Today, the 26th of June 2017, marks the deadline for the transposition of the Fourth Anti-Money Laundering Directive[1] by the EU Member States. The Prevention of Money Laundering and Funding of Terrorism Regulations (PMLFTR)[2] and the Prevention of Money Laundering Act (PMLA)[3] transpose the provisions of the Directive into Maltese law and the FIAU Implementing Procedures [4] have been updated earlier this year to reflect the changes brought about by the Fourth AML Directive.
In accordance with the requirements of Article 4 of the PMLFTR, this weekend, the GM group organised a training seminar for all its employees to make them aware of the changes in due diligence and anti-money laundering obligations in terms of the updated FIAU Implementing Procedures. After these changes, due diligence has become noticeably stricter than before. Since the Fourth AML Directive, legal persons are explicitly required to hold adequate, accurate and current information on their beneficial ownership which may now include persons in senior management. The Implementing Procedures put further emphasis on ongoing monitoring while also increasing the penalties for being in default of due diligence obligations which penalties have been raised to the amount € 46,500.
A change which has been welcomed is the amendment to technological obligations of due diligence. For example, a subject person may now retain certified true copies in electronic form while in the case of face-to-face clients, a subject person may also certify documents through scanning documents through the use of software which meets certain specified requirements. In the case of non-face-to-face customers, alternative verification of identity details may be carried out through commercial electronic data providers, video conferencing, reference to electronic copies of identification documents, or use of systems such as e-ids or bank-ids. Records may now be retained in electronic format except where documents are certified by third parties, that is, when the documents are not certified by the subject person itself or its employees.
The revision of the FIAU Implementing Procedures represents a major step forward in the effort to combat the money laundering abreast of the recent efforts that have been taken by the EU. However, the FIAU Implementing Procedures still need to clarify certain aspects of the Fourth AML Directive. In particular it is unclear who will have access to the centralised registers of beneficial ownership (the “CRB”) for trustees and for corporate entities through which the Member States are obliged to request certain information from trustees and corporate entities and to disclose such information on the respective CRB.
[1] Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC <http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:JOL_2015_141_R_0003&from=ES>.
[2] Subsidiary Legislation 373.01 Prevention of Title Money Laundering and Funding of Terrorism Regulations <http://www.fiumalta.org/library/PDF/legislation/2015%20Regulations.pdf>.
[3] Cap. 373 Prevention of Money Laundering Act <http://www.fiumalta.org/library/PDF/legislation/PMLA%20(17.03.2015).pdf>.
[4] Implementing Procedures issued by the Financial Intelligence Analysis Unit in terms of the provisions of the Prevention of Money Laundering and Funding of Terrorism Regulations <http://www.fiumalta.org/library/PDF/misc/27.01.2017-Implementing%20Procedures%20Part%20I2017.pdf>.
