Prevention of Money Laundering

Introduction

In line with Malta’s international commitments to combat Money Laundering, The Prevention of Money Laundering and Funding of Terrorism Regulations, 2003 (the Regulations) have been issued [by means of L.N. 199 of 2003 and subsequently amended by L.N. 42 of 2006] in virtue of article 12 of the Prevention of Money Laundering Act . The text of the said Regulations is closely based on the provisions contained in Directive 2001/97/EC .

The said Regulations have repealed the earlier Prevention of Money Laundering Regulations, 1994 .

What is caught under the Regulations?

The Regulations seek to set down rules, procedures and training guidelines to combat money laundering and funding of terrorism activities in those circumstances when a client or prospective client, whether acting as principal or agent, and whether a legal or natural person, approaches certain Subject Persons as defined in the Regulations with the intention of seeking to form a ‘business relationship’ or to carry out a transaction with such Subject Person in the ambit of such Subject Person’s trade, business, employment or profession.

A ‘business relationship’ is defined as being any arrangement between 2 or more persons, at least one of whom should be acting in the course of his trade, business, employment or profession, as the case may be, the purpose of which is to facilitate a frequent or habitual course of dealings between the said persons and the total amount of any payment/s to be made in the course of that arrangement is not known or capable of being ascertained at that particular point in time.

The Regulations also seek to regulate ‘one-off transactions’ defined as being any transactions (including the opening of an account and a safe custody facility) other than those carried out in the exercise of an established business relationship.

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