Anti-Money Laundering Act
Also: AML, PMLA, Anti-money laundering rules
Anti-money laundering law obliges precious metal dealers, above certain thresholds, to identify their customers and to report suspicious transactions.
Anti-money laundering (AML) law in Malta is built on the Prevention of Money Laundering Act (PMLA) and the Prevention of Money Laundering and Funding of Terrorism Regulations, which transpose the European anti-money laundering directives (AMLD) into national law. These rules apply to the commercial trade in precious metals, jewellery and antiquities. Anyone who buys or sells gold, silver or other precious metals commercially is a so-called "subject person" and must fulfil a range of due-diligence obligations under the supervision of the Financial Intelligence Analysis Unit (FIAU).
Who is affected?
Subject persons in the precious metals sector include in particular:
- Gold dealers, refineries and precious metal refiners
- Jewellers and jewellery traders
- Pawnbrokers and buying outlets for scrap gold or broken gold
- Coin dealers who commercially trade in bullion coins or collector coins
Private sellers are generally not subject persons — the due-diligence obligations fall on the commercial counterparty.
The key thresholds
| Situation | Threshold | Obligation |
|---|---|---|
| Cash payment for a precious metal purchase | from €10,000 | Customer identification |
| Other transactions (bank transfer) | from €15,000 | Customer identification |
| Suspicion of money laundering | regardless of amount | Report to the FIAU |
| Transactions with high-risk third countries | from €1 | Enhanced due diligence |
Under the EU framework, traders in goods dealing in cash are treated as subject persons where a transaction (or linked transactions) reaches €10,000. This makes the anonymous over-the-counter transaction — a purchase without proof of identity — impermissible above that amount.
Obligations in detail
Customer due diligence (KYC – Know Your Customer):
- Identification of the counterparty using official photo ID
- Determination of the beneficial owner (e.g. purchases through third parties)
- Obtaining information on the purpose and nature of the business relationship
- Ongoing monitoring of existing business relationships
Internal control measures (for larger businesses):
- Appointment of a Money Laundering Reporting Officer (MLRO)
- Risk assessment and internal policies
- Staff training
- Record-keeping and retention obligations (five years)
Suspicious transaction report to the FIAU: Where there is an indication of money laundering or terrorist financing, the dealer must report this to the Financial Intelligence Analysis Unit (FIAU) — regardless of amount thresholds and before carrying out the transaction.
Consequences of breaches
Breaches of AML law can be sanctioned with substantial administrative penalties imposed by the FIAU. Supervision of subject persons and the enforcement of penalties fall within the FIAU's remit.
Distinction from tax rules
AML law is preventive and governs the prevention of money laundering — it makes no statement about the tax treatment of gains from precious metal sales. In Malta, investment gold is VAT-exempt, while silver, platinum and palladium carry the 18% standard rate of VAT; Malta levies no capital gains tax on private disposals of movable assets such as precious metals. See the VAT exemption for investment gold and investment gold entries. Note: this does not constitute tax or legal advice.
When buying precious metals, sellers should expect that reputable dealers will request a copy of an ID document once cash thresholds are reached — this is a legal obligation, not voluntary.
In brief
AML law obliges precious metal dealers to identify customers once cash thresholds are reached and to report suspicious transactions; private buyers and sellers are not directly affected but should expect their counterparty to have to fulfil these obligations.