Commission warns Malta: bring anti-money laundering rules up to date

The European Commission has sent a reasoned opinion to Malta over its previous failure to implement the 4th Anti-Money Laundering Directive into national law.

The Prevention of Money Laundering Act transposed all the provisions of this Directive at the end of 2017, with ancillary legal notices published in January 2018.

While the EC said that Spain, also issued with a reasoned opinion, had so far only partially transposed the rules, the Commission found the transposition in Latvia and Malta incomplete.

The Maltese finance ministry said it had taken note of the additional reasoned opinion from the EC and said it welcomed the suggestions to improve further the text used in the transposition of the Directive in national legislation.

“In the spirit of collaboration, Maltese legal officials will engage in technical discussions with the Commission’s legal team to explain the reasons and justification of our legislation and make any corrections which might be required.

“The government of Malta remains committed to continue strengthening the work it has already undertaken concerning the strengthening of  institutions, combating money laundering, and fighting international tax avoidance,” finance minister Edward Scicluna said.

The anti-money laundering rules are crucial in the fight against money laundering and terrorism financing. The Panama Papers and other scandals revealed the need for stricter anti-money laundering rules, and gaps in one member state have an impact on all others.

“This is why the effective fight against money laundering is one of the central points of the EU's approach to combating crime in Europe,” the European Commission said in a statement.

All Member States had to implement the rules of the 4th Anti-Money Laundering Directive by 26 June 2017.

There are also infringement procedures ongoing against 20 member states: three at the stage of court referrals, nine at the stage of reasoned opinions, and eight at the stage of letters of formal notice. A majority of member states have adopted the relevant laws.

The Commission is now checking whether these laws completely implement the provisions of AMLD4.

In the meantime, the 5th Anti-Money laundering directive has been agreed and entered into force on 9 July 2018. Member States will have to implement these new rules into their national legislation by 10 January 2020.

If Malta, Latvia and Spain fail to bring their national legislation into line with EU law within the next two months, the Commission may decide to refer the cases to the Court of Justice of the EU.