This is the first concrete step towards the transposition of EC Directive 2015/849 on our statute books. Malta is already nearly six months behind the dead line for transposition of this directive. The enactment of this law amends certain relevant articles in the PMLA, but we are still behind in implementing the directive in full. That will only come once the new Prevention of Money and Funding of Terrorism Regulations (PMLFTR) are replaced followed by the upgrading of the FIAU Implementing Procedures. The process for this started in July 2017 with the publication of a consultative document of the new regulations. The consultation period closed in early September but here we are now, more than three months after the end of the consultation period and still no date known of when we can expect the new regulations and procedures being published. More than that little has been said about the register of beneficial owners which will provide absolute transparency of the beneficial owners of companies registered in Malta. Currently the local Registry provides full information on the name of the shareholder, but this will now have to move to another level as the name of the ultimate beneficial owner will have to be disclosed. Surely this is a massive challenge for the Registrar of Companies as the relative information can only be outsourced for publication from the company itself. Will non-co-operative companies (that is companies that do not supply information) be struck off? If yes, will be there be a haemorrhage of companies losing their Active status? Only time will tell.
Turning to the new amendment just passed through Parliament one is tempted to ask ‘what changes has this brought about and what is the impact on a Subject Person? Well, as already mentioned above, the effect of this new act is to initiate the introduction of the new AML-CFT regime on our statute books. However, one must keep in mind that the real challenges of the new directive will only need to be faced once the new regulations are published. For example, the new directive makes it compulsory for any subject person to adopt a Risk Based Approach. The new law is completely silent on this simply because this important aspect of the EU directive will be tackled in the new Regulations.
The main changes of the PMLA that have a direct impact on a Subject Person are as follows:
- Name and Shame regime threshold is being increased to Euro 10,000. Currently the FIAU will publish fines above Euro 1,500 and this limit is now being increased to Euro 10,000
- Right of appeal mechanism is being introduced for fines above Euro 5,000. This is a welcome change as currently the regulations completely abolish the right of appeal.
- Fines that are not paid within 21 days will become a civil debt.
- A criminal punishment may now attract a fine of up to a maximum Euro 1 million or five years imprisonment or both fine and imprisonment
- Administrative penalties shall not exceed Euro 5 million or twice the amount of the benefit derived from the contravention, breach or failure to comply, where this can be determined; or 10% of the total annual turnover according to the latest approved available financial statements.
There are other amendments which include the set up of a new National Co-Ordinating committee to combat Money Laundering and Funding of Terrorism and the new legislation regulates further the functions and powers of the FIAU and of its resources.
Where do we go from here? The answer is simple. Are you prepared when the new Regulations will be published? Will it be just another day or a chaotic day when the new Regulations hit our statute books?
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