Malta

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1. Does Malta have a sanctions regime in place?

Sanctions in Malta are principally governed by the National Interest (Enabling Powers) Act (Chapter 365 of the Laws of Malta) (the “Act”), which enables the implementation of treaties and measures and the restriction of trade and travel where the national or international interest of Malta so requires, and to enable effect to be given to certain provisions of the Charter of the United Nations. Furthermore,Regulations of the Council of the European Union imposing sanctions or applying restrictive measures, or which advise, recommend, direct or order member states to take such action as may be advised, recommended, directed or ordered, shall be binding in their entirety in Malta and shall be part of the domestic law. United Nations Security Council Resolutions imposing sanctions are also automatically binding.

The Malta Financial Services Authority (“MFSA”) also obliges its license holders to comply with international sanctions and take all steps necessary for their immediate implementation. License holders are thus required to monitor their business relationships and to verify their records on an on-going basis for any information or transactions known or suspected to be connected or related in any manner whatsoever with designated individuals and entities and to identify and freeze any funds, financial assets and economic resources in accordance with the requirements of the sanctions. In addition, license holders are obliged to report the findings of their verifications to the MFSA and to inform the MFSA of any action taken. In addition, where suspicious activities are identified, it is necessary that a report is filed with the MFSA, setting out the finding as well as any action taken. Such report must be filed with the Sanctions Monitoring Board at the Ministry of Foreign Affairs and must include information about any funds, financial assets and economic resources which have been identified to be owned or controlled, directly or indirectly, by the designated individuals and entities and which they have frozen in terms of sanctions.

2. Does Malta implement UN sanctions?

Yes. In Malta, the United Nations Security Council Resolutions imposing sanctions or applying restrictive measures, or which advise, recommend, direct or order member states to take such action as may be advised, recommended, directed or ordered, are automatically binding in their entirety in Malta.

Furthermore, whenever the Security Council calls upon member states to apply any measures to give effect to any decision of the said Security Council, or whenever an entity or competent authority appointed or set up by or under the Charter of the United Nations advices, recommends, directs or orders member states to take such action as may be recommended, directed or ordered by that entity or competent authority, the Minister responsible for foreign affairs may, subject to the provisions of the Act, make regulations as appear to him necessary or expedient for the implementation of such measures or action.

3. Does Malta implement an autonomous sanctions regime?

Yes; whenever the Minister responsible for foreign affairs considers that the national or international interests so require, he may by regulations under the Act, order the prohibition of trade with other countries – either in general or with any country or countries or part thereof – or the prohibition of travel to or from any other country.

The Sanctions Monitoring Board within the Ministry of Foreign Affairs, established by Legal Notice 562 of 2010 under the said Act, has the overall function of monitoring the implementation and operation of sanctions legislation in Malta. The Act provides that the Minister may also – upon the recommendation of the Sanctions Monitoring Board and of the Attorney General – order:

  1. the designation of any person or entity
  2. that any natural or legal person in Malta immediately freeze, without prior notice, all property of a designated person or entity or of any other persons or entities as may be indicated in that order
  3. that any natural or legal person in Malta immediately freeze, without prior notice, all property that is owned or controlled by a designated person or entity
  4. that no Maltese citizen or any person or entity located in Malta shall make available any property or financial services or other related services, to or for the benefit of a designated person or entity
  5. the investigation of any matter relating to the designation of any person or entity, the confiscation of property of any designated person or entity and the applicability, mutatis mutandis, or otherwise of any provisions of any other law in respect of the property of a designated person or entity, or of a person or entity who is subject to an investigation which may lead to the designation of that person or entity
  6. the amendment or revocation of any of the above orders

Any person that freezes funds, assets or economic resources in accordance with the requirements of any sanctions is required to notify the Sanctions Monitoring Board in writing. MFSA license holders are also required to notify the MFSA of any action taken and any freezing made. The Sanctions Monitoring Board is also empowered to give rulings on whether any action or transaction is prohibited by sanctions legislation.

4. What is the nature of the sanctions regime in Malta?

EU Regulations and UN Security Council Resolutions have direct effect in Malta, however implementation regulations for their enforcement and the imposition of penalties are also adopted at national level. US sanctions are not legally binding in Malta but the MFSA encourages companies and the public in general to take US sanctions into consideration when conducting business activities.

5. Does Malta maintain a list of sanctioned individuals and entities?

The MFSA website contains links to the sanctioned individuals and entities that have been listed by the EU, UN and the US. The latest sanctions issued may be found at: https://www.mfsa.mt/firms/international-affairs/international-sanctions/sanctions/2020-sanctions/.

6. Are there any other lists related to sanctions?

All sanctions issued by the European Union and the United Nations Security Council are directly applicable under the National Interest (Enabling Powers) Act, Cap 365 under the Laws of Malta. The lists pertaining to sanctioned individuals and entities under these sanctions regimes are therefore relevant. The full list of countries can be accessed here: https://www.mfsa.com.mt/pages/viewcontent.aspx?id=459 The latest updates in this respect may be found here:

https://foreignandeu.gov.mt/en/Government/SMB/Pages/Latest-EU-UN-Sanctions.aspx

7. Does Malta have a licensing or authorization system in place?

The national competent authority in Malta for sanctions implementation is the Sanctions Monitoring Board. The Board is inter alia empowered to authorize access to frozen funds or other assets which the Board determines to be necessary.

8. What are the consequences for a breach of sanctions in Malta?

Any person who acts in violation of regulations made under National Interest (Enabling Powers) Act or of a Regulation of the Council of the European Union or of a United Nations Security Council Resolution shall be guilty of an offense and shall, on conviction, be liable to imprisonment for a term from twelve months to twelve years or to a fine of not less than twenty-five thousand euro (€25,000) and not exceeding five million euro (€5,000,000), or to both such imprisonment and fine. Suspension or cancellations of any relevant license, closure of business and compulsory winding up of a company may also be ordered upon conviction. In respect of administrative breaches, such as failure to have in place, and effectively implement, internal controls and procedures to ensure compliance with the Act, as of 23 April 2020 the Sanctions Monitoring Board is empowered to impose such administrative penalties, ranging from a penalty of €100 – €300 for every separate contravention for a first-time breach, and €300 – €800 for serious, repeated and systematic contraventions. Daily cumulative penalties range from €50 up to a total of €1,000. In addition, the Board may issue directives requiring any person to take action to remedy the contravention.

9. Who are the relevant regulators in Malta and what are their contact details?

The Sanctions Monitoring Board within the Ministry of Foreign Affairs monitors the implementation and operation of sanctions legislation. Ministry for Foreign Affairs Palazzo Parisio Triq il-Merkanti Valletta Malta E: foreignaffairs@gov.mt

Contributor law firm

Maria Margo Zammit Fiorentino LL.M (Melit.), LL.D.,

Associate

Guido de Marco & Associates - Advocates

Wisely House 206, Old Bakery Street Valletta

VLT1451 http://www.demarcoadvocates.com

T: (+356) 21255265/6 mzfiorentino@demarcoadvocates.com

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