AML/CFT obligations of a notary emanating from the European and Maltese framework in light of the European Commission’s action plan for a comprehensive union policy on AML/CFT

Abstract

The existing AML/CFT legislative framework, designed to regulate notaries and other obligated entities in combating money laundering (ML) and terrorist financing (TF), has shortcomings in practical implementation. A major issue is the lack of harmonization within the European AML/CFT framework, stemming from its reliance on a series of directives that need transposition by each member state. Some states have enacted stricter provisions than required by these directives, creating discrepancies and opportunities for criminals to exploit the more lenient jurisdictions. This lack of harmonization not only affects cross-border operations for notaries but also adds on to the financial and psychological strain as they strive to be compliant. To address this, the European Commission introduced an Action Plan for a comprehensive AML/CFT policy, including a regulation with direct applicability to address uniformity issues, since of its very nature, a regulation bypasses the transposition stage. While the Regulation has as its foundation the existing 5th AML Directive, it does not merely shift the provisions from the directive to the regulation but also introduces various provisions aimed at improving the current AML/CFT framework within which notaries are made to operate. To compliment the proposed regulation, the Commission has also proposed the creation an EU Authority for AML and CFT (“AMLA”) which will act as an EU-level oversight and coordination system between obliged entities and national FIUs.