AML/CFT Compliance Services

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At CSB Group, our AML/CFT compliance specialists can support your business in your effort to build the necessary compliance capacity to fulfil your obligations and safely proceed with the attainment of their strategic objectives.

What constitutes a money laundering offence

Money laundering is described as the process by which illegally obtained money is concealed, in order to give the impression that said money is legitimate. This is considered as the most significant process in a monetary criminal activity as criminals must make sure not to attract any superfluous attention to their illegal principal activities.

A money laundering offence is done by disguising the sources, changing the form, or moving the money to places where it is less likely to attract any unwanted attention from the authorities. However, in the Prevention of Money Laundering Act, the definition of money laundering goes beyond this. In fact, it is implied that the passive possession of an illegally obtained property, even if one has just suspicions of any illegalities, tantamount to an offence under the abovementioned act.

Recent Anti Money Laundering Directives

One of the most fundamental AML directives ever transposed into our national laws is without any doubt – the 4th AML Directive. The latter, as per Legal Notice 372 of 2017, paved the way for the Money Laundering and Funding of Terrorism Regulations, 2017 (‘PMLFTR’) to be introduced.

The PMLFTR presented new regulations with a greater emphasis on a risk-based approach to fulfilling AML/CFT obligations. The latter mainly refers to the manner in which customer due diligence shall be carried out.

On the other hand, the most recent AML directives, i.e the 5th and 6th AML Directives, also brought about certain fundamental changes within our national laws regulating money laundering within the country.

On the 7th of February 2020, Act I of 2020 was published in the Government Gazette highlighting a number of amendments intended to transpose the 5th AML Directive into Maltese legislation which brought about significant changes, including but not limited to:

  • The power of the FIAU to enforce cash restrictions,

  • A shorter procedure before the Court of Appeal, and

  • The strengthening of criteria for the selection of FIAU officials and staff.

On the other hand, the 6th AML Directive, being the most recent of the series, is expected to lay down a uniform interpretation of the criminal offence of money laundering across the EU.

Some of the main changes being made as a consequence to the introduction of the above directive include:

  • Enhanced penalties for money laundering felonies,

  • Extension of criminal liability to legal persons such as companies and partnerships and persons acting on their behalf, and

  • That there should be a high level of cooperation when two or more jurisdictions claim jurisdiction for a money laundering offence. The jurisdictions shall liaise with each other and decide which of them will prosecute the alleged offenders.

AML/CFT Legislation in Malta

The legislations in Malta founded with the sole aim of combating the offences of money laundering and the funding of terrorism are mainly three:

  • Prevention of Money Laundering Act – Chapter 373 of the Laws of Malta,

  • Prevention of Money Laundering and Funding of Terrorism Regulations – Subsidiary legislation 373.01, and

  • Criminal Code – Chapter 9 of the Laws of Malta.

Penalties applicable to legal entities or/and individuals

According to the Prevention of Money Laundering Act, any person who is found guilty of an offence regarding money laundering by the criminal court, shall be liable to a punishment of imprisonment of not less than 4 years but not exceeding 18 years, or to a fine of not less than €50,000 but nor more than two million and €2,500,000.