Third Anti-Money Laundering Directive

7th August, 2008 - Today Malta has transposed the provisions of the Third Anti-Money Laundering Directive through the adoption of new Prevention of Money Laundering and Funding of Terrorism Regulations, 2008 which replace the previously applicable regulations.

The objective of these regulations is to implement the provisions of Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purposes of money laundering and terrorist financing. It also includes Directive 2006/70/EC of the European Commission of 1 August 2006 laying down implementing measures for Directive 2005/60/EC as regards the definition of Politically Exposed Persons (PEPs) and as regards the technical criteria for simplified customer due diligence and for the exemption on grounds of a financial activity being conducted on an occasional or very limited basis.

The Third Anti-Money Laundering Directive adopted in 2005 builds on existing EU legislation and incorporates into EU law the June 2003 revision of the 40 recommendations of the Financial Action Task Force (FATF), the international standard-setter in the fight against money laundering and terrorist financing.

The directive is applicable to the financial services sector as well as lawyers, notaries, accountants, real estate agents, casinos, trusts and corporate 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, and to monitor their business relationship with the customer;
report suspicions of money laundering or terrorist financing to the public authorities - usually, the national financial intelligence unit; and
take supporting measures, such as ensuring proper training of personnel and the establishment of appropriate internal preventive policies and procedures.
The directive also introduces additional requirements and safeguards for situations of higher risk (e.g. trading with correspondent banks situated outside the EU).