTR will be preceded by a consultative period before any changes are made.