Legal Notice 26 of 2020 ‘Prevention of Money Laundering and Funding of Terrorism (Amendment) Regulations 2020’ was published in the Government Gazette on the 20th February 2020. One of the primary scopes of the amendment regulations is to bring into effect the provisions of the 5th Anti-Money Laundering Directive. Some of the major changes include the amendment of the definitions of electronic money, occasional transaction, and relevant activity. The amendment regulations also tackle Customer Due Diligence (CDD) measures, prepaid cards, and high-risk jurisdictions. Some of the major changes are outlined below.
Electronic money is defined as “electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transactions and that is accepted by a person other than the financial institutions that issued the electronic money.” The amended regulations exclude monetary value that is stored on instruments which can only be used in the premises used by the issuer or under a commercial agreement with the issuer which limits its use. The definition also excludes electronic monetary value which is used to make payment transactions executed by means of telecommunication, digital or IT device, where the products purchased are used through telecommunication, digital or IT device provided they do not only serve as an intermediary between the user and supplier.
The amendment regulations also amend the definition of occasional transaction, which now also includes transactions in works of art amounting to €10,000 or more, the provision of advice on tax matters, the provision of intermediation services by real estate agents for letting of immovable property where the monthly rent is €10,000 or more and the storage of works of art by free ports valued at €10,000 or more. The provision of such services has also been included within the scope of relevant activity,
CDD measures consisting in the verification of the identity of the customer on the basis of data obtained from reliable sources has been extended to include electronic identification means issued under electronic identification schemes or relevant trust services or other electronic identification processes approved by the Financial Intelligence Analysis Unit (FIAU). The legal notice introduces a new proviso to the effect that where the customer is a body corporate, a body of persons or another legal entity or trust subject to registration of beneficial ownership information, subject persons must obtain proof that the beneficial ownership information was registered in the beneficial ownership register.
A notable amendment involves the criteria for exemption from carrying out CDD by persons issuing electronic money. The maximum monthly payment transaction limit for reloadable payment instruments has been lowered from €250 to €150. The maximum amount stored electronically has also been lowered from €250 to €150. Furthermore, exemption from CDD measures for redemption in cash or cash withdrawals of electronic money has been lowered from €100 to €50. The maximum limit of €50 was also introduced for remote payment transactions. Payments carried out with anonymous prepaid instruments issued in other Member States and third countries may only be accepted subject to the same criteria.
The amendment regulations also impose additional requirements for enhanced CDD in transactions involving non-reputable jurisdictions. Some of the new requirements include obtaining additional information on the identity of the customer and beneficial owners, source of wealth, source of funds, the purpose of transactions, and conducting enhanced monitoring of business relationships. Occasional transactions or business relationships or transactions involving non-reputable jurisdictions must be flagged and additional due diligence measures must be applied, with the FIAU being informed in writing, among other measures.
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