Having Systems in Place:
All subject persons, as per Article 17 (6) (a) (b) and (c) of the National Interest (Enabling Powers) Act, Cap 356 of the Laws of Malta are obliged to ensure strict observance to all applicable EU, UN and National sanctions at all times. Essentially, all legal and natural persons who conduct relevant activity or relevant financial business must (i) regularly check lists of designations by the UN, EU and those issued by the SMB. Screening of clients against these lists periodically and immediately after any changes is also required; (ii) have in place and effectively implement internal controls and procedures in order to ensure compliance with pertinent sanctions and (iii) immediately notify the Board in the case of identification of targeted property or assets and the consequent action taken.
For any violations of Article 17 (6) (a) (b) and (c) of the National Interest (Enabling Powers) Act, the SMB is authorized to mete out administrative penalties when such contravention is not accompanied by any other breach of the Act.
Tipping off:
Subject persons are prohibited from informing a customer or any third party of a potential sanctions breach as this would constitute tipping off in terms of Article 17 (7) of the National Interest (Enabling Powers) Act. Disclosure of information would constitute tipping off even if the investigation by the Sanctions Monitoring Board is not actually prejudiced. It is therefore important that all employees who are client-facing, know of the obligation not to tip off.
In case of doubt as to whether a hit constitutes a false positive or not, the subject person must refrain from communicating this to the client before obtaining the approval of the Board in writing.
Freezing of Property:
| I. | Any natural or legal person in Malta must 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 an order issued by the Minister for Foreign and European Affairs toward safeguarding the National Interest. |
| II. | Any natural or legal person in Malta must immediately freeze, without prior notice, all property that is owned or controlled. Whether wholly or jointly, directly or indirectly, by a designated person or entity; or property that is derived or generated from other funds or assets that are owned or controlled, directly or indirectly, by a designated person or entity; and property of any person or entity acting on behalf of or at the direction of a designated person or entity. |
| III. | No Maltese citizen or any individual or entity located in Malta shall make available any property or financial services or other related services, directly or indirectly, wholly or jointly, to or for the benefit of a designated person or entity; or a person or entity acting on behalf of a designated person or entity, unless licensed, authorized or notified for such purpose. |
Reporting to the Board:
The Sanctions Monitoring Board is to be informed immediately in the case of a hit and the resultant measures taken by the subject person and/or reporting entity. Reporting to the Board must also be done in cases of attempted transactions. Failure to do so constitutes an offence.
Should any situation be encountered which is in violation of sanctions, whether directly or indirectly, there is an obligation to stop any transaction from going through, freeze any assets and inform the SMB. Supporting documentation is to also be provided. Communication with the SMB should be made effected without delay and via email or in writing on the contact details provided on the Contact Us page.
