INSIGHT: What companies must know about the new Malta Settlement and Enforcement Guide

THE publication of a new Settlement Policy and Enforcement Guide, as well as the publication of the governing principles for the Financial Intelligence Analysis Unit’s (FIAU’s) Compliance Monitoring Committee (CMC), provide unprecedented transparency and clarity regarding the approach to the monitoring and enforcement of AML/CFT measures in Malta.

These initiatives are part of broader efforts to ensure the robust process is readily understood by all those involved and supported by setting out clear expectations.

This should ultimately be to the benefit of all parties and support the FIAU’s drive towards compliance going forward, as well as promoting accountability and building public trust.

Settlement agreements provide a collaborative means for the FIAU and subject persons to address identified AML/CFT breaches, focusing on remedial efforts that strengthen controls and benefit both subject persons and the wider jurisdiction.

These agreements help minimise disruption to daily operations by streamlining the enforcement process and are generally less costly than appeals, avoiding the extended legal and administrative expenses of litigation.

Malta Settlement policy

The new Settlement Policy, introduced in April 2026, establishes a clear and consistent framework for resolving cases efficiently and fairly, reducing disputes and resource strain. It sets out mutually agreed actions to restore compliance swiftly, encouraging the timely correction of deficiencies while supporting prudent resource use, all within the bounds of the legal framework.

More specifically, the Settlement Policy sets out the criteria for considering whether an agreement is in the public interest or not, as well as limits, including a maximum of two settlement agreements within a two-year period. It specifies that such agreements provide for a decrease of the administrative penalty to be imposed on the subject person of between ten per cent (10%) and fifty per cent (50%).

It also details how the CMC assesses the percentage decrease to be imposed, taking into consideration factors such as the stage at which the subject person registered an admission of the breach(es) and the stage at which the subject person committed to and/or implemented remediation.

For example, in the case of a breach identified following a compliance examination, an admission before the Potential Breaches Letter is issued corresponds to a reduction of 25% in the penalty, compared with 10% for admission at the settlement stage.

By setting this all out in clear terms, the intention is to encourage more obliged entities to cooperate with the FIAU at an early stage, facilitating more constructive and efficient results of enforcement matters. 

Malta Enforcement Guide

Meanwhile, the Enforcement Guide, which will be applicable as of 1^st July 2026, details the authority’s enforcement process, clearly setting out what types of enforcement action can be taken by the FIAU, when these will be taken, and the considerations that inform decisions to pursue enforcement.

Certain aspects will be familiar to those already active in Malta, however others are completely new. For example, potential breaches letters will now be numbered, and subject persons are required to link their representations to these numbered paragraphs.

The subject person will also receive an enforcement notice letter highlighting the initiation of the enforcement process, details of the CMC members, as well as expected timeframes for the closure of the enforcement process. In addition, clear timeframes highlighting the enforcement and follow up process are detailed.

The Enforcement Guide also explains the sanctions policy and sanctions tool and provides details of the considerations taken by the CMC to arrive at the administrative measures to impose.

It establishes a structured, step-by-step approach to the enforcement process, providing subject persons with clear guidance on what to expect before and after the Committee arrives to a decision. 

Governing principles

At the same time, the published CMC governing principles provide details on the composition of the committee that decides on administrative penalties and other measures, as well as information on voting rights, minutes, and conflicts of interest.

In making this information readily available and accessible, the intention is to build trust in the committee, thereby creating a more conducive environment for the rapid and effective remediation of AML/CFT breaches, while protecting Malta’s integrity and reputation, safeguarding both its financial sector and the wider economy.

These latest initiatives mark an important step forward for the FIAU in delivering on its foremost priority of safeguarding the integrity of the jurisdiction.

They underscore the FIAU’s commitment to ensuring that enforcement, where required, is undertaken as transparently and efficiently as possible.

This reinforces Malta’s reputation as a robust jurisdiction that is responsive to feedback and the needs of subject persons, while ensuring that measures are proportionate, effective, and dissuasive.