PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 1
SUBSIDIARY LEGISLATION 373.01
PREVENTION OF MONEY LAUNDERING AND 
FUNDING OF TERRORISM  REGULATIONS
1st January, 2018
LEGAL NOTICE 372 of 2017,as amended by Legal Notice 430 of 2018, 77 
of 2019 and 26 and 214 of 2020.
Title and scope. 1. (1) The title of these regulations is the Prevention
of Money Laundering and Funding of Terrorism Regulations.
(2) The objective of these regulations is to implement the
provisions of Directive (EU) 2015/849 of the European Parliamen t
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 terror ist
financing.
Interpretation and 
application.
Amended by:
L.N. 430 of 2018.
L.N. 26 of 2020.
Cap. 373.2. (1) In these regulations, unless the context
otherwise requires:
"the Act" means the Preventi on of Money Laundering Act;
"beneficial owner" means any na tural person or persons who
ultimately own or control the customer and, or the natural pers on or
persons on whose behalf a transaction or activity is being cond ucted,
and:
(a) in the case of a body corporate or a body of
persons, the beneficial owner shall consist of any naturalperson or persons who ultimately own or control that bodycorporate or body of persons through direct or indirectownership of twenty-five per centum  (25%) plus one (1) or
more of the shares or more than twenty-five per centum  (25%)
of the voting rights or an ownership interest of more thantwenty-five per centum  (25%) in that body corporate or body
of persons, including through bearer share holdings, orthrough control via other means, other than a company that islisted on a regulated market which is subject to disclosurerequirements consistent with European Union law orequivalent international standards which ensure adequatetransparency of ownership information:
Provided that a shareholding of twenty-five per
centum  (25%) plus one (1) share or more, or the holding of an
ownership interest or voting rights of more than twenty-fiveper centum  (25%) in the customer shall be an indication of
direct ownership when held directly by a natural person, and ofindirect ownership when held by one or more bodies corporate
or body of persons or through a trust or a similar legalarrangement, or a combination thereof:
2[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
Provided further that if, after having exhausted
all possible means and provided there are no grounds ofsuspicion, no beneficial owner in terms of this paragraph hasbeen identified, subject person s shall consider the natural
person or persons who hold the position of senior managingofficial or officials to be the beneficial owners, and shall ke ep a
record of the actions taken and any difficulties encountered todetermine who the beneficial owner is in terms of thisparagraph.
(b) in the case of trusts the beneficial owner shall
consist of: 
(i) the settlor or settlors;
(ii) the trustee or trustees;
(iii) the protector or protectors, where
applicable;
(iv) the beneficiaries or the class of
beneficiaries as may be applicable; and
(v) any other natural person exercising
ultimate control over the trust by means of direct orindirect ownership or by other means;
(c) in the case of legal entities such as foundations,
and legal arrangements similar to  trusts, the beneficial owner
shall consist of the natural per son or persons holding equivale nt
or similar positions to those re ferred to in paragraph (b);
''business relationship'' mean s a business, professional or
commercial relationship between two or more persons, at least o ne of
which is acting in the course of either relevant financial busi ness or
relevant activity, and which has,  or is expected to have at the  time
when the contact is establishe d, an element of duration;
Cap. 583''casino'' means any premises w here gaming services are made
available to the public by a ga ming licensee and in relation to  which a
concession in terms of article 11( 3)(a) of the Gaming Act has b een
granted, and "casino licensee" i n these regulations shall be co nstrued
accordingly;
Cap. 370''collective investment scheme '', and ''units'' have the same
meanings as are assigned to these  terms respectively in the Inv estment
Services Act;
Cap. 386''company'' has the same meaning  as is assigned to the term in
the Companies Act;
"competent authority" means:
PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 3
(a) any supervisory authority;
(b) the Comptroller of Customs when carrying out
duties under any regulation that may be issued or are in forcefrom time to time relating to the cross-border movement ofcash and other financial instruments; 
(c) the Commissioner for Revenue; 
(d) t h e  Commissioner for V oluntary
Organisations;
(e) the Asset R ecovery Bureau;
(f) the Security Service; and
(g) the Sanctions Monitoring Board;
"correspondent relationship" means:
(a) the provision of banking services by one bank
as the correspondent to another bank as the respondent,including providing a current or other liability account andrelated services, su ch as cash management, international funds
transfers, cheque clearing, p ayable-through accounts and
foreign exchange services;
(b) the relationship between and among
institutions carrying out relevant financial business andactivities equivalent thereto, including where similar services
to those under paragraph (a) are provided by a correspondent
institution to a respondent institution, and including
relationships established for se curities transactions or funds
transfers;
''criminal activity'' has the same meaning as is assigned to th e
term in the Act;
"customer" means a legal or nat ural person who seeks to form,
or who has formed a business relationship, or seeks to carry ou t an
occasional transaction with a person who is acting in the cours e of
either relevant financial bus iness or relevant activity;
Cap. 376"electronic money" has the same meaning as is assigned to the
term in the Financial Institutions Act, and excludes monetary v alue
that:
(a) is stored on instruments that can be used to acquire
goods or services only in the premises used by theissuer or under a commercial agreement with theissuer either within a limited network of serviceproviders or for a limited range of goods or
4[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
services; or
(b) is used to make payment transactions executed by
means of any telecommunication, digital or ITdevice, where the goods or services purchased aredelivered to and are to be used throughtelecommunication, digital or IT device, providedthat the telecommunication, digital or IT operatordoes not act only as an intermediary between thepayment service user and the supplier of the goodsand services;
"European Supervisory Authorities"  has the same meaning as is
assigned to the term in the Act;
''Financial Intelligence Analysis Unit'' has the same meaning a s
is assigned to the term in the Act;
Cap. 9''funding of terrorism'' means the conduct described in article s
328F and 328I both inclusive, of the Criminal Code;
S.L. 583.05."gaming licensee" means any person licensedin terms of the
Gaming Authorisation Regulations to provide a gaming service;
Cap. 583.
S.L. 583.04."gaming service" means making a licensable game which is a
game of chance as defined in the Gaming Act, available forparticipation by players, and, without prejudice to the precedi ng
phrase, "licensable game" shall have the same meaning as is ass igned
to it in the Gaming Definitions Regulations and the subsidiarylegislation existing thereunder; 
Cap. 386 ''group'' has the same meaning as is assigned to the term in th e
Companies Act;
Cap. 403"long term insurance business" m eans the business of insurance
of any of the classes specified in the Second Schedule to the I nsurance
Business Act;
"management body" means the board of directors or, where
there is no board of directors, the body having equivalent powe rs and
functions;
"Member State" has the same meaning as is assigned to the
term in the Act;
''money laundering'' has the same meaning as is assigned to the
term in the Act;
''non-reputable jurisdiction'' means any jurisdiction having
deficiencies in its national anti-money laundering and counter funding
of terrorism regime or having inappropriate and ineffective mea sures
PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 5
for the prevention of money laundering and the funding of terro rism,
taking into account any accredita tion, declaration, public stat ement or
report issued by an international organisation which lays downinternationally accepted standards for the prevention of moneylaundering and for combating the funding of terrorism or whichmonitors adherence thereto, or is a jurisdiction identified by the
European Commission in accordance with Article 9 of Directive(EU) 2015/849;
''occasional transaction'' means any transaction or service
carried out or provided by a subject person for his customer, o ther
than a transaction or service carried out or provided within a business
relationship, and includes the following: 
(a) a transaction amounting to fifteen thousand
euro (€15,000) or more, carried out in a single operation or inseveral operations whi ch appear to be linked;
(b) a transfer of funds as defined under Regulation
(EU) 2015/847 of the European Parliament and of the Councilof 20 May 2015, which e xceeds one thousand euro (€1,000) in
a single operation or in several operations which appear to belinked;
(c) a transaction in cash amounting to ten thousand
euro (€10,000) or more, carried ou t by a natural or legal perso n
trading in goods in a single operation or in several operationswhich appear to be linked;
(d) a transaction amounting to two thousand euro
(€2,000) or more, carried out by gaming or casino licensees ina single operation or in several operations which appear to belinked; 
(e) a transaction amounting to ten thousand euro
(€10,000) or more, carried out by a natural or legal persontrading in works of art or acti ng as intermediary in the sale o f
works of art, in a single operation or in several operationswhich appear to be linked;
(f)  a transaction, independently of the amount
involved, carried out by a subject person whose activities arethose referred to in paragraphs  ( m )  a n d  ( n )  o f  t h e  d e f i n i t i o n
"relevant financial business";
Cap. 590.(g) the provision of VF A agent services to a person
or institution required to be licensed to provide VF A servicesunder the provisions of the Vi rtual Financial Assets Act;
(h) the provision of material aid, assistance or
advice on tax matters;
6[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
(i) the formation of a compa ny, trust, foundation or
a similar structure;
(j) the provision, by real estate agents, of
intermediation services in relation to the letting of immovableproperty where the monthly rent amounts to ten thousand euro(€10,000) or more; and
(k) the storage, by free ports, of works of art the
value of which is equal to or exceeds ten thousand euro(€10,000).
"politically exposed persons" mean s natural persons who are or
have been entrusted with prominent public functions in or outsi de
Malta, other than middle ranking or more junior officials. For the
purposes of this definition the term "natural persons who are o r have
been entrusted with promin ent public functions" means:
(a) Heads of State, Heads of Government,
Ministers, Deputy or Assistant  Ministers, and Parliamentary
Secretaries;
(b) Members of Parliament  or similar legislative
bodies;
(c) Members of the governing bodies of political
parties;
(d) Members of superior, supreme, and
constitutional courts or of other high-level judicial bodieswhose decisions are not subject to further appeal, except inexceptional circumstances;
(e) Members of courts of auditors or of the boards
of central banks;
(f) Ambassadors, charges d’affaires  a n d  h i g h
ranking officers in the armed forces;
(g) Members of the administrative, management or
supervisory boards of Sta te-owned enterprises;
(h) Anyone exercising a function equivalent to
those set out in paragraphs (a) to (f) within an institution of  the
European Union or any other international body; and
(i) Anyone entrusted with a prominent public
function listed in an order issued by the Minister in terms ofarticle 12(5) of the Act from time to time, or included in anyother equivalent list issued by any other jurisdiction orinternational organisation.
PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 7
''relevant activity'' means the activity of the following legal  or
natural persons when acting in the  exercise of their profession al
activities:
(a) auditors, external accountants and tax advisors,
including when acting as provided for in paragraph (c) and anyother person that undertakes to provide, directly, or throughother persons to whom he is relat ed, material aid, assistance o r
advice on tax matters;
(b) real estate agents , including when acting as
intermediaries in relation to the letting of immovable propertywhere the monthly rent amounts to ten thousand euro(€10,000) or more;
(c) notaries and other independent legal
professionals when they parti cipate, whether by acting on
behalf of and for their client in any financial or real estatetransaction or by assisting in t he planning or carrying out of
transactions for their c lients concerning the –
(i) buying and selling of real property or
business entities;
Cap. 370(ii) managing of client money, securities or
other assets, unless the ac tivity is undertaken under a
licence issued under the provisions of the InvestmentServices Act;
(iii) opening or management of bank, savings
or securities accounts;
(iv) organisation of contributions necessary
for the creation, operation or management of companies;
(v) creation, operation or management of
companies, trusts, foundations or similar structures, orwhen acting as a trust or company service provider;
(d) trust and company service providers;
Cap. 330(e) nominee companies holding a warrant under
the Malta Financial Services Authority Act and acting inrelation to dissolved companies r egistered under the said Act;
(f) casino licensees;
(g) gaming licensees;(h) any natural or legal person trading in goods,
but only where a transaction involves payment in cash in anamount equal to ten thousand euro (€10,000) or more whether
8[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
the transaction is carried out i n a single operation or in seve ral
operations which appear to be linked;
(i) any natural or legal person trading in works of
art or acting as intermediary in the sale of works of art,including when this is carried out by art galleries, auctioneer s
and freeports, where the value of  the transaction or a series o f
linked transactions amounts to ten thousand euro (€10,000) ormore; and
(j) free ports when storing works of art the value of
which amounts to ten thousand euro (€10,000) or more, orwhen trading in works of art or acting as intermediaries in thesale of works of art as envi saged under paragraph (i);
''relevant financial business'' means –
Cap. 371(a) any business of banking carried on by a person
or institution who is for the time being licensed, or required to
be licensed, under the provi sions of the Banking Act; 
Cap. 376(b) any activity of a financial institution carried on
by a person or institution who is for the time being licensed, or
required to be licensed, under the provisions of the FinancialInstitutions Act;
Cap. 403(c) any long term insurance business other than
business of reinsurance carried on by a person or institutionwho is for the time being authorised, or required to beauthorised, under the provisions  of the Insurance Business Act;
Cap. 487(d) any insurance intermediary activities carried out
by an insurance intermediary or by a tied insuranceintermediary related to long-term insurance business whichperson or institution is enrolled or required to be enrolled un der
the provisions of the Insurance Distribution Act, other than anatural person who is registered or enrolled and acts on behalf
of a tied insurance intermediary or a person or institutionenrolled as a tied insurance intermediary that does not collectpremiums, or other amounts intended for the policyholder orthe beneficiary; 
S.L. 403.11
S.L. 386. 10
S.L. 386.13(e) any long term insurance business other than
business of reinsurance carried on by a person in accordancewith the Insurance Business (Captive Insurance Undertakingsand Captive Reinsurance Undert akings) Regulations, by a cell
company in accordance with the provisions of the CompaniesAct (Cell Companies Carrying on Business of Insurance)Regulations or by an incorporated cell company and anincorporated cell in accordance with the provisions of theCompanies Act (Incorporated Cell Companies Carrying on
PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 9
Business of Insurance) Regulations;
Cap. 370(f) investment services carried on by a person or
institution licensed or required to be licensed under theprovisions of the Investment Services Act; 
Cap. 370
S.L. 386.15(g) administration services to collective
investment schemes provided by a person or institutionrecognised or required to be re cognised under the provisions
of the Investment Services Act other than administrationservices provided by recognised  incorporated cell companies
in accordance with the Companies Act (RecognisedIncorporated Cell Companies) Regulations; 
Cap. 370(h) a collective investment scheme marketing its
units or shares, licensed, recognised or notified, or required to
be licensed, recognised or notifie d, under the provisions of th e
Investment Services Act; 
Cap. 514(i) any activity other than that of a retirement
scheme or a retirement fund, carried on in relation to aretirement scheme, by a pers on or institution licensed or
required to be licensed under the provisions of the RetirementPensions Act and for the purpose of this paragraph, ''retiremen t
scheme'' and ''retirement fund'' shall have the s ame meaning as
is assigned to them in the  Retirement Pension Act; 
Cap. 345(j) any activity of a regulated market and that of a
central securities depository authorised or required to beauthorised under the provisions o f the Financial Markets Act; 
(k) safe custody services provided by any person
or institution not covered unde r paragraph (a) or (f); 
Cap. 590. (l)  any activity of a VF A agent carried out by a
person or institution registered or required to be registeredunder the provisions of the Vi rtual Financial Assets Act;
Cap. 590. (m) VF A services carried out by a person or
institution licensed or required to be licensed under theprovisions of the Virtual Financial Assets Act;
Cap. 590. (n) the issue of virtual fin ancial assets for offer to
the public in or from Malta in terms of the V irtual FinancialAssets Act; and
(o) any activity under paragraphs (a) to (n) carried
out by branches established in Malta and whose head officesare situated outside Malta
"senior management" means an officer or employee with
sufficient knowledge of the subject person's money laundering a nd
10[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
terrorist financing risk exposure and sufficient seniority to t ake
decisions affecting its risk expos ure, and need not be a member  of the
management body;
''shell institution'' means an institution carrying out activit ies
equivalent to relevant financial business, incorporated in a ju risdiction
in which it has no physical prese nce, involving meaningful mind  and
management, and which is not affiliated with a regulated financ ial
group;
''subject person'' means any lega l or natural person carrying o ut
either relevant financial bus iness or relevant activity;
''supervisory authority'' means – 
(a) the Central Bank of Malta; (b) the Malta Financial Services Authority; 
Cap. 386(c) the Registrar of Companies acting under articles
403 to 423 of the Companies Act; 
Cap. 583(d) the Malta Gaming Authority acting under the
Gaming Act, and any regula tions issued thereunder; 
Cap. 281(e) the Accountancy Board acting under the
Accountancy Profession Act;
Cap. 9''terrorism'' means any act of terrorism as defined in article
328A of the Criminal Code;
''trust and company service provider'' means any natural or
legal person who: 
Cap. 331(a) provides trustee or other fiduciary services,
whether authorised or required t o be authorised, in terms of th e
Trusts and Trustees Act, other than persons acting as trustees in
terms of article 43A  of the said Act;
Cap. 529(b) acts as a company service provider, whether
registered or notified, or required to be registered or notifie d in
terms of the Company Service Providers Act; 
(c) arranges, by way of busi ness, for another person
to act as a trustee of an express trust or a similar legalarrangement; 
Cap. 345(d) arranges, by way of busi ness, for another person
to act as a fiduciary shareholder for another person other than  a
company listed on regulated market that is subject to disclosur e
requirements in conformity with the Financial Markets Act orsubject to equivalent international standards.
PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 11
Cap. 590.  "VF A" has the same meaning as is assigned to it in the
Virtual Financial Assets Act;
"Work of Art" means an original, unique and tangible
object of any kind or material that is created or executed byhand or a limited edition reproduction thereof, and which isconsidered to have an imagina tive, expressive and aesthetic
function, value or appeal, irre spective of artistic quality, an d
provided that the said criteria ar e met includes the following:
(a) paintings, drawings, etchings and decorative
plaques;
(b) engravings, lithogra phs or other prints;
(c) works of sculpture or statuary;(d) tapestries;
(e) photographs printed and signed by the
photographer, including limited edition prints madefrom the exposure; and
(f) ceramic works.
(2) Where these regulations are extended to professions and
other categories of undertakings  other than those referred to i n this
regulation and whose activities are particularly likely to be u sed for
the purposes of money laundering or the funding of terrorism, t hese
regulations shall apply in full or in part as may be establishe d by such
extension in accordance with the provisions of the Act, and theFinancial Intelligence Analysis Unit shall inform the EuropeanCommission accordingly.
(3) The Financial Intelligence Analysis Unit, in conjunction
with the relevant supervisory authority, may require entities i ssuing
electronic money or providing pay ment services whose head offic e is
situated in another Member Sta te, and that are established in M alta in
forms other than a branch, to appoint a central contact point i n Malta
to ensure on behalf of the appoi nting entity compliance with th ese
regulations and to facilitate the monitoring of such compliance ,
including by providing the Financial Intelligence Analysis Unit  and
supervisory authorities with information and documents uponrequest.
(4) These regulations shall also apply where any ‘relevant
financial business’ or any ‘relevant activity’ as defined in th is
regulation is undertaken or performed through the Internet or o ther
electronic means.
(5) The Financial Intelligence Analysis Unit shall cooperate
12[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
with the European Supervisory Authorities for the purposes of
Directive (EU) 2015/849 and it shall provide the EuropeanSupervisory Authorities with any  information which is necessary  t o
carry out their duties under Directive (EU) 2015/849 and underRegulation (EU) No 1093/2010, Regulation (EU) No 1094/2010 andRegulation (EU) No 1095/ 2010.
Specific gaming 
services.3. (1) The Financial Intelligence Analysis Unit, in
conjunction with the relevant su pervisory authority may, follow ing an
appropriate risk assessment, determine that these regulations a re not
to apply, in whole or in part, to specific gaming services on t he basis
of proven low risk of money laundering and funding of terrorismposed by the nature and, where appropriate, the scale of operat ions of
such services.
(2) Any exemption in terms of sub-regulation (1) shall be
revoked if the Financial Intelligence Analysis Unit, in conjunc tion
with the relevant supervisory authority, determines that the ri sk of
money laundering or funding of terrorism posed by such gamingservices can no longer be considered as low.
(3) Any exemption or revocation in terms of this regulation
shall be communicated to t he European Commission.
(4) The provisions of sub-regulation (1) shall not be
applicable to casinos and/or to any casino type games provided via
electronic means of distance communication.
Relevant financial 
business on an 
occasional or very limited basis. 4. (1) The Financial Intelligence Analysis Unit may
determine that legal and natural persons who engage in a financ ial
activity on an occasional or ver y limited basis and where there  is little
risk of money laundering or the funding of terrorism occurring,  ar e
not to be considered as subject pe rsons for the purposes of the se
regulations. 
(2) For the purpose of reaching a determination under sub-
regulation (1) the Financial In telligence Analysis Unit shall c onsider a
legal or natural person to be engaging in a financial activity on an
occasional or very limited basis where all of the following cri teria are
met: 
(a) the total annual turnover of the financial activity
does not exceed fifteen thousand euro (€15,000), and theFinancial Intelligence Analysis Unit may establish differentthresholds not exceeding this amount depending on the type offinancial activity; 
(b) each transaction per customer does not exceed
five hundred euro (€500) whether the transaction is carried outin a single operation or in several operations which appear to be
linked, and the Financial Intelligence Analysis Unit may
PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 13
establish different thresholds not exceeding this amount
depending on the type of financial activity; 
(c) the financial activity is not the main activity
and in absolute terms does not exceed five per centum  (5%) of
the total turnover of the legal  or natural person concerned; 
(d) the financial activity is ancillary and directly
related to the main activity; 
(e) the main activity is not an activity falling
within the definition "relevant financial business" or "relevan t
activity"; and 
(f) the financial activity is provided only to the
customers of the main activity and is not generally offered tothe public: 
Provided that in making a determination under
sub-regulation (1) in relation to a person who engages in theremittance and transfer of money, the Financial IntelligenceAnalysis Unit shall only consider the criteria set out inparagraphs (b) to (f).
(3) In assessing the risk of money laundering or the funding
of terrorism for the purposes of sub-regulation (1), the Financ ial
Intelligence Analysis Unit shall pay particular attention to, a nd
examine any financial activity which is particularly likely, by  its very
nature, to be used or abused for money laundering or the fundin g of
terrorism and the Financial Intelligence Analysis Unit shall no t
consider that financial activity a s representing a low risk of money
laundering or funding of terrorism if the information availablesuggests otherwise. 
(4) In making a determination under sub-regulation (1) the
Financial Intelligence Analysis Unit shall further state the re asons
underlying the decision and shall revoke such determination sho uld
circumstances change. 
(5) The Financial Intelligence A nalysis Unit shall establish
risk-based monitoring mechanisms or other adequate measures as is
practicable to ensure that determinations under sub-regulation (1) are
not abused for money laundering or the funding of terrorism.
(6) The Financial Intelligence Analysis Unit shall inform
the European Commission accordingly of any determination madeunder sub-regulation (1) or its subsequent revocation under sub -
regulation (4).
14[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
Risk-assessment.
Amended:
L.N. 430 of 2018;
L.N. 26 of 2020.5. (1) Every subject person shall take appropriate
steps, proportionate to the nature  and size of its business, to  identify
and assess the risks of money la undering and funding of terrori sm that
arise out of its activities or business, taking into account ri sk factors
including those relating to custo mers, countries or geographica l areas,
products, services, transactions a nd delivery channels and shal l
furthermore take into considera tion any national or supranation al risk
assessments relating to risks o f money laundering and the fundi ng of
terrorism.
(2) Where the Financial Intellig ence Analysis Unit considers
the risk of money laundering and the funding of terrorism inher ent in
any particular relevant activity o r relevant financial business  to be
clear and understood, it may exempt subject persons carrying ou t such
relevant activity or relevant fin ancial business from the oblig ation to
perform risk assessments under this regulation. 
(3) The risk assessment referred to in sub-regulation (1) shall
be properly documented, and shall be made available to the Fina ncial
Intelligence Analysis Unit and any other relevant supervisoryauthority upon demand.
(4) Subject persons shall ensure that the risk assessment
carried out in terms of sub-regulation (1) is regularly reviewe d and
kept up-to-date.
(5) Every subject person shall: – 
(a) have in place and implement the following
measures, policies, controls and  procedures, proportionate to
the nature and size of its business, which address the risksidentified as a result of the risk assessment referred to in su b-
regulation (1): 
(i) customer due diligence measures, record-
keeping procedures and reporting procedures; 
(ii) risk management measures including
customer acceptance policies, customer risk assessmentprocedures, internal controls, compliance management,communications, employee screening policies andprocedures;
(b) take appropriate and proportionate measures
from time to time for the purpose of making employees awareof – 
(i) the measures, policies, controls and
procedures under the provision s of paragraph (a) and any
other relevant policies that are maintained by the subjectperson; and 
PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 15
Cap. 373.
Cap. 9(ii) the provisions of the Prevention of
Money Laundering Act and of these regulations; of theSub-Title IV A "Of Acts of Terrorism, Funding ofTerrorism and Ancillary Offences" of Title IX of Part IIof Book First of the Criminal Code; and of dataprotection requirements;
(c) appoint, where appropriate with regard to the
nature and size of the business, a n officer at management level
whose duties shall include the monitoring of the day-to-dayimplementation of the measures, policies, controls andprocedures adopted unde r this regulation;
(d) implement, where appropriate with regard to
the size and nature of the business, an independent auditfunction to test the internal m easures, policies, controls and
procedures; 
(e) provide employees from time to time with
training in the recognition and handling of operations andtransactions which may be related to proceeds of criminalactivity, money laundering or the funding of terrorism;
(f) monitor and where appropriate enhance the
measures, policies, controls a nd procedures adopted to better
achieve their intended purpose. 
(6) To the extent that it may be applicable, any measures,
policies, controls, procedures a nd changes thereto shall be ado pted
and implemented following senior management approval, and, wher e
applicable, the management body of the subject person may ident ify
one of its members who is to be responsible for the implementat ion of
these measures, policies , controls and procedures.
(7) In this regulation, the term ''employees'' means those
employees whose duties include the handling of either relevantfinancial business or relevant activity. 
(8) Where a natural person undertakes any of the
professional activities as defined under ‘relevant activity’ inregulation 2 as an employee of a l egal person, the obligations under
this regulation shall a pply to that legal person.
Group-wide 
policies and 
procedures.
Amended by:
L.N. 77 of 2019;L.N. 26 of 2020.6. (1) Subject persons that are part of a group shall be
required to implement group-wide policies and procedures that
include the measures established under regulation 5(5), as well  a s
policies and procedures on data protection and the sharing ofinformation within the group for the prevention of money launde ring
and the funding of terrorism. These policies and procedures sha ll be
implemented effectively at the level of branches and majority-o wned
subsidiaries in Member Sta tes and third countries:
16[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
Provided that, unless otherwise instructed by the
Financial Intelligence Analysis Unit and subject to the provisi ons of
regulation 16, a subject person that is part of a group and dis closes
information in accordance with regulation 15(3) to the Financia l
Intelligence Analysis Unit, shall share that disclosed informat ion
within the group for the purposes of preventing and detecting m oney
laundering and the funding of terrorism.
(2) Subject persons having branches or majority-owned
subsidiaries established in another Member State shall ensure t hat
those branches or majority-owned subsidiaries comply with thenational provisions of that Member State, transposing the provi sions
of Directive (EU) 2015/849.
(3) Subject persons having branches or majority-owned
subsidiaries established in third countries where the anti-mone y
laundering and counter-funding of terrorism measures are lessstringent than those under these regulations shall ensure that those
branches or majority-owned subsidiaries implement the provision s of
these regulations in so far as that third country’s legislation  permits
the implementation of such provisions. 
(4) Where subject persons ha ve branches or majority-owned
subsidiaries established in third  countries, and the legislatio n of such
third countries does not permit the implementation of the polic ies and
procedures under sub-regulation (1), subject persons shall ensu re that
those branches and majority-owned subsidiaries apply additionalmeasures to effectively handle the risk of money laundering andfunding of terrorism and shall immediately inform the FinancialIntelligence Analysis Unit about these circumstances and the
measures taken: 
Provided that where the additional measures are not
adequate, the Financial Intell igence Analysis Unit shall, in
collaboration with any relevant supervisory authority, exerciseadditional supervisory actions, in cluding requiring those subje ct
persons not to establish or to te rminate existent business rela tionships
and not to undertake transactions  and, where necessary require those
subject persons to clos e down their operations in the third cou ntry.
(5) Where the Financial Intelligence Analysis Unit is in
possession of information in acco rdance with sub-regulation (4)  i t
shall, where applicable, inform t he relevant supervisory author ities,
the relevant supervisory authorities of the other Member States , and
the European Supervisory Authorities, and shall seek to coopera te and
coordinate its actions with suc h relevant supervisory authoriti es and
the European Supervisory Authorities, as necessary.
(6) In fulfilling their obligations under sub-regulation (4),
subject persons carrying out relevant financial business shall comply
PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 17
with any regulatory technical standards developed by the Europe an
Supervisory Authorities in accordance with Article 45(6) of Dir ective
(EU) 2015/849 which may be adopted by the European Commissionsetting out the minimum action to be taken. 
Customer due 
diligence. Amended by:
L.N. 26 of 2020.7. (1) Customer due diligence measures shall consist
in:
(a) the identification of the customer, and the
verification of the identity of the customer on the basis ofdocuments, data or information obtained from a reliable andindependent source, including, w here available, electronic
identification means issued under electronic identificationschemes, or relevant trust services as set out in Regulation(EU) No 910/2014, or any other secure, remote or electronicidentification process approved by the Financial Intelligence
Analysis Unit under procedures i ssued in terms of regulation
17:
Provided that where the customer is a body
corporate, a body of persons, or any other form of legal entityor arrangement, subject persons shall also verify the legalstatus of the customer and shall also identify all directors an d,
where the customer does not have directors, all such otherpersons vested with its admin istration and representation:
Provided further that where the customer is a
body corporate, a body of persons or any other form of legalentity incorporated in a Member State or a trust or similar leg al
arrangement administered in a Mem ber State, that is subject to
the registration of beneficial owner information, subjectpersons shall also obtain proof that such beneficial ownershipinformation has been duly registered with a designatedbeneficial ownership register.
(b) the identification, where applicable, of the
beneficial owners, and the taking of reasonable measures toverify their identity so that t he subject person is satisfied o f
knowing who the beneficial owners are, including, in the caseof a body corporate, foundations, trusts and similar legalarrangements, the taking of rea sonable measures to understand
the ownership and control structure of the customer;
(c) assessing and, as appropriate, obtaining
information on the purpose and intended nature of the businessrelationship, and establishing th e business and risk profile of
the customer; 
(d) conducting ongoing monitoring of the business
relationship. 
18[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
(2) The ongoing monitoring of a business relationship for the
purposes of sub-regulation (1) shall consist in: 
(a) the scrutiny of transactions undertaken
throughout the course of the relationship to ensure that thetransactions being undertaken are consistent with the subjectperson’s knowledge of the customer and of his business andrisk profile, including, where necessary, the source of funds;and
(b) ensuring that the documents, data or
information held by the subjec t person are reviewed and kept
up-to-date:
Provided that in the case of subject persons
providing VF A agent services as defined in paragraph (l) of thedefinition "relevant financial business", the on-goingmonitoring of a business relatio nship shall be limited to the
provisions of paragraph (b).
(3) Where a person purports to act on behalf of a customer,
in addition to identifying and verifying the identity of the cu stomer
and, where applicable, the benefi cial owner, subject persons sh all
ensure that such person is duly authorised in writing to act on  behalf
of the customer and shall identify and verify the identity of t hat
person.
(4) Subject persons shall not keep anonymous accounts or
anonymous safe-deposit boxes, o r accounts or safe-deposit boxes  in
fictitious names.
(5) Without prejudice to the provisions of regulation 8,
customer due diligence measures shall be applied to all custome rs
when: 
(a) establishing a business relationship;
(b) carrying out an occasional transaction; and(c) the subject person has knowledge or suspicion
of proceeds of criminal activity, money laundering or thefunding of terrorism, regardless  of any derogation, exemption
or threshold.
 (6) Customer due diligence measures under this regulation
shall also be applied, at appropriate times, to existing custom ers on a
risk-sensitive basis and also w henever any of the following
circumstances occur:
(a) when the subject person becomes aware that the
relevant circumstances surrounding a business
PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 19
relationship have changed; or
S.L. 123.127(b) when the subject person has a legal duty to contact
the customer for the purpose of reviewing andupdating any information relating to the beneficialowners, including when the subject person has sucha duty in terms of the Cooperation With OtherJurisdiction On Tax Matters Regulations.
(7) Customer due diligence measures under these
regulations shall be repeated whe never, in relation to a busine ss
relationship, doubts arise about the veracity or adequacy of th e
previously obtained customer i dentification information. 
(8) The extent of the customer due diligence measures shall
be commensurate to the risks of money laundering and funding ofterrorism identified through the risk assessments carried out i n terms
of regulation 5 and may vary from case to case.
(9) Subject persons providing long-term insurance business
shall, in addition to identifying and verifying the identity of  t h e
customer and, where applicable, the beneficial owner in terms o f sub-
regulations (1)(a) and (b), carry out the following customer du e
diligence measures on the beneficiaries of long-term insurancepolicies:
(a) where the beneficiaries are specifically named
natural persons, legal entities or  arrangements, subject person s
shall identify such beneficiaries; 
(b) where the beneficiaries are designated by
characteristics, class or othe r means, subject persons shall
obtain sufficient information concerning those beneficiaries tobe able to identify them  at the time of payout;
( c ) w h e r e  t h e  b e n e f i c i a r i e s  a s s i g n  a n y  o f  t h e i r
rights vested under the policy, subject persons shall, at the t ime
of becoming aware of the assignment, identify the naturalpersons, legal entities or arrang ements receiving for their own
benefit the value of  the policy assigned;
(d) verify the identity of the beneficiaries at the
time of payout. 
(10) A customer, or any person purporting to act on his
behalf, who makes a false declar ation or a false representation  or who
produces false documentation for the purposes of this regulatio n shall
be guilty of an offence and shall be liable, on conviction, to a fine
(multa ) not exceeding fifty thousand euro (€50,000) or to
imprisonment for a term not excee ding two years or to both such  fine
and imprisonment.
20[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
(11) Subject persons carrying out relevant financial business
involving the transfer of funds shall comply with the provision s of
Regulation (EU) 2015/847 of the European Parliament and of theCouncil of 20 May 2015 on information accompanying transfers offunds and repealing Regu lation (EC) No 1781/2006.
Electronic money.
Added by:L.N. 26 of 2020.7A. (1) The Financial Intelligence Analysis Unit, with
the concurrence of the relevant supervisory authority may, on t he basis
of an appropriate risk assessmen t which demonstrates a low risk  o f
money laundering and funding of terrorism, exempt subject perso ns
issuing electronic money from the carrying out of customer duediligence measures under regulation 7(1)(a) to (c) where all th e
following criteria are met:
(a) the payment instrument is not reloadable, or is
subject to a maximum monthly payment transaction limit of
one hundred fifty euro (€150) whic h can be used only in Malta;
(b) the maximum amount stored electronically does
not exceed one hundred fifty euro (€150);
(c) the payment instrument is used exclusively to
purchase goods or services;
(d) the payment instrument cannot be funded with
anonymous electronic money; and
(e) the issuer carries out sufficient monitoring of the
transactions and the business relationship to enable thedetection of unusual or s uspicious transactions:
Provided that this exemption shall not be applied in the
case of redemption in cash or cash withdrawals of the monetary value
stored on the payment instrument where the amount redeemed orwithdrawn would exceed fifty euro (€50), or in the case of remo te
payment transactions where the a mount paid exceeds fifty euro ( €50).
(2) Subject persons issuing electronic money may still apply
simplified customer due diligence measures where a low risk of money
laundering and funding of terrorism is identified in accordance  with
regulation 10, even where the exemption envisaged under sub-regulation (1) has not been granted or has been granted subject  to the
criteria envisaged in the  said sub-regulation (1).
(3) Subject persons acquiring payment transactions shall
only accept payments carried out with anonymous prepaid instrum ents
issued in other Member States and third countries where these a re
issued subject to criteria equivalent to those envisaged under sub-
regulation (1).
(4) In this regulation:
PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 21
"acquiring of payment transactions" means a payment
service provided by a payment service provider contractingwith a payee to accept and proc ess payment transactions which
results in a transfer of funds to the payee;
Cap. 376."payment transaction" has the same meaning as is
assigned to the term under the Second Schedule to theFinancial Institutions Act;
"remote payment transaction" means a payment transaction
initiated via internet or through  a device that can be used for  distance
communication.
Verification of 
identification.
Amended by:
L.N. 214 of 2020.8. (1) Subject persons shall verify the identity of the
customer and, where applicable, the identity of the beneficial owner,
before the establishment of a business relationship or the carr ying out
of an occasiona l transaction.
(2) Notwithstanding the provisions of sub-regulation (1),
subject persons may complete the verification after the establi shment
of a business relationship where this is necessary so as not tointerrupt the normal conduct of business provided that the risk  o f
money laundering or the funding of terrorism is low and, provid ed
further, that the verification pr ocedures be completed as soon as is
reasonably practicable after the establishment of the businessrelationship.
(3) Notwithstanding the provisions of sub-regulations (1)
and (2), subject persons carrying out relevant financial busine ss may
open an account, including accounts that permit transactions intransferable securities, as may be required by the customer pro vided
that adequate safeguards are put  in place to ensure that no
transactions are carried out through the account until the veri fication
procedures in accordance with sub-regulation (1) have beensatisfactorily completed.
(4) Where the beneficiaries of a trust, legal entity or
arrangement are designated by pa rticular characteristics or cla ss, the
subject person shall identify and verify the identity of thebeneficiaries at the time of payout or at the time the benefici aries
exercise their vested rights:
Provided that, before the establishment of a business
relationship or the carrying out o f an occasional transaction, the
subject person shall obtain sufficient information concerning t he
beneficiaries to be able to identify and verify their identity at the time
of payout or at the time the bene ficiaries seek to exercise the ir vested
rights. 
(5) Where a subject person is unable to comply with
regulation 7(1)(a), (b) and (c), the customer due diligence pro cedures
22[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
shall require that subject person not to carry out any transact ion
through the account, not to establish the business relationship  n o r
carry out any occasional transac tion, and to terminate any busi ness
relationship and to consider disclosing that information in acc ordance
with regulation 15(3) to the Fin ancial Intelligence Analysis Un it:
Provided that, where to refrain in such manner would
likely tip-off the customer abou t the submission of a disclosur e in
terms of regulation 15(3) or a potential money laundering or fu nding
of terrorism analysis or investig ation, that business shall pro ceed on
condition that a disclosure is immediately lodged with the Fina ncial
Intelligence Analysis Unit in acco rdance with regulation 15(3):
Provided further that subject persons carrying out a
relevant activity under paragra ph (a) or paragra ph (c) of the d efinition
''relevant activity'' shall not be bound by the provisions of t his sub-
regulation if those subject pers ons are acting in the course of
ascertaining the legal position of  their client or performing t heir
responsibilities of defending or representing that client in, o r
concerning, judicial procedures, including providing advice on
instituting or avoiding procedures.
(6) Without prejudice to sub-regulation (5), a subject person
who is in possession of funds of a customer or a potential cust omer
and who pursuant to sub-regulation (5) decides to terminate or not to
establish a business relationshi p ,  o r  n o t  t o  c a r r y  o u t  a n  o c c a s ional
transaction and to return, release or transfer those funds, sha ll as far as
reasonably possible return those funds to the same source from where
they originated and through the same financial channels by whic h the
subject person came into possessio n of the funds, unless an ord er has
been made or a notice has been issued in terms of the Act or th ese
regulations prohibiting th e release of such funds.
Additional 
provisions on 
customer due 
diligence for casino and gaming 
licensees. 9. (1) Notwithstanding the provisions of regulation
8(1) and without prejudice to the provisions of regulation 7(5) (c),
casino and gaming licensees shall apply customer due diligencemeasures when carrying out trans actions that amount to or excee d two
thousand euro (€2,000) or more, whether carried out within thecontext of a business re lationship or otherwise. 
(2) In addition to complying with the provisions of sub-
regulation (1) and regulation 8, a casino licensee shall:
Cap. 583(a) not allow any person to enter the casino unless
such person has been satisfactor ily identified pursuant to the
provisions of the Gaming Act; 
(b) ensure that the particulars relating to the
identity of a person exchanging chips or tokens to the value oftwo thousand euro (€2,000) or more is matched with, and crossreferred to, the particulars relating to the identity of the pe rson
PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 23
exchanging cash, cheques or bank drafts, or making a credit or
debit card payment in exchange f or chips or tokens, and shall
further ensure that chips or tokens are derived from winningsmade whilst playing a game o r games at the casino; and 
(c) ensure that the provisions of paragraph (b) are
also applied in cases where in any one gaming session a person
carries out transactions which are individually for an amountof less than two thousand euro (€2,000) but which in aggregateequal or exceed such amount.
Simplified 
customer due 
diligence.Amended by:
L.N. 26 of 2020.10. (1) Simplified customer due diligence may be
applied: 
(a) in relation to activities or services that are
determined by the Financial Intelligence Analysis Unit torepresent a low risk of money laundering and funding ofterrorism, having taken into consideration the findings of anynational risk assessment and a ny other relevant factors as may
be deemed appropriate; or
(b) where, on the basis o f the risk assessments
carried out in accordance with regulation 5, the subject persondetermines that any occasiona l transaction or a business
relationship represents a low risk of money laundering andfunding of terrorism.
(2) Simplified customer due diligence shall not constitute an
exemption from all customer due diligence measures as envisagedunder regulation 7(1), but subjec t persons may determine the
applicability and extent thereof in a manner that is commensura te to
the low risk identified:
Provided that subject persons shall carry out sufficient
on-going monitoring in terms of regulation 7(2)(a) to be able t o
detect unusual and susp icious transactions.
(3) Nothing contained in this regulation shall apply where
the subject person has knowledge or suspicion of proceeds ofcriminal activity, money launderi ng or the funding of terrorism .
Enhanced 
customer due 
diligence. Amended by:
L.N. 26 of 2020;
L.N. 214 of 2020.11. (1) In addition to the requirements under
regulation 7, subject persons shall apply enhanced customer duediligence measures in the  following situations: 
(a) in relation to activities or services that are
determined by the Financial Intelligence Analysis Unit torepresent a high risk of money laundering or funding ofterrorism, having taken into consideration the findings of anynational risk assessment and a ny other relevant factors as may
be deemed appropriate;
24[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
(b) where, on the basis of the risk assessments
carried out in accordance with regulation 5, the subject persondetermines that an occasiona l transaction, a business
relationship or any transaction represents a high risk of moneylaundering or funding of terrorism; and 
(c) in the cases referred to in sub-regulations (3) to
(10).
(2) Subject persons shall ensure that the enhanced customer
due diligence measures applied in the cases referred to in para graphs
(a) and (b) of sub-regulation (1) are appropriate to manage andmitigate the high risk of money la undering or funding of terror ism.
(3) With respect to correspondent relationships with
institutions from a country other  than a Member State, subject persons
shall ensure that –
(a) they gather sufficient information about the
respondent institution to understand fully the nature of therespondent’s business and to determine from publicly availableinformation the reputation of the institution and the quality o f
supervision on that institution,including whether therespondent institution has been subject to any moneylaundering or funding of terrorism investigation, or regulatoryaction; 
(b) they assess the adequacy and effectiveness of
the respondent institution’s measures, policies, controls andprocedures for the prevention of money laundering and thefunding of terrorism; 
(c) the prior approval of senior management for the
establishment of new correspon dent relationships is obtained;
(d) they clearly understand and document the
respective responsibilities of eac h institution for the prevent ion
of money laundering and the funding of terrorism; 
(e) with respect to payable-through accounts, they
are satisfied that the respondent institution has verified theidentity of and performed on-going due diligence on thecustomers having direct access to the accounts of therespondent institution and that they are provided with relevantcustomer due diligence data upon request.
(4) Subject persons carrying ou t relevant financial business
shall –
(a) not enter into, or continue, a correspondent
relationship with a shell institution;
PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 25
(b) take appropriate measures to ensure that they
do not enter into, or continue, a correspondent relationshipwith a respondent institution which is known to permit itsaccounts to be used by a shell institution.
(5) Subject persons shall ensure that the risk management
procedures maintained in accordance with regulation 5(5)(a) areconducive to determine whether a c ustomer or a beneficial owner  is a
politically exposed person, and when undertaking occasional
transactions for, or establishing or continuing business relati onships
with politically exposed persons shall:-
(a) require the approval of senior management;
(b) take adequate measures to establish the source
of wealth and source of funds; and
(c) conduct enhanced ongoing monitoring of such
business relationships.
(6) In addition to the requirements under sub-regulation (5),
in case of long-term insurance bus iness subject persons shall t ake
reasonable measures to determine whether the beneficiaries of apolicy and, where applicable, the beneficial owner of the benef iciary
are politically exposed persons, which measures shall be taken no
later than the time of payout or the time of the assignment, in  whole
or in part, of the policy: 
Provided that where the beneficiaries of the policy or,
where applicable, the beneficial owner of the beneficiary are
politically exposed persons, subj ect persons shall inform senio r
management before proceeding with the payout under the policy a nd
shall conduct enhanced scrutiny of the entire business relation ship
with the policy holder:
Provided further that, where the beneficiaries of a policy
or, where applicable, the beneficial owner of the beneficiary a re
politically exposed persons and th e subject person has addition al
indications of a higher risk of money laundering or funding ofterrorism, the subject person shall consider whether it is to s ubmit a
disclosure to the Financial Intelligence Analysis Unit in accor dance
with regulation 15(3).
 (7) Without prejudice to the application of enhanced
customer due diligence measures on a risk sensitive basis, wher e a
politically exposed person is no longer entrusted with a promin ent
public function, subject persons shall be required to apply enh anced
due diligence measures in accordance with sub-regulations (5) a nd
(6) for at least twelve months after the date on which that per son
ceased to be entrusted with  a prominent public function.
26[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
(8) Sub-regulations (5) and (6) shall also be applicable to
family members or persons known to  be close associates of polit ically
exposed persons, and , for the purposes of  this sub-regulation:
"family members" includes:
(i) the spouse, or a person considered to be
equivalent to a spouse;
(ii) the children and their spouses, or persons
considered to be equivalent to a spouse; and
(iii) the parents.
"persons known to be cl ose associates" means:
(i) a natural person known to have joint
beneficial ownership of a body corporate or any otherform of legal arrangement, or any other close businessrelations, with that politically exposed person; 
(ii) a natural person who has sole beneficial
ownership of a body corporate or any other form of legalarrangement that is known to have been established forthe benefit of that po litically exposed person.
(9) Subject persons shall, as far as reasonably possible,
examine the purpose and backgr ound of all transactions that:
(a) are complex;
(b) are unusually large;(c) are conducted in an unusual pattern; or
(d) have no apparent econo mic or lawful purpose:
Provided that in such cases subject persons shall increase
the degree and nature of monitoring of the business relationshi p, to
determine whether those transactions or activities are suspicio us in
terms of regulation 15(3).
(10)  Where occasional transact ions or business relationships
or transactions involve non-reputa ble jurisdictions, subject pe rsons
shall:
(a) obtain additional information on the identity of the
customer and, where applicable, the beneficialowners;
(b) obtain additional information on the intended nature
of business relationships;
PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 27
(c) obtain additional information on the source of
wealth and source of funds of the customer, and,where applicable, the beneficial owners;
(d) obtain information on th e purpose of prospective or
executed transactions;
(e) obtain the approval of senior management when
establishing business relationships, carrying outoccasional transactions or continuing businessrelationships;
(f) conduct enhanced monitoring of business
relationships by increasing the frequency ofmonitoring, and identifying and, where appropriate,examining patterns of transactions that requirefurther scrutiny; and
(g) where applicable, require that the first payment be
carried out through a bank account in thecustomer’s name held with a bank subject tocustomer due diligence obligations that areconsistent with those laid down under theseregulations.
(11) Where occasional transactions or business relationships or
transactions involve non-reputable jurisdictions in respect of which
there is an international call fo r counter-measures, subject pe rsons
shall inform in writing the Financial Intelligence Analysis Uni t, and
shall apply one or more of the following enhanced customer duediligence measures:
(a) carry out additional customer due diligence
measures;
(b) introduce enhanced reporting mechanisms or
systematic reporting of transactions;
(c) limit occasional transactions or business
relationships involving such non-reputablejurisdictions:
Provided that in the cases referred to in this sub-
regulation the Financial Intelligence Analysis Unitor the relevant supervisory authority shall applyany one or more of the following counter-measures:
(d) refuse the establishment in Malta of branches,
representative offices or subsidiaries of persons orentities undertaking activities equivalent to relevantfinancial business or relevant activity which are
28[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
situated in such non-reputable jurisdictions, or
otherwise take into account the fact that that personor entity is situated in a non-reputable jurisdictionthat has deficiencies in its anti-money launderingand counter funding of terrorism regime;
(e) prohibit subject persons from establishing branches
or representative offices in such a non-reputablejurisdiction or otherwise take into account the factthat the branch or representative office would besituated in a non-reputable jurisdiction that hasdeficiencies in its anti-money laundering andcounter funding of terrorism regime;
(f) carry out increased compliance monitoring or
require increased external audit requirements onbranches and subsidiaries of persons and entitiesreferred to in paragraph (a), established in Malta;
(g) require external audit requirements on subject
persons forming part of a group in respect of theirbranches or subsidiaries in such non-reputablejurisdictions; and
(h) require subject persons carrying out relevant
financial business to review, amend or terminatecorrespondent relationships with respondentinstitutions established in such non-reputablejurisdiction.
(12) The provisions of the proviso to sub-regulation (11) shall
not prejudice the ability of the Financial Intelligence Analysi s Unit, or
a supervisory authority, acting pursuant to its powers at law, to apply,
in the case referred to in this sub-regulation, measures other than
those envisaged in that proviso, or to apply measures so envisa ged in
other situations as deemed appropriate.
(13) When taking any measures as set out in the proviso to
sub-regulation (11), the Financial Intelligence Analysis Unit a nd the
relevant supervisory authorities shall take into account, asappropriate, relevant evaluations, assessments or reports drawn  up by
international organisations, which lay down or monitor adherenc e
with international standards for the prevention of money launde ring
and for combating the funding of terrorism, in relation to the risks
posed by individual third countries, and shall duly notify the European
Commission of any measures taken.
PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 29
Reliance on 
performance by 
other subject 
persons or third parties. 
Amended by:
L.N. 214 of 2020.12. (1) Subject persons may rely on another subject
person or a third party to fulfil the customer due diligencerequirements provided for under regulation 7(1)(a) to (c), with  t h e
subject person placing reliance remaining ultimately responsibl e for
compliance with those requirements. 
(2) For the purposes of this regulation "third party" shall
mean any person or institution, including member organisations or
representative bodies of such p erson or institution, situated i n a
Member State other than Malta  or a third country that:
(a) apply customer due diligence requirements and
record keeping requirements that are consistent with those laiddown under these regulations; and 
(b) have their compliance with anti-money
laundering and counter-financing terrorism requirementsmonitored in a manner which is consistent with Section 2 ofChapter VI of Directive (EU) 2015/849: 
Provided that subject persons may not rely on
third parties from a non-reputable jurisdiction, or any otherjurisdiction which is considered by the subject person topresent a high risk of money laundering or funding ofterrorism unless such third parties are branches or majority-owned subsidiaries of persons or institutions established in aMember State subject to national provisions implementingDirective (EU) 2015/849 and which comply fully with group-wide policies and procedures equivalent to those mentionedunder regulation 6.
(3) Subject persons relying on another subject person or a
third party shall obtain from that other subject person or thir d party
the information required in accordance with the provisions unde r
regulation 7(1)(a) to (c).
(4) Subject persons relying on another subject person or a
third party shall take adequate s teps to ensure that, upon requ est, that
other subject person or third p arty shall immediately forward t o them
relevant copies of the identification and verification data rel evant to
the customer and the beneficial owner and other relevantdocumentation required in terms o f regulation 7(1)(a) to (c).
(5) Subject persons that are branches or majority owned
subsidiaries of persons or ins titutions established in a Member  State
or a third country other than Malta and subject persons that ha ve
branches or majority owned subsidiaries in a Member State or a third
country shall be considered to comply with the provisions of su b-
regulations (2) to (4) through the group’s policies and procedu res,
where all the following conditions are met:
30[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
(a) the subject person relies on information
provided by a third party that  is part of the same group;
(b) that group applies customer due diligence
measures, record keeping measur es and anti-money laundering
and counter-funding of terrorism policies and proceduresequivalent to those unde r these regulations;
(c) the effective implementation of the measures
and requirements referred to in pa ragraph (b) at group level is
subject to supervision by a relevant authority.
(6) This regulation shall not apply to outsourcing or agency
relationships where, on the basis of a contractual agreement, t he
outsourcing service provider or a gent is to be regarded as part  of the
subject person.
Record keeping 
procedures. 
Amended by:
L.N. 26 of 2020.13. (1) Subject persons shall retain the following
documents and information for th e purposes of the prevention,
detection, analysis and investigation of money laundering or fu nding
of terrorism activities by the Fi nancial Intelligence Analysis Unit,
relevant supervisory authorities,  or law enforcement agencies i n
accordance with the provisions of applicable law: 
(a) in relation to any business relationship that is
formed or an occasional transaction that is carried out, thecustomer due diligence documentation, data and informationobtained in fulfilment of the requirements under regulations 7to 12;
(b) supporting evidence and records necessary to
reconstruct all transactions carried out by that person in thecourse of a business relationship or any occasional transaction ,
which shall include original documents or other copiesadmissible in court proceedings; 
(c) a record of any disclosures made to the
Financial Intelligence Analysis Unit in accordance withregulation 15(3); 
(d) a record of any internal reports made in
accordance with regulation 15(1)(a); 
(e) a record of any written determinations made in
accordance with regulation 15(1)(b); 
(f) a record of any training provided in accordance
with regulation 5(5)(e); and 
(g) any other document, data or information which
the Financial Intelligence Analysis Unit may require to be
PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 31
maintained in accordance with procedures and guidance issued
in terms of regulation 17.
(2) The documentation, data or information referred to in
sub-regulation (1) shall be kept for a period of five yearscommencing on – 
(a) in relation to the documentation, data or
information described in paragraph (a), the date when thebusiness relationship ends or wh en the occasional transaction
is carried out, and where the formalities necessary to end abusiness relationship could not b e observed, the date on which
the last transaction in the cour se of that business relationshi p
was carried out; 
(b) in relation to the supporting evidence and
records described in paragraph ( b), the date when all dealings
taking place in the course of the transaction in question werecompleted;
(c) in relation to the records described in
paragraphs (c) to (e), the l ater between the following:
(i) the date when the business relationships
ends or the occasional tra nsaction is carried out; or
(ii) the date when the report or
determination is submitted or drawn up, as the case maybe;
(d) in relation to the records described in
paragraph (f), the date when the event referred to therein took
place: 
Provided that, in relation to records relating to
an occasional transaction consisting in several operationswhich appear to be linked, the a foresaid period of five years
shall commence on the date on which the last operation tookplace:
Provided further that, the period of five years
may be further extended, up to a maximum retention period often years, where such extension would be considerednecessary for the purposes of the prevention, detection,analysis and investigation of money laundering or funding ofterrorism activities by the Financial Intelligence AnalysisUnit, relevant supervisory authorities or law enforcementagencies. 
(3) Subject persons shall ensure that, upon request, all
records maintained in accordance with this regulation are made
32[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
available to the Financial Intelligence Analysis Unit and, as m ay be
allowed by law, to relevant supervisory authorities and lawenforcement agencies, for the purposes of the prevention, detec tion,
analysis and investigation of money laundering and the funding of
terrorism. 
(4) Subject persons shall have s ystems in place that enable
them to respond fully and efficiently, through secure means tha t
ensure confidentiality, to enquiries from the Financial Intelli gence
Analysis Unit, relevant supervisory authorities or law enforcem ent
agencies, in accordance with applicable law, as to – 
(a) whether they maintain or have maintained
during the previous five years a business relationship with a
specified natural or legal person; and 
(b) the nature of t hat relationship. 
(5) The retention of personal data shall no longer be deemed
necessary for the purposes of th ese regulations beyond the peri od
established in terms of sub-regulation (2) or any extension the reof as
may become applicable in terms of the second proviso to sub-regulation (2).
(6) The processing of personal data for the purposes of the
Act and these regulations shall be deemed to be a matter of pub lic
interest under Regulation (EU) 20 16/679, and the term "personal  data"
shall have the same meaning as is assigned to it under Regulati on
(EU) 2016/679.
(7) The provisions of this regulation shall be without
prejudice to the right of any ot her authority in terms of appli cable law
to access the documents, data and information described in sub-
regulation (1)(a) and (b).
Statistical data. 
Substituted by:
L.N. 26 of 2020.14. (1)  The Financial Intelligence Analysis Unit shall
maintain comprehensive statistical data relative to its functio ns under
the Act, to assist in the review of the effectiveness of the na tional
system to combat money laundering or the funding of terrorism a nd
the carrying out of nati onal risk assessments.
(2) Comprehensive statistical data maintained under sub-
regulation (1) shall include: 
(a) data measuring the size and importance of the
different sectors which are subject to anti-moneylaundering and counter-funding of terrorismobligations under these regulations, including thenumber of entities and persons conducting arelevant activity or a relevant financial business andthe economic importance of each sector;
PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 33
(b) the kind of activity conducted by the entities and
persons referred to in paragraph (a);
(c) the number of suspicious  transaction reports made
to the Financial Intelligence Analysis Unit, thetypes of underlying criminal activities, where thisinformation is known, and the follow up given tothese reports;
(d) where available, data identifying the number and
percentage of suspicious transaction reportsresulting in further investigation, together with anannual report to subject persons detailing theusefulness and follow-up o f the reports presented;
(e) statistics relevant to the exchange of information
between the Financial Intelligence Analysis Unitand foreign counterparts,  including data regarding
the number of requests for information made,received, refused and answered in full or in part,broken down per foreign counterpart;
(f) data on human resources available to the Financial
Intelligence Analysis Unit to carry out its functionsunder article 16(1)(a), ( b) and (c) of the Act;
(g) the number of on-site and off-site examinations
carried out on subject persons with the aim ofmonitoring their compliance with the provisions ofthe Act and any regulations made thereunder, thenumber of compliance failures or contraventionsidentified following such examinations, and thenumber and values of administrative measures orpenalties imposed.
(3) The Financial Intelligence Analysis Unit shall publish
consolidated reviews of the stat istical data gathered in accord ance
with this regulation on an annual basis and shall ensure that s uch
statistical data is also made available to the National Co-ordi nating
Committee on Combating Money Laundering and Funding ofTerrorism established by the National Co-ordinating Committee o n
Combating Money Laundering and Funding of TerrorismRegulations in terms of article 12A of the Act and the European
Commission on an annual basis and upon request. 
Reporting 
procedures and 
obligations.
Amended by:L.N.77 of 2019;
L.N. 214 of 2020.15. (1) The reporting procedures which a subject
person is required to have and implement in terms of regulation5(5)(a)(i) shall provide for – 
(a) the appointment by the subject person of one of
its officers of sufficient seniority and command as the
34[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
reporting officer, who may be the same officer referred to in
regulation 5(5)(c), and to whom officers and employees of thesubject person are to report any information or other matterwhich may give rise to a knowledge or suspicion that funds,regardless of the amount involved, are the proceeds of criminalactivity or are related to funding of terrorism, or that a pers on
may have been, is or may be connected with money launderingor the funding of terrorism;
(b) the consideration of any such report by the
reporting officer or by another designated employee of thesubject person, in the light of all other relevant information,  for
the purpose of determining whether or not the information orother matter contained in the report does give rise to aknowledge or suspicion that funds, regardless of the amountinvolved, are the proceeds of c riminal activity or are related to
funding of terrorism, or that a p erson may have been, is or may
be connected with money laundering or the funding ofterrorism; 
(c) unrestricted access for the reporting officer or
another designated employee to any relevant information heldby the subject person; 
(d) a procedure whereby the reporting officer or
another designated employee sub mits a report to the Financial
Intelligence Analysis Unit in accordance with sub-regulation(3) whenever he determines that there is knowledge orsuspicion that funds, regardless of the amount involved, are th e
proceeds of criminal activity or are related to funding of
t e r r o r i s m ,  o r  t h a t  a  p e r s o n  m a y  h a v e  b e e n ,  i s  o r  m a y  b e
connected with money laundering or the funding of terrorism;
(e) notifying the Financial Intelligence Analysis
Unit and the relevant supervisory authority, where applicable,of the details of the appointed reporting officer and anysubsequent changes thereto and the appointment of adesignated employee for the purposes of paragraphs (b) to (d);and 
(f) the approval by the reporting officer of any
employee designated by the subject person for the purposes ofparagraphs (b) to (d) who sh all work under his direction.
(2) A supervisory authority shall maintain internal reporting
procedures in accordance with t he provisions of sub-regulation (1). 
(3) Where a subject person knows, suspects or has
reasonable grounds to suspect that funds, regardless of the amo unt
involved, are the proceeds of criminal activity or are related to
PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 35
funding of terrorism, or that a person may have been, is or may  be
connected with money laundering or the funding of terrorism, or  that
an attempt has been made to car ry out a transaction or activity  related
to such proceeds or funding of t errorism , that subject person shall,
promptly disclose that information, supported by the relevantidentification and other document ation, to the Financial Intell igence
Analysis Unit. 
(4) Where a subject person knows or suspects that a
transaction is or may be related to proceeds of criminal activi ty or the
funding of terrorism, the subject person shall not carry out th at
transaction until it has informed the Financial Intelligence An alysis
Unit in accordance with this regulation and, upon informing theFinancial Intelligence Analysis Unit, it shall refrain from exe cuting
that transaction as provided fo r under article 28 of the Act.
(5) Where it is not possible for a subject person to refrain
from carrying out a transaction prior to informing the Financia l
Intelligence Analysis Unit as provided for in sub-regulation (4 ) or
where refraining from carrying out any such transaction is like ly to
frustrate efforts of investigati ng or pursuing the beneficiarie s of the
suspected money laundering or funding of terrorism operations, the
subject person shall accordingly inform the Financial Intellige nce
Analysis Unit immediately after  the transaction is effected. 
(6) Where, following the consideration of an internal report
in accordance with sub-regulation (1)(b), the reporting officer  o r
other designated employee determines that no reporting to theFinancial Intelligence Analysis Unit is required in terms of th is
regulation, the reporting officer shall record the reasons for such
determination in writing and, upon request, shall make it avail able to
the Financial Intelligence Analysis Unit or a supervisory autho rity
acting on behalf of the Financial Intelligence Analysis Unit inmonitoring compliance w ith these regulations. 
(7) Where a supervisory authority discovers facts or obtains
any information that is related to funds which are known or sus pected
to be related to proceeds of criminal activity or the funding o f
terrorism, or to a person who may have been, is or may be conne cted
with money laundering or the funding of terrorism, or to an att empt to
carry out a transaction or activity related to proceeds of crim inal
activity or funding of terrorism, that supervisory authority sh all,
promptly, disclose those facts or that information, supported b y the
relevant documentation that may be available, to the FinancialIntelligence Analysis Unit. 
(8) Where, following a submission of a disclosure as in sub-
regulation (3), or for any other reason as is allowed by law, t he
Financial Intelligence Analysis Unit demands information from t he
disclosing or any other subject person, that subject person sha ll
36[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
comply as soon as is reasonably practicable but not later than five
working days from when t he demand is first made:
Provided that the Financial Intelligence Analysis Unit
m a y ,  w h e r e  i t  d e e m s  s o  n e c e s s a r y , demand that the information b e
submitted within a shorter period of time; 
Provided further that a subject person may make
representations justifying why the requested information cannot  b e
submitted within the said time a nd the Financial Intelligence A nalysis
Unit may, at its discretion and after having considered suchrepresentations, extend such time as is reasonably necessary to  obtain
the information, whereupon the subject person shall submit theinformation requested with in the time as extended.
(9) Subject persons carrying out a relevant activity under
paragraph (a) or paragraph (c) of the definition ''relevant act ivity''
shall not be bound by the provisions of sub-regulations (3), (4 ) and (8)
in relation to information that is received or obtained in the course of
ascertaining the legal position of  their client or performing t heir
responsibility of defending or re presenting that client in, or
concerning, judicial proceedings, including advice on instituti ng or
avoiding proceedings, whether such information is received orobtained before, during or a fter such proceedings. 
(10) Any bona fide  communication or disclosure made by a
supervisory authority or by a subject person or by an employee or
director of such a supervisory authority or subject person inaccordance with these regulations shall not be treated as a bre ach of
the duty of professional secrecy or any other restriction (whet her
imposed by statute or otherwise) upon the disclosure of informa tion
and shall not involve that superv isory authority or subject per son or
t h e  d i r e c t o r s  o r  e m p l o y e e s  o f  s u c h  s u p e r v i s o r y  a u t h o r i t y  o r  s u b ject
person in any liability of any kind, even in circumstances wher e they
were not precisely aware of the underlying criminal activity an d
regardless of whether illegal activity actually occurred. 
(11) The Financial Intelligence Analysis Unit shall, wherever
practicable and as may be allowed by the provisions of the Act,provide subject persons and, wher e applicable, supervisory auth orities
with timely feedback on the effectiveness of suspicious transac tion
reports and of any other informa tion it receives under this reg ulation.
Protection when 
reporting 
suspicions of 
money laundering and funding of 
terrorism.
Added byL.N. 77 of 2019.15A.  (1)  The Financial Intelligence Analysis Unit, any
investigating, prosecuting, judicial or administrative authorit y and
subject persons shall protect and keep confidential the identit y of any
individual who reports, either i nternally within the subject pe rson or
to the Financial Intelligence Analysis Unit, knowledge or suspi cions
of money laundering or funding of terrorism, or who reportsknowledge or suspicions that funds are the proceeds of criminal
PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 37
activity.
(2) No detrimental action shall be taken against any
individual, including employees or officials of subject persons , who
reports, either internally within the subject person or to the Financial
Intelligence Analysis Unit, knowledge or suspicions of moneylaundering or funding of terrorism, or knowledge or suspicions that
funds are the proceeds of criminal activity.
(3) Any individual, including an employee or official of a
subject person, who be lieves that detrimental action has been t aken or
is to be taken against him in reprisal for making a report as e nvisaged
under sub-regulation (2), may file an application to the First Hall, Civil
Court for:
(a) an order requiring the person who has taken the
detrimental action to remedy that action; or
(b) an injunction. 
(4) The court, pending the final determination of an
application under sub-regulation (3) may:
(a) make an interim order; or 
(b) grant an interim injunction. 
(5) If, in determining an application under sub-regulation (3)
the court is satisfied that a person has taken or intends to ta ke
detrimental action against an individual in reprisal for making  a report,
as referred to in sub-regul ation (2), the court may:
(a) order the person who has taken detrimental action
to remedy that action and determine the amount of damages,including, but not limited to, moral damages as the court maydetermine, due to the individual who suffered the detrimentalaction; or 
(b) grant an injunction in any terms it considers
appropriate. 
Cap. 12.(6) Notwithstanding the provisions of the Code of
Organisation and Civil Procedure,  an injunction granted in term s of
sub-regulation (5)(b) shall be for an indefinite period until a n
application for its revocation is made and need not be followed  by an
action on the merits. The provisions of articles 873 and 875 of  t h e
Code of Organisation and Civil Pr ocedure shall apply to warrant s
issued under sub-regulation (5)(b).
Cap. 12.(7) The provisions of articles 829 to 838B of the Code of
Organisation and Civil Procedur e shall not apply to injunctions
38[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
granted in terms of sub-regulation (5)(b). 
Cap. 12.(8) Notwithstanding the provisions of Schedule A of the
Code of Organisation and Civil Procedure, no registry fees shal l be
charged on an application filed in the First Hall of the Civil Court by
any individual referred to in sub-regulation (3) but, if grante d, an award
on costs shall be made against the respondent. 
(9) Any individual, including employees or officials of a
subject person, who ma y have suffered detrimental action as a r esult of
making a report as referred to in sub-regulation (2) shall, wit hout
prejudice to any other right under any other law, have a right to
compensation for any damages sustained.
(10) Notwithstanding the provisions of any other law, the First
Hall, Civil Court shall have exclu sive jurisdiction to hear and
determine an application under sub-regulation (3).
(11) All proceedings instituted unde r this regulation shall be
held in camera and only the parties  to the proceedings and their
respective advocates shall  be allowed in court during the hearings.  All
the judicial acts, documents and evidence shall be kept by the Registrar
of the Court in a confidential ma nner and no access shall be gi ven
thereto except to the parties a nd their respective advocates.
(12) Any decree or judgement of the First Hall, Civil Court
issued pursuant to this regulation shall preserve the  confidentiality of
the proceedings and shall only reveal such facts  as may be necessary to
make the same intelligible and enforceable  by the parties.
 (13)  For the purpose of this regulation, "detrimental action"
means threats, retaliatory or hostile action, including adverse  o r
discriminatory employment actions, and without prejudice to thegenerality of the foregoing shall include: 
(a) any action causing injury , loss, or damage; and, or 
(b) victimisation, intimidation or harassment; and, or
(c) dismissal, suspension or demotion except where
administratively or commercially justifiable for organisationalreasons; and, or 
(d) being adversely affected in respect of one’s
employment, profession or office, including employmentopportunities and work security; and, or 
Cap. 9.(e) prosecution under article 101 of the Criminal Code
relating to calumnious a ccusations; and, or 
(f) civil or criminal proceedings or disciplinary
PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 39
proceedings.
Prohibition of 
disclosure. Amended by:
L.N. 430 of 2018;
L.N. 77 of 2019;L.N. 26 of 2020.16. (1) A subject person, a supervisory authority, any
official or employee of a subjec t person or a supervisory autho rity, or
any person from whom the Financial Intelligence Analysis Unit h as
demanded information pursuant to  these regulations or article 3 0 of
the Act, or any other person who has transmitted information to  the
Financial Intelligence Analysis Unit, who discloses to the pers on
concerned or to a third party, other than as provided for in th is
regulation, the fact that information has been demanded by theFinancial Intelligence Analysis Unit or that information has be en or
may be transmitted to the Financial Intelligence Analysis Unit,  or that
an analysis or an investigation has been, is being, or may be c arried
out, shall be guilty of an offence and liable on conviction to a fine
(multa ) not exceeding one hundred and fifteen thousand euro
(€115,000) or to imprisonment for a term not exceeding two year s or
to both such fine and imprisonment. 
(2) Disclosures made in the following circumstances shall
not constitute an offence un der sub-regulation (1): 
(a) disclosures to the supervisory authority
relevant to that subject person or to law enforcement agenciesin accordance with applicable law;
(b) disclosures between subject persons who
undertake relevant financial business, other than a businessreferred to in paragraphs (l), (m) and (n) under the definition"relevant financial business" or between those subject personsand other persons undertaking equivalent business, whether
situated in a Member State or a third country, which form partof the same group and apply group-wide policies andprocedures as provided for under regulation 6;
(c) disclosures between subject persons who
undertake activities under paragra ph (a) or paragraph (c) of th e
definition "relevant activity" or between those subject personsand other persons undertaking activities equivalent to thoseunder the said paragrap hs in a Member State  or a third country
imposing requirements similar to those laid down in theseregulations, who perform their p rofessional activities, whether
as employees or not, within the same legal person or within alarger structure to which they belong and which share commonownership, management or compliance control; 
(d) disclosures between a subject person who
undertakes relevant financial business , other than a businessreferred to in paragraphs (l), (m) and (n) under the definition"relevant financial business" or the activities under paragraph(a) or paragraph (c) of the def inition  "relevant activity" and
40[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
another person from the same professional category situated in
a Member State or a third country imposing requirementssimilar to those laid down in the se regulations and in cases
related to the same customer and the same transaction,provided such persons are subject to obligations as regardsprofessional secrecy and personal data protection;
(e) disclosures by a subject person in the course of
proceedings instituted against the subject person for, or as aconsequence of, the failure or delay in carrying out atransaction in a competent court, tribunal or other judicialauthority in or outside Malta, including disclosures made in an y
written pleadings or submission s, that the subject person
refrained from carrying out a transaction as required in terms of
article 28 of the Act: 
Provided that disclosures under this paragraph
shall not constitute an offence under sub-regulation (1) onlywhere such disclosures are made after the lapse of the period o f
time referred to in the proviso to article 28(1) of the Act, an d
where applicable, after the lapse of any period of time duringwhich the execution of the transaction is opposed by theFinancial Intelligence Analysis Unit in terms of article 28 ofthe Act; 
(f) disclosures by a subject person to a supervisory
authority or professional body exercising supervision orregulatory oversight over that sub ject person, made in response
to an enquiry or action by that supervisory authority orprofessional body with respect t o the subject person’s failure or
delay in carrying out a transac tion, that the subject person
refrained from carrying out a transaction as required in terms of
article 28 of the Act: 
Provided that disclosures under this paragraph
shall not constitute an offence of sub-regulation (1) only in t he
case where such disclosures are made after the lapse of theperiod of time referred to in the proviso to article 28(1) of t he
Act, and where applicable, after the lapse of any period of tim e
during which the execution of the transaction is opposed by the
Financial Intelligence Analysis Unit in terms of article 28 ofthe Act;
(g) any disclosures by an individual in the course of
proceedings instituted under regulation 15A, including anydisclosures made in any writte n pleadings or submissions.
(3) The fact that a subject person who undertakes activities
under paragraph (a) or paragraph  (c) of the definition "relevan t
activity" is seeking to dissuade a client from engaging in an i llegal
PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 41
activity shall not constitute an of fence under sub-regulation ( 1).
S.L. 586.09.(4) The rights of the data subject referred to in regulation 4
of the Restriction of the Data Protection (Obligations and Righ ts)
Regulations, in particular the right of access, shall be restri cted,
partially or completely, where such a restriction is necessary and
proportionate for a subject pers on to adhere to his obligations  under
sub-regulation (1).
Implementing 
procedures.17. The Financial Intelligence Analysis Unit, with the
concurrence of the relevant s upervisory authority, may issue
procedures and guidance as may be required for the carrying int o
effect of the provisions of these regulations, and which shall be
binding on subject persons.
Power to terminate 
a business 
relationship.18. Where the Financial Intelligence Analysis Unit knows
or has reasonable grounds to suspect that, in connection with abusiness relationship established by a subject person, moneylaundering or funding of terrorism  is taking place, has taken p lace or
has been attempted, or that such business relationship could in crease
the risk of money laundering or funding of terrorism, the Finan cial
Intelligence Analysis Unit may, where the circumstances so warr ant,
require such subject person to terminate that business relation ship
within a stipulated period of time.
Periodical 
reporting.19. In fulfilment of its supervisory functions under the Act,
the Financial Intelligence Analysis Unit may require subject pe rsons
to submit periodical reports on th e measures and procedures the y
maintain and apply pursuant to regulation 5 and any otherinformation or documents as the Financial Intelligence Analysis  Unit
may consider necessary. 
Format of 
information.20. Where a subject person is required to provide
information to the Financial Intelligence Analysis Unit under t he Act,
these regulations and any proce dures or guidance issued thereun der,
the Financial Intelligence Analysis Unit may demand that theinformation is produced electronically and may establish the fo rmat
within which the information is to be provided.
Penalties. 
Amended by:L.N. 77 of 2019;
L.N. 26 of 2020;
L.N. 214 of 2020.21. (1) Any subject person who fails to comply with
any lawful requirement, order or  directive issued by the Financ ial
Intelligence Analysis Unit under these regulations or the Act s hall be
liable to an administrative penalty of not less than one thousa nd euro
(€1,000) and not more than forty-six thousand five hundred euro(€46,500) in respect of every separate failure to comply with s uch
lawful requirement, order or directive.
(2) A subject person who contravenes any provision of
these regulations or of any proc edures or guidance issued in te rms of
regulation 17 shall be liable to an administrative penalty of n ot less
than one thousand euro (€1,000) and not more than forty-six
42[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
thousand five hundred euro (€46,500) in respect of every separa te
contravention.
(3) Administrative penalties und er these regulations shall be
imposed by the Financial Intellig ence Analysis Unit without rec ourse
to a court hearing, either as a one-time fixed penalty or as a daily
cumulative penalty, or both, and shall be imposed in accordance  with
policies and procedures establi shed by the Board of Governors
referred to in the Act which shall ensure the imposition ofadministrative penalties that are effective, proportionate anddissuasive. 
(4) Notwithstanding the provisions of sub-regulations (1)
and (2), the Financial Intelligence Analysis Unit may:
(a) with respect to minor contraventions and where
the circumstances so warrant, imp ose an administrative penalty
below the minimum established by these regulations but notless than two hundred and fifty euro (€250) or issue areprimand in writing instead of  an administrative penalty;
(b) with respect to serious, repeated or systematic
contraventions of these regulations or of any procedures orguidance issued in terms of regulation 17, imposeadministrative sanctions as follows:
(i) in the case of a subject person carrying
out a relevant activity, an administrative penalty of notmore than one million euro (€1,000,000) or, where thebenefit derived from that contravention can bequantified, not more than twice the amount of the benefitso derived; or
( i i ) i n  t h e  c a s e  o f  a  s u b j e c t  p e r s o n  c a r r y i n g
out a relevant financial business, an administrativepenalty of not more than five million euro (€5,000,000)or not more than ten per centum  (10%) of the total annual
turnover according to the latest available approvedannual financial statements:
Provided that, where the subject person is a
parent undertaking or a subsidiary of a parent undertakingwhich is required to prepare consolidated accounts, the relevan t
total annual turnover shall be the total annual turnover result ing
from the latest available consolidated accounts approved by theultimate parent undertaking; and
(c) when it identifies any contravention or compliance
failure as referred to in sub-regulations (1) and (2),instead of or in conjunction with the imposition ofany administrative penalty as envisaged under this
PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM  [S.L. 373.01 43
regulation, require a subject person to take any
action or measure to remedy such contravention orensure compliance with the provisions of the Act,these regulations or any procedures or guidanceissued by the Financial Intelligence Analysis Unitin terms of regulation 17:
Provided that the provisions of this paragraph
shall be without prejudice to the power of the FinancialIntelligence Anlaysis Unit, confe rred to it under article 30D o f
the Act, to issue directives in writing with the aim of ensurin g
compliance by subject persons with their obligations under the
Act and regulations made thereunder, even where nocontraventions or complianc e failures are identified.
(5) Administrative penalties imposed on a daily cumulative
basis shall not be less than tw o hundred and fifty euro (€250) and the
accumulated penalty shall not exceed the maximum set out undersub-regulations (1), (2) and (4)(b) as may be applicable.
(6) Where the Financial Intelligence Analysis Unit imposes
an administrative penalty on a subject person, it shall inform in a
timely manner the relevant supervisory authority or any otherauthority, body or committee responsible for the authorisation,licensing, registration or regulation of, or the granting of a warrant to,
the subject person concerned, a nd shall provide all relevant
information on the contraventi on which it retains necessary.
(7) Where a contravention in terms of sub-regulations (1),
(2) and (4) is committed by a subject person who is a body or o ther
association of persons, be it cor porate or unincorporate, the F inancial
Intelligence Analysis Unit may, in addition to any administrati ve
penalty imposed on the subject pe rson, impose an administrative
penalty of not less than one thousand euro (€1,000) and not mor e than
two hundred and fifty thousand euro (€250,000) on any individua l
who at the time of th e contravention was:
(i) holding the position of a director or holding similar
functions and responsibilities within such body orassociation of persons or purporting to act in anysuch capacity;
(ii) an officer of such body or association of persons
holding a senior executive management function;
(iii) appointed as a reporting officer in terms of
regulation 15(1)(a); or
(iv) appointed to carry out the duties set out under
regulation 5(5)(c),
44[S.L. 373.01PREVENTION OF MONEY LAUNDERING
AND FUNDING OF TERRORISM 
and who through an act or omission, whether intentional or
due to gross negligence, including through the lackof proper oversight of subordinates, caused orcontributed to the commission of any suchcontravention:
Provided that the Financial Intelligence Analysis Unit
may, instead of or in conjunction with the imposition of the sa id
administrative penalty, recommen d to any relevant supervisory
authority or any other authority or body responsible for theauthorisation, licensing, registration or regulation of the sub ject
person concerned, that the individual aforesaid be suspended orprecluded from exercising the fu nctions referred to above withi n that
or any other subject person, a s may be deemed appropriate..
(8) The provisions of this regulation shall be without
prejudice to the powers of a supervisory authority or any otherauthority, body or committee responsible for the authorisation,licensing, registration, regulation, or the granting of a warra nt to a
subject person, to take any acti on or regulatory measure availa ble to it
under applicable law as it may deem appropriate in the circumst ances
of the case.