Asteria Advisory

Category: Legal Developments

  • 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.

  • Google – EU competition law breach accusations

    The European Commission sent a statement of objections to the tech firm, alleging that it has breached EU competition law.

    Google is accused of placing onerous requirements on firms using Android and stifling competition.

    Google has 12 weeks within which to reply and, if found to be abusing its dominant position, could face large fines and have to change its practices with respect to companies opting to obtain a licence to use its apps on their products (smartphones).

    Read the BBC article here.

    Article 102 of the Treaty on the Functioning of the European Unioni prohibits abuses of dominant positions as follows:

    Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States.

    Such abuse may, in particular, consist in:

    (a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;

    (b) limiting production, markets or technical development to the prejudice of consumers;

    (c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

    (d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

    In particular, under established case law, a dominant position has been defined as:

    […] a position of economic strength enjoyed by an undertaking which enables it to prevent effective competition being maintained on the relevant market by giving it the power to behave to an appreciable extent independently of its competitors, customers and ultimately of its consumers.

    In general a dominant position derives from a combination of several factors which, taken separately, are not necessarily determinative.

    This definition has now been adopted widely as the concise definition on which dominance is assessed in case law.

    The Court of Justice of the European Union publishes its case law here.

  • EU Single Market Forum to be modernised over 2016

    Note: This post reflects insights from the 2016 EU Single Market Forum. It has been retained for archival purposes. Any queries on updates can be sent through our Contact Form.

    The Government has issued a press release on the new EU Single Market Forum, one of the Commission’s agenda items for 2016.

    One of the aims of the European Commission for 2016 is to modernize the current Single Market Strategy. The Ministry for the Economy, Investment and Small Business, in collaboration with GRTU and the Malta Employer’s Association, held a seminar entitled “Single Market Forum – Tackling internal barriers to movement of goods and labour,” seeking to better gauge the  Maltese position and to listen to suggestions relating to policy changes.  The Forum aims to carry out these objectives.

    The full press release can be found here.