Malta’s Central Bank Prohibits Cheques Of Under €20 To Fight Money Laundering
Maltese people will no longer be able to issue cheques for amounts below €20 as part of a new directive issued by the Central Bank of Malta.
This directive, which comes into force in 2022, comes as the Central Bank aims to ensure that payments are conducted in line with international anti-money laundering expectations.
Overall, it covers numerous aspects of cheques and bank drafts. In particular, other main changes include that cheques will only be able to be cashed or credited to the person that is named by the payer.
Additionally, cheques are unable to be dated to a future date and may be accepted in any case if presented before the future date. Cheques over €5,000 also can only be deposited into the beneficiary’s own account.
The new rules, which have been seen as a positive development by Malta’s Bankers’ Association, also highlights that cheque facilities will be withdrawn if cheques are repeatedly issued and cannot be honoured.
This latest move follows a growing trend away from utilizing cheques in exchange for opting to the use of credit transfers, direct debits and other electronic payments instead.
Users who breach these regulations are subject to fines up to €200 for each offence and service providers will be required to retain cheque information for at least five years.
In Malta’s banking circles, this is being highlighted as a way to ensure a shift towards more efficient, mostly electronic, modes of payment. It will also definitely permanently change Malta’s payment landscapes while fighting money laundering.
However, questions have been raised when it comes to the prohibition of issuing cheques below the amount of €20. This is due to concerns that it may harm vulnerable people who would normally use cheques in such a way.
The Central Bank and Bankers’ Association will be launching a communication campaign to ensure public knowledge of their rights and obligations under the new rules.
Additionally, they are aiming to ensure a smooth and effective transition period over the next two years.
Malta’s fight against money laundering has been one that has plagued the island’s reputation over the last few years. It came to a particular boiling point with Malta’s recent greylisting by the Financial Action Task Force’s (FATF).
As part of the FATF action plan, Malta must increase the focus of the FIAU’s financial analysis on serious tax offences and related money laundering.
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