The Malta Financial Services Authority (“MFSA”) has reacted to recent developments in Ukraine with two public notices issued on 22 February and 1 March 2022.
The public notices remind all licence holders of their obligation to have effective systems and controls in place to ensure effective sanction screening of any person or entity named in any applicable sanctions list.
In this respect, the MFSA provided the following guiding principles:
(1) Licence holders must ensure that their sanction screening systems are operating correctly and are properly calibrated.
(2) Client databases, and payment screening systems (where applicable), are subject to the latest applicable sanctions lists and that licence holders implement an element of flexibility when reacting to changes in such lists.
(3) Licence holders are to keep abreast with the latest additions to any applicable sanctions lists in view of the constantly developing situation in Ukraine.
Furthermore, licence holders are also reminded of their obligation to identify sanctioned persons and entities within, inter alia, financial institutions, trusts and funds as well as to properly identify and sanction screen all beneficial owners and related third parties as stipulated by the Maltese Prevention of Money Laundering and Financing of Terrorism Regulation (S.L. 373.01) and the National Interest Act (Cap. 365 of the laws of Malta).
Seeing as the situation in Ukraine could have adverse effects on the global financial system, the MFSA is also requesting that licence holders keep them informed of any impacts to their business, relating to, inter alia, operational capacity, cyber-security and service providers.
In this respect, the MFSA has requested that, by close of business on 4 March 2020, licence holders:
(1) review and assess their capabilities in complying with sanction monitoring requirements, and to provide an attestation to that effect; and
(2) inform the MFSA whether they have taken the necessary provisions or incurred any losses as a result of the current crisis.
If there is any doubt regarding a relationship or transaction with a direct or indirect link to any person or entity named within any applicable sanction list, licence holders are encouraged to contact the Sanctions Monitoring Board.
