ANTI MONEY LAUNDERING (AML) REGULATORY UPDATES

Proposed changes to the AML Sixth Directive

On 11^th January 2023 the FIAU informed subject persons of a recently reached political agreement at Council level on the proposed Anti-Money Laundering Regulation (AMLR) and the new 6th Anti-Money Laundering Directive (AMLD6) pending first reading at the European Parliament.

In this regard, the Council has proposed the following changes:

1. The list of obliged entities (‘subject persons’ under Maltese law) is to include persons trading in precious metals, precious stones, and cultural goods as well as jewellers, horologists, and goldsmiths, where the value of the transaction or linked transactions amounts to at least EUR 10,000. 
2. Outsourcing rules are to clarify which tasks may or may not be outsourced particularly in the context of collective investment schemes.  
3. More detailed rules on the scope of an obliged entity’s internal policies, procedures, and controls as well as on the compliance function of an obliged entity are to be included.
4. Beneficial ownership rules are to be developed to harmonize the interpretation of the elements of ‘ownership’ and ‘control’. These rules shall cover instances of beneficial ownership identification in the context of multi-layered structures not only for corporate and other similar legal entities, but also in the case of express trusts, foundations, and collective investment schemes.  Rules on the identification of class of beneficiaries have also been further clarified.
5. The FATF listings of monitored and high-risk jurisdictions in respect to third countries will be automatically replicated by the EU in two corresponding lists.

The amended texts of the proposed AMLR and AMLD6 may be accessed through the following links:

Regulation on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing: Mandate for negotiations with the European Parliament

Annexes to the AML regulation

Directive on the mechanisms to be put in place by the member states for the prevention of the use of the financial system for the purposes of money laundering or terrorist financing and repealing directive

The EU legislative procedure in relation to above is still ongoing, and therefore the above changes are not to be considered as final. The Council is to commence negotiations with the European Parliament for the eventual agreement and adoption of the final version.

FIAU FAQs

On 31^st January 2023 the FIAU published a notice referring to the Frequently Asked Questions (with regards to the Risk Evaluation Questionnaire (FAQ – Risk Evaluation Questionnaire) for the purpose of providing further guidance to subject persons on the REQ exercise.

The Notice covers the following questions, among others:

• Who is obliged to submit the REQ?
• What data period is covered by the REQ?
• What should I do if I am subject person that obtained a license during the same year the REQ was issued?
• Despite being licensed, am I required to submit the REQ even if I am no longer operational during the year of REQ submission?
• What is important to include in the representations?
• Who do subject persons contact should they encounter issues when completing and submitting the REQ?
• What is the enforcement process for non-submission or late submission of the REQ?

In addition to the above, the FIAU has informed subject persons that within the next couple of days, it shall be publishing additional information regarding the upcoming 2023 REQ submission.

Transposition of the Mobility Directive

On 08^th of February 2023 Malta Business Registry published a Notice on transposition of EU Directives (2019/2121 and 2017/1132) regarding cross-border conversions, mergers, and divisions (the “Mobility Directive”) into Maltese law on the 31^st of January 2023.

The Mobility Directive is aimed at further enhancing the freedom of establishment of companies in the sphere of cross-border movement of limited liability companies, particularly cross-border divisions and conversions.

In this regard, three new Regulations under the Companies Act were put forward –  the Companies Act (Cross-border Conversions of Limited Liability Companies) Regulations; the Companies Act (Cross-border Mergers of Limited Liability Companies) Regulations and the Companies Act (Cross-border Divisions of Limited Liability Companies) Regulations, together with the existing Cross-border Mergers of Limited Liability Companies Regulations (S.L. 386.12) are being repealed in order to be replaced by the new already referred to cross-border Regulations.

This legal framework offers a reduction of costs in performing cross-border movement of limited liability companies, especially SMEs, and the enhancement and further realization of advantages associated with the EU’s Single Market.

The new regulations shall encourage free movement, strengthen Malta’s stance in mitigating money laundering, and most important voice employees’ concerns when the company is considering a cross-border mobility operation whilst safeguarding their interests.

Full text of the Notice can be accessed there:

Malta transposes the Mobility Directive

Guidance Note on the listings by OFAC of one Maltese entity and an individual residing in Malta

On 27^th of February 2023 the Sanctions Monitoring Board (SMB) published a Guidance Note in view of the Executive Order of the United States Office of Foreign Assets Control (OFAC) of 24 February 2023.

The Order designated one Maltese entity for being owned or controlled by a designated entity, and an individual residing in Malta designated in light of his involvement in the aforementioned Maltese entity (including the associated entities):

MORETTI, Walter, Orange Grove, Blk F, Flat 3, Triq il-Birbal, Balzan, Malta; DOB 17 Nov 1965; POB Altdorf, Switzerland; nationality Switzerland; alt. nationality Italy; Gender Male; Passport X8346052 (Switzerland) (individual) [RUSSIA-EO14024]. 

VILLA, Frederic Pierre, Malta; DOB 21 Oct 1967; nationality Italy; alt. nationality Switzerland; Gender Male; Passport X6107409 (Switzerland); alt. Passport YA6181234 (Italy) (individual) [RUSSIA-EO14024] (Linked To: STRATTON INVESTMENT GROUP LTD). 

STRATTON INVESTMENT GROUP LTD, The Brewhouse, Mdina Road, CBD Zone 2, CBD, Birkirkara 20210, Malta; Organization Established Date 26 May 2014; Target Type Private Company; Registration Number C 65319 (Malta) [RUSSIA-EO14024] (Linked To: TAERIO LIMITED). 

TAERIO LIMITED, Office No. 3, Hamarain Centre, Deira, Al Muraqqabat, PO Box 95426, Dubai, United Arab Emirates; Malta; Registration Number IBC041510470 (Malta) [RUSSIA-EO14024] (Linked To: MORETTI, Walter). 

Although OFAC sanctions are not enforceable in Malta, the SMB strongly recommends that all Maltese economic operators and financial institutions in the Republic of Malta exercise enhanced due diligence when dealing with the persons, entities and bodies listed by the OFAC and with assets belonging to these persons, entities and bodies.

FF International provides Compliance, AML and Risk Management services.

For further information, please contact:

Franco Falzon C.P.A. LL.M (Managing Director)

E: info@ffinternational.com.mt

T: +356 2010 7771 (office)

M: +356 9989 5679 (mobile)

Disclaimer
While FF International Limited (hereinafter referred to as “FFI”) endeavours to ensure that any information published in articles / publications / memos / updates (including any information published on our website) is accurate as at the time of publication, FFI nor any of their respective directors, partners, officers, employees, or agents make any representation or warranty (express or implied) or accept or will accept any responsibility or liability in relation to the accuracy or completeness of the information contained published in our articles / publications / memos / updates (including any information published on our website) or any other written or oral information made available or published on our articles / publications / memos and updates. Any responsibility or liability in respect of any such information or any inaccuracy or omission arising from any article / publication / memo is expressly disclaimed. In particular, but without prejudice to the generality of the foregoing, no representation or warranty is given as to the achievement or reasonableness of any future projections, estimates, prospects or returns published on our articles / publications / memos / updates (including any information published on our website) . The content of the above article / publication / memo / update and any information published on our website is intended to serve solely as general information only and its purpose is not to provide any specific professional advice whether of a financial, legal, tax or other nature. Since it is recommended that business decisions be based only on qualified professional advice, neither FFI nor any related company belonging to FFI nor any of the respective directors, partners, officers, employees, or agents of FFI will be held liable for any damages which might result as a consequence of relying on the information contained within. FFI including any directors, partners, officers, employees, or agents of FFI and / or any entity related to FFI accept no liability whatsoever for the content of this article / publication / memo / update for the consequences of any actions taken on the basis of the information provided. If you have any questions relating to the accuracy and correctness of the above article / publication / memo / updates or any information published on our website you are kindly requested inform us by sending us an email on info@ffinternational.com.mt