Anti-Money Laundering & Funding of Terrorism
Anti-Money Laundering/ Combating Funding of Terrorism
The concern of money laundering and potential terrorist financing has given rise to the enactment of various rules and regulations. The regulatory framework in Malta comprises the Prevention of Money Laundering Act (‘PMLA’) and the Prevention of Money Laundering and Funding of Terrorism Regulations (‘PMLFTR’). These pieces of legislation are in alignment with European Union legislation and lay down the obligations of subject persons (i.e. persons from sectors which are prone to be used for money laundering and funding of terrorism activities).
What is Money Laundering?
Money laundering is the process of transforming the proceeds of crime (criminal property) into ostensibly legitimate money or other assets.
Originally, the PMLA only applied to a limited list of predicate offences, however since 31st May 2005, with the coming into effect of Legal Notice 176 of 2005, Malta has shifted from having a restricted list of predicate offences to an ‘all crimes’ regime, meaning that ‘any criminal offence’, whenever or wherever it is carried out, may constitute the basis for the offence of money laundering.
What is Funding of Terrorism?
In terms of the Criminal Code (Cap. 9 of the Laws of Malta), funding of terrorism is the process by which a person receives, provides or invites another person to provide, money or other property intending it to be used, or which he has reasonable cause to suspect that it may be used, for the purposes of terrorism. The definition of funding of terrorism therefore cares little about the source of the funds (contrary to the definition of money laundering), but it is what the funds are to be used for that defines its scope.