Malta given final warning over anti-money laundering law

Malta has been given two months to transpose an EU directive against money laundering into its law books or face court proceedings before the European Court of Justice (ECJ).

The College of EU Commissioners yesterday decided to send a reasoned opinion, the second stage of EU legal procedures, to 15 member states, including Malta, for failing to transpose the Third Anti-Money Laundering Directive by the stipulated deadline, established as December 15, 2007. Adopted formally in 2005, the directive builds on existing EU legislation and incorporates into EU law the June 2003 revision of recommendations of the Financial Action Task Force (FATF), the international standard-setter in the fight against money laundering and terrorist financing.

The new directive is applicable to the financial sector as well as lawyers, notaries, accountants, real estate agents, casinos, trusts and company service providers. Its scope also encompasses all providers of goods, when payments are made in cash in excess of €15.000.

Those subject to the directive need to identify and verify the identity of their customer and of its beneficial owner, monitor their business relationship with the customer and report suspicions of money laundering or terrorist financing to the public authorities - usually the national financial intelligence unit.

The directive also imposes the obligation of service providers in the financial services sector to take supporting measures, such as ensuring proper training of personnel and the establishment of appropriate internal preventive policies and procedures.

The Commission said that the directive introduces additional requirements and safeguards for situations of higher risk including trading with correspondent banks situated outside the EU.