Council Regulation (EU) 2023/1462 of 17 July 2023 amending Regulation (EU) No 36/2012 concerning restrictive measures in view of the situation in Syria

On 17 July 2023 the Council of the European Union extended the restrictive measures against Syria until 24 February 2024.

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1. FATF publishes a targeted update on the implementation of the FATF Standards on VAs and VASPs

The FIAU would like to inform subject persons that the FATF has recently provided a specific update regarding the implementation of the FATF standards concerning virtual assets and virtual asset service providers (VAs and VASPs). This report offers an overview of the current status of countries' adherence to FATF's Recommendation 15 and its Interpretative Note, which includes the Travel Rule. Additionally, it provides insights into emerging risks and market developments, including Decentralized Finance (DeFi), Peer-to-Peer transactions (P2P), Non-Fungible Tokens (NFTs), unhosted wallets, and stablecoins.

According to this report, it has been observed that jurisdictions are still encountering difficulties in fulfilling essential obligations such as conducting risk assessments, establishing legislative frameworks for regulating VASPs, and conducting supervisory inspections. Furthermore, inadequate progress has been made by jurisdictions in implementing the Travel Rule, a crucial measure for anti-money laundering and combating the financing of terrorism. This situation raises significant concerns due to the escalating risks associated with VAs and VASPs, whereas the absence of proper regulation creates significant vulnerabilities that can be exploited by criminals.

This Report can be accessed directly through the FATF website, or through the FIAU website by accessing the following link.

 

2. Public Consultation on the Revision of Recommendation 8 and its Interpretive Note

The FATF is reviewing suggestions for modifying the wording of Recommendation 8 of the FATF Standards and its Interpretive Note (R.8/INR.8). This amendment is focused on safeguarding Non-Profit Organizations (NPOs) from being exploited for terrorist financing purposes. The proposed changes aim to tackle the issue of excessive implementation of preventive measures within the NPO sector in certain countries, recognising the adverse effects that such measures can have on the legitimate activities of NPOs.

More information on the consultation process, including a copy of the document itself, and how feedback may be submitted, can be accessed from the FATF’s website.

The deadline for submission of comments or feedback is 18 August 2023.

 

3. EU Commission Delegated Act on High Risk Third Countries

The Financial Intelligence Analysis Unit (FIAU) would like to bring to your attention the latest Delegated Act of the European Union’s (EU) Commission on High Risk Third Countries, which was adopted by virtue of Delegated Regulation (EU) 2023/1219 of 17 May 2023, and published in the EU’s Official Journal of 26 June 2023. A copy of this document has been uploaded on the FIAU’s website under ‘Country Statements’.

In terms of Article 9(4) of Directive (EU) 2015/849, the European Commission is to identify third countries which present strategic deficiencies in their AML/CFT regimes, and which pose a significant threat to the EU’s financial system (“high risk third countries”). The resulting list, which is reviewed and updated from time to time, is then made public through delegated acts. The list of countries in the Annex to Delegated Regulation (EU) 2016/1675 has now been revised to include Nigeria and South Africa, while Cambodia and Morocco have been excluded from such list.

A high risk third country is considered as a non-reputable jurisdiction in line with the definition provided under Regulation 2(1) of the Prevention of Money Laundering and Funding of Terrorism Regulations (PMLFTR). It is important that in ensuring compliance with their obligations under Regulation 11(10) and Regulation 11(11) of the PMLFTR, as well as with Section 8.1.1 and Section 8.1.3 of the FIAU Implementing Procedures – Part I as they may be applicable, subject persons should also take note of the EU’s consolidated list of high risk third countries.

While the resulting list of high risk third countries presents similarities with the FATF’s own lists, it is important that subject persons are aware that the two are not identical and a country may be present on one list but not on the other.

Any queries in relation to the above should be addressed to queries@fiaumalta.org

The FIAU would like to notify subject persons that the Sanctions Monitoring Board (SMB) has issued a notice on amendments that have been made to the EU and/or UN Sanctions Regime with regards to Iran. More information on the same can be obtained by accessing this link.

Subject persons are also reminded that an overview of recent updates to the sanctions regimes can be viewed on the SMB’s website.

For any queries relating to this notice and to sanctions in general, subject persons are to seek direction from the SMB via email on the following email address: sanctions.smb@gov.mt

The Financial Intelligence Analysis Unit (FIAU) would like to bring to your attention that Europol has just published the European Union Terrorism Situation and Trend Report (TE-SAT) 2023.  

Europol has been entrusted with the task of supporting Member State authorities in countering terrorism and extremism, thereby ensuring public security in the EU. A cornerstone of their efforts is the Terrorism Situation and Trend Report which is published annually by Europol. This Report serves as a comprehensive situational overview, presenting statistical data and developments within the EU's terrorism landscape.

In its latest edition, the Terrorism Situation and Trend Report delves into the reality of terrorism in Europe throughout 2022. This comprehensive Report provides a detailed examination of various forms of terrorism, including violent extremism, jihadist terrorism, right-wing terrorism, left-wing and anarchist terrorism, as well as ethno-nationalist and separatist terrorism, among others.

By synthesizing the findings of EU Member States, the Report offers a unique and valuable insight into emerging trends and extremist ideologies that have the potential to influence terrorist activities.

The primary aim is to enhance the understanding and awareness of the multifaceted nature of terrorism, enabling stakeholders to develop effective strategies to address these complex challenges. 

The European Union Terrorism Situation and Trend report 2023 (TE-SAT) can be accessed through the Europol website or through the FIAU’s website under Publications - FIAU Malta

The FIAU would like to bring to your attention the latest FATF 'High-Risk Jurisdictions subject to a Call for Action' and 'Jurisdictions under Increased Monitoring' documents issued by the FATF on the 23 of June 2023. A copy of these documents has been uploaded on the FIAU’s website under ‘Country Statements’. 

The FATF classifies the jurisdictions included in these documents into different categories, in accordance with the deficiencies present in such jurisdictions, and the level of commitment and progress made in addressing such deficiencies. 

The categories are the following: 

1. Jurisdictions with strategic deficiencies in their regime to counter money laundering, terrorist financing, and financing of proliferation that have failed to meaningfully address their AML/CFT deficiencies and are subject to a call for counter-measures (listed under 'High-Risk Jurisdictions subject to a Call for Action’). This process is informally referred to as ‘’black listing’’;
    
2. Jurisdictions that have developed an action plan with the FATF and have made a high-level political commitment to address their AML/CFT deficiencies (listed in the 'Jurisdictions under Increased Monitoring'). This process is informally referred to as “grey listing”. This document also lists jurisdictions that are no longer subject to the FATF on-going global AML/CFT compliance process, where applicable. 

Subject persons are required to implement the measures set out under Regulation 11 of the Prevention of Money Laundering and Funding of Terrorism Regulation S.L. 373.01 (“PMLFTR”) and under Chapter 8 of the FIAU Implementing Procedures Part I, which is legally binding upon all subject persons in terms of Regulation 17 of the PMLFTR.

 

High-Risk Jurisdictions subject to a Call for Action

Since February 2020, in light of the COVID-19 pandemic, the FATF has paused the review process for Iran and DPRK, given that they are already subject to the FATF’s call for countermeasures. Therefore, reference should be made to the statement adopted on 21 February 2020 on these jurisdictions. While the statement may not necessarily reflect the most recent status of Iran and the Democratic People’s Republic of Korea’s AML/CFT regimes, the FATF’s call to apply countermeasures on these high-risk jurisdictions remains in effect. In October 2022, the FATF added Myanamar to the list of jurisdictions subject to a call for action and it should be noted that the statement issued is still applicable. Subject persons should refer to Regulation 11(11) of the PMLFTR and apply the enhanced due diligence measures therein to the above-mentioned jurisdictions.

 

Jurisdictions under Increased Monitoring 

The following countries had their progress reviewed by the FATF since February 2023: Albania, Barbados, Burkina Faso, Cayman Islands, Democratic Republic of Congo, Gibraltar, Jamaica, Jordan, Mali, Mozambique, Panama, Philippines, Senegal, South Africa, South Sudan, Türkiye, UAE, and Uganda. Haiti, Nigeria, Syria, Tanzania and Yemen chose to defer reporting; thus, the statements previously issued for those jurisdictions in February 2023 are applicable, but they may not necessarily reflect the most recent status of the jurisdictions’ AML/CFT regimes. Following review, the FATF now also identifies Cameroon, Croatia and Vietnam.

With regards to the enhanced due diligence measures to be applied to the above-mentioned jurisdictions, subject persons should refer to Regulation 11(10) of the PMLFTR. 

 

If any further information is required, you may contact the FIAU on queries@fiaumalta.org

List of economically critical goods for which businesses and third countries should be especially vigilant. The List is comprised of mainly industrial goods subject to EU’s restrictive measures for which anomalous trade flows via certain third countries to Russia have been detected.

The European Commission has rolled out a whistle-blower tool to facilitate the reporting of possible sanctions violations. This is a secure online platform, which whistle-blowers from around the world can use to anonymously report past, current, or planned EU sanctions violations.

Although EU sanctions are adopted by the Council of the EU, Member States remain responsible for their enforcement, including through the application of penalties in case of sanctions violations. The European Commission monitors the implementation and enforcement of EU sanctions across Member States.

Sharing first-hand information may be helpful in uncovering cases of sanctions violations, including evasion and circumvention. By voluntarily providing the European Commission with information about EU sanctions violations of which you might be aware, you could be helping the Commission investigate such practices and ensure sanctions compliance in the EU.

To access the tool, learn how your anonymity is protected, and report a sanctions violation, please copy paste or manually re-type the following URL for security reasons: https://EUsanctions.integrityline.com in your browser.

Links for additional information hereunder:

https://ec.europa.eu/info/sanctions_en#whistleblower

https://ec.europa.eu/commission/presscorner/detail/en/mex_22_1541

Addressing the circumvention of EU export restrictions against Russia: List of High Priority Battlefield Items. The list has been agreed by the Commission services in coordination with partners and is available through the hyperlink above.

Council Implementing Regulation (EU) 2023/… of 26 June 2023 implementing Regulation (EU) No 359/2011 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Iran

On 26 June 2023 and in line with the Union’s commitment to address all issues of concern with Iran, including the human rights situation, as confirmed in the Council conclusions of 12 December 2022, seven persons should be included in the list of natural and legal persons, entities and bodies subject to restrictive measures set out in Annex I to Regulation (EU) No 359/2011.

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The regulations and directives concerned are the following:

• Council Regulation (EU) No 269/2014 of 17 March 2014
• Council Regulation (EU) No 833/2014 of 31 July 2014
• Council Decision 2014/145/CFSP of 17 March 2014

It is hereby recommended that all persons in Malta remain informed of any updates made to applicable sanctions. To subscribe to the mailing list of the Sanctions Monitoring Board one may send an email to sanctions.smb@gov.mt

All persons in Malta may wish to consult the consolidated version of Frequently Asked Questions on the implementation of Council Regulation No 833/2014 and Council Regulation No 269/2014 published by the European Commission accordingly.