Author: Geraldine Spiteri

FIAU Press Release on Penalties

Following the coming into force of the Various Financial Services Laws (Amendment) Act, 2017 (Act XXVIII of 2017) on the  1st December 2017, publication of administrative penalties imposed by the Financial Intelligence Analysis Unit (“FIAU”) for one or more contraventions of the Prevention of Money Laundering Act (“PMLA”) and/or of the Prevention of Money Laundering and Funding of Terrorism Regulations no longer falls under Article 13A of the PMLA but by the new Article 13C.

Article 13C now provides for the publication of administrative penalties where these exceed €10,000 and have become final and due.  Publication is to take place in accordance with policies and procedures set by the FIAU’s Board of Governors.

The then-existing Policies and Procedures were revised on the 22nd  December 2017, to take into account the changes brought about by the new Act as well as the requirements of Directive (EU) 2015/849 relative to the publication of administrative sanctions.

The revised version of the said policies and procedures is available on the FIAU’s website and can be accessed through the following link – http://www.fiumalta.org/penalties .

The FIAU advises subject persons to become familiar with these policies and procedures.

Queries on the matter are to be sent to legal@fiumalta.org.

Anti-Money Laundering – New Rules in Force

The Fourth Anti-Money Laundering Directive (AMLD 4) aims to strengthen the integrity of the EU’s financial system by combating money laundering and the financing of terrorism.  AMLD 4 relies on the principle that illicit financial flows can damage not just the Member State concerned, but the stability and reputation of the entire EU financial sector.

The evolution of financial crime

Financial crime has become more sophisticated over time, often involving international networks. This has made tighter controls and increased coordination across jurisdictions more important than ever. The EU’s approach aligns closely with international standards, including those set by the Financial Action Task Force (FATF).  

Key Objectives of AMLD 4

One of the core goals of AMLD 4 is to improve transparency by ensuring that the beneficial ownership of companies is identified and recorded. This means tracing the ownership structure to the individual who ultimately owns or controls the entity. The Directive mandates that this information must be accurate, up-to-date, and easily accessible to competent authorities  

Key Aims of Anti-Money Laundering Legislation

Identifying the beneficial owner is key to avoiding would-be criminals from hiding behind a corporate structure.  This is the raison-d’etre behind the due diligence and other obligations underlying the Directive.

The aim is to look for the individual (natural) person at the very end of the line. Information needs not only be adequate and accurate, but also up-to-date, which is why certain checks need to be repeated regularly.

Main changes in AMLD 4

  • Less Reliance on Simplified Due Diligence: Simplified Customer Due Diligence (CDD) is now only allowed in limited cases. Entities must demonstrate low risk before applying reduced checks—and must continue to monitor the relationship.

  • Enhanced Due Diligence (EDD): Required for high-risk clients, such as asset-holding vehicles, cash-intensive businesses, and transactions involving high-risk jurisdictions.

  • Wider Scope of Politically Exposed Persons (PEPs): The definition now includes individuals in domestic public positions, not just foreign ones. All PEPs are automatically subject to EDD.

  • Central Beneficial Ownership Registers: Companies must maintain beneficial ownership information in a register accessible to national authorities like the MFSA and FIAU in Malta.

  • Lower Transaction Thresholds: The threshold for triggering CDD for cash transactions has been reduced from €15,000 to €10,000. For high-risk gambling operations, the threshold is as low as €2,000.

  • Gambling Sector Inclusion: The entire gambling sector now falls under AMLD 4, not just specific areas, and subject persons must apply CDD when applicable.

  • Tax Crimes as Predicate Offences: Tax offences are now clearly predicate offences across all EU jurisdictions.  This harmonises definitions and enables Member States to better enforce the AMLD 4 rules.

  • Increased National Oversight: Member States must perform their own national risk assessments.  This could may lead to Member States introducing stricter national requirements.

Malta’s Implementation

On 20 December 2017, Malta adopted the Prevention of Money Laundering and Funding of Terrorism Regulations, 2017, in line with AMLD 4. These regulations repealed the 2008 rules and introduced risk-based CDD as the standard approach.

Although the FIAU is revising the Implementing Procedures (Part I), entities are advised that in case of conflict between this document and the regulations, the 2017 regulations will take precedence.

Final Thoughts

AMLD 4 marks a significant shift in the EU’s AML framework. By focusing on transparency, harmonisation, and a risk-based approach, AMLD 4 aims to make financial systems more resilient to abuse. Malta’s regulatory framework continues to evolve to meet these standards, reinforcing its commitment to compliance and integrity in financial services.

Ballast Water Management Convention brought into Force

Transport Malta, the competent authority in Malta to regulate shipping and ports, has issued a Merchant Shipping Notice concerning the implementation of the Ballast Water Management Convention.  Known as the Ballast Convention, the treaty was transposed through regulations issued in 2017.

The Merchant Shipping notice addresses owners, operators, masters, of ships, owners’ representatives and recognised organisations. It brings to attention the coming into force of the Convention.

The Convention came into force on the 8th September 2017.  The implementing regulations in Malta came into force on the same date.

Ballast water is carried in ballast tanks and is used to stablise or lower the ship on unloaded voyages.  The rules have been changed to make sure that ballast water is carried in these special, segregated tanks only. Further, water taken in for ballast has to be changed several times during a voyage. This will make sure marine organisms are not carried too far from their natural habitat.

As from this date, all Maltese ships engaged under international voyages to which the Convention applies, must be compliant.   The convention and regulations set standards standards for the management of ballast water and sediments. The requirements include drawing up and maintenance of a Ballast Water Management Plan (BWM Plan).

The convention grants a transition period of up to three months from the date of entry into force.  This time will allow owners to make the necessary arrangements for compliance.  Ships must also maintain Ballast Water Record Book is also to be maintained.

The Regulations may be downloaded from here.

Marine Insight’s Online Resources for Maritime Piracy

Information is available to help to keep informed on piracy on the high seas, as well as how best to deal with this problem

Marine Insight has published links to 28 sources of information, useful to professionals in different aspects of the shipping industry.

 

“With the increase in piracy at the sea, several maritime organisations and defence agencies have started providing online updates on events related to maritime piracy which is taking place around the world,” reads the introduction.  This excellent initiative is worth exploring.

Public Consultation – Antitrust Damages Directive

The Office for Competition has launched a public consultation on implementing the Antitrust Damages Directive in Malta.

The draft legislation relates to Malta’s obligation to transpose Directive 2014/104/EU (the “Antitrust Damages Directive”). This Directive sets rules for actions for damages under national law when competition law is infringed. It applies to both individual and collective actions in EU Member States.

Current Legislation

Maltese law already allows businesses to recover damages for competition law violations under Article 27A of the Competition Act. This is supported by procedural rules in the Code of Organisation and Civil Procedure. Recently, a court has awarded damages in a case involving abuse of competition law.

The Directive and the draft legislation aim to better align private and public enforcement of competition law.  The changes will allow private enforcement of decisions by national competition authorities across all EU Member States.

Key changes

Key changes that the Directive and draft legislation introduce, include:

  • Easier access to evidence: Parties can now obtain court orders to access evidence held by other entities. Courts will ensure that disclosure is proportionate, protecting confidential information.

  • Proof of infringement: A final decision by a national competition authority will serve as full proof of the infringement in that country’s courts. In other Member States, it will be prima facie evidence.

  • Clear limitation periods: Victims of antitrust infringements will have at least 5 years to file claims for damages, starting from when they could have discovered the harm. This period pauses if a competition authority starts an investigation. Once an infringement decision is final, claimants have at least 1 year to file.

  • Passing-on of harm: If an infringer raises prices, indirect customers may be entitled to compensation. The Directive assumes indirect customers suffered harm unless the infringer can prove otherwise.

  • Full compensation: Victims may claim full compensation, covering actual losses, lost profits, and interest from the time the harm occurred.

  • Rebuttable presumption of harm in cartels: Cartels are presumed to cause harm, based on the finding that 90% of cartels lead to price increases. In rare cases where this is not true, infringers can prove no harm occurred.

  • Joint and several liability: All participants in an infringement are liable for the full harm caused, with the possibility of recovering a share from others. However, leniency programme participants who cooperate with authorities will be liable only to their direct and indirect customers. SMEs facing bankruptcy can apply for a narrow exception from joint and several liability