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Anti-money Laundering Law

Use of Cash (Restriction) Regulations

By August 13, 2021September 7th, 2023No Comments

On the 9th of March 2021 the Use of Cash (Restriction) Regulations (Subsidiary Legislation 373.04) came into force. These Regulations render the transfer in cash of €10,000 or more unlawful as from the date that the Regulations came into force. For the purposes of these Regulations the term cash means physical notes and coins and therefore excludes payments made by cheque, card, bank transfer or other electronic means of transfer.

It is both the payer of the cash and the person receiving the cash who will incur fines if these Regulations are breached. These Regulations are limited to the purchase or sale of antiques, immovable property,  jewellery, precious metals, precious stones and pearls, motor-vehicles, sea-craft, and works of art, whether done through a commercial transaction or a personal one.

It is unlawful for the same person to stagger payments in cash which within a period of six months cumulatively amount to €10,000 or more for the same purpose, as this would constitute a linked transaction. Payment in a different currency equivalent to that prohibited by these Regulations is also prohibited. The minimum fine applicable is 40% of the sum transacted.

The Financial Intelligence Analysis Unit is tasked with regulating the provisions of this law by virtue of which the FIAU is empowered to monitor compliance with these Regulations as well as to conduct inspections on notaries and traders. As a result of these Regulations notaries before whom a sale of an immovable property amounts to €10,000 or more will have to obtain information as to the method of payment used and record such information.  Failure by traders and notaries to abide by the procedures and requirements issued by the FIAU will result in an administrative penalty of not more than €5,000.

In addition to the fine, the FIAU may recommend to any relevant authority to take any further action within its powers and remit. The Regulations also allow for the possibility of settling the matter administratively through the payment of an administrative penalty as an alternative to criminal proceedings.

While payment in cash in the amounts mentioned is unlawful, the contractual obligations at the basis of the transaction shall remain legally valid.  

written by Paul Radmilli, Legal Trainee

For more information you can contact one of our Team Members at Mifsud & Mifsud Advocates.