The rapid growth of Malta’s real estate industry has prompted the government to enact the ‘Real Estate Agents, Property Brokers and Property Consultants Act, 2020’ (L.N. 291 of 2020). This legislation is designed to formalize and regulate the activities of real estate agents, property brokers, and property consultants, serving as intermediaries in property transactions, while also ensuring compliance with Malta’s Anti-Money Laundering (AML) regulations.
Key points of the legislation and AML regulations include:
- Licensing Requirements: As of December 31, 2021, individuals engaged in the activities of property brokering, real estate agency, or as property consultants must possess a valid license issued by the Real Estate Licensing Board. This ensures a standardized and regulated approach to conducting business in the real estate sector.
- AML Obligations: Under the Prevention of Money Laundering and Funding of Terrorism Regulations (PMLFTR), real estate agents are considered “subject persons” for AML purposes. This includes those acting as intermediaries in property transactions where the monthly rent equals or exceeds €10,000. Subject persons are required to implement measures to identify and assess money laundering and terrorism financing risks arising from their professional activities.
- Subject Persons Definition: Subject persons, as defined by the PMLFTR, include auditors, external accountants, tax advisors, real estate agents, notaries, legal professionals involved in financial or real estate transactions, trust and company services providers, nominee companies, casino and gaming licensees, traders in goods (cash transactions of €10,000 or more), and those trading in works of art or as intermediaries.
- Risk Mitigation Measures: Subject persons must establish and maintain measures, policies, controls, and procedures to address the risks of money laundering and terrorism financing. These include customer due diligence (cdd) measures, record-keeping procedures, reporting procedures, training and awareness initiatives, and risk management measures.
- FIAU Guidelines: The Malta Financial Intelligence Analysis Unit (FIAU) have issued Implementing Procedures in terms of Regulation 17 of the Prevention of Money Laundering and Funding of Terrorism Regulations (PMLFTR), which are legally binding on all persons carrying out relevant financial business or relevant activity from the date they are issued. These procedures lay out the full extent of the obligation on Real Estate Agents and Notaries, who are both subject persons, to carry out necessary customer due diligence.
- Customer Due Diligence (“CDD”): measures principally consist of identifying and verifying the customer, and where applicable the beneficial owners (“BOs”), understanding the ownership and control structure, and obtaining sufficient information to understand the purpose and intended nature of the business relationship (including the source of wealth, expected source of funds and anticipated level of business).
- Record-keeping procedures: Under Maltese law and international best practices, subject persons must keep relevant documentation and information to aid any potential investigations made by the relevant authorities. What information can be stored and for how long is laid down both by national law and at an EU level, including GDPR.
Whilst move2Gozo is one of the first agencies in Malta to receive a Real Estate Licence (PB-00015-22) under these regulations, we are also obligated, as subject persons, to carry out due diligence under the AML regulations of Malta, highlighting a commitment to compliance and professional standards in the real estate sector.