A new way of settling regulatory non-compliance: Highlights of the recently published L.N. 82/2026 and L.N. 83/2026 amending the PMLFTR and CBAR Regulations

On April 1, 2026, two new legal notices were officially published in the Government Gazette, through L.N. 82/2026 and L.N. 83/2026, bringing changes to the Prevention of Money Laundering and Funding of Terrorism Regulations (“PMLFTR”) and “Centralised Bank Account Register Regulations (“CBAR”) respectively.

A new route to resolution: Settlement agreements

Perhaps the most practically significant development introduced by these legal notices is the formal settlement agreement mechanism. Under both amendments, the FIAU now has the power to negotiate a reduced administrative penalty with a subject person, provided certain conditions are met. The subject person must unconditionally accept the FIAU’s findings, commit to any corrective actions required, and waive any right to appeal. In return, the penalty can be reduced, with the discounted portion written off entirely once the required remedial actions have been completed. Should the subject person fail to follow through or choose not to engage, the full original penalty is reinstated and the FIAU is entitled to pursue recovery through the Civil Court.

How often can the settlement route be used?

There are clear limits to how often this route can be used. No more than two settlement agreements can be concluded with the same subject person within any two year period, and where a subject person forms part of a group, settlements entered into across the group count towards that cap.

Beyond the frequency limits, the FIAU cannot enter into a settlement agreement in every circumstance. Two situations are explicitly ruled out. The first is where the FIAU takes the view that settling would not be in the public interest, a judgement guided by policies set by its Board of Governors. The second is where at least two years have not yet passed since the completion of any corrective or remedial actions taken under a previous settlement agreement. Firms that have only recently concluded a prior settlement cannot therefore immediately seek another one.

The intention behind this restriction is clear, the regulations are designed to ensure that the settlement process does not become a mechanism that is repeatedly relied upon as an easy way out.

A wider enforcement circle

The definition of competent authority has been expanded to include the Security Service, the Sanctions Monitoring Board, and the Internal Audit and Investigations Directorate. This broadening reflects the increasingly cross institutional nature of financial crime enforcement and signals a more cohesive approach across public bodies. Real estate agents and property brokers now fall more clearly within the regulatory perimeter too, with the Property Market Agency formally listed as a supervisory authority.

Sharing bank account register data across borders

Besides largely mirroring the enforcement changes relating to settlement agreements introduced by L.N. 82/2026, L.N. 83/2026, which focuses on the Centralised Bank Account Register, allows register data to be shared beyond the usual circle of listed authorities, including with foreign or supranational bodies, subject to equivalence checks on confidentiality and data protection standards. This is a notable development for those operating across multiple jurisdictions, as it signals a greater willingness to facilitate cross border information exchange within a structured legal framework.

Transitory provisions

Both legal notices also introduce transitory provisions that merit close attention. For a period of six months from the entry into force of the regulations, subject persons with an appeal already pending against an FIAU administrative penalty, or who formally notify the FIAU of such an appeal, or who would have otherwise been eligible to enter into a settlement agreement had this been possible at the time that the administrative penalty appealed from was imposed, may opt to pursue an out-of-court settlement.

In practical terms, this creates a defined pathway for resolving existing disputes under the newly introduced framework. Where a settlement is reached, any reduction in the administrative penalty is capped at fifty per cent of the original amount. In return, the subject person is required to unconditionally accept the FIAU’s findings, commit to the immediate implementation of any outstanding remedial actions, and waive the right to pursue further judicial challenge.

Against this backdrop, firms currently navigating an appeal may wish to reassess their position in light of this temporary option, taking into account both the potential benefits and the commitments that such a route entails.

What this means in practice

Taken together, the introduction of formal settlement agreements is arguably the most significant structural change brought about by these two legal notices as there is now greater clarity on what cooperative engagement looks like, what it involves, and what the consequences are if an agreement is not reached or not honoured. Subject persons may not have additional options to resolve any non-compliance with legal and regulatory requirements. Definitely a welcomed enhancement to the Maltese legal and regulatory enforcement framework.

Should you require any assistance with regards to any settlement agreements or require any clarifications, feel free to contact Mario Zerafa and/or Karl Wismayer.