On 14 November 2025, the National Interest (Enabling Powers) Act (the “Revised NIA”) was published in the Government Gazette, marking the first substantive revision to Malta’s sanctions framework since April 2020. This latest reform represents a broad modernisation effort, introduced to keep pace with the significant developments that have reshaped EU restrictive measures in recent years.

Below, we take a closer look at the key changes in the Revised NIA and the resultant implications for Malta’s sanctions framework.

1. Strengthening alignment with the EU restrictive measures

The Revised NIA now explicitly transposes and implements the latest EU sanctions and financial transparency rules across the following three major EU instruments:

  1. Directive (EU) 2024/1226 – Formalising the definition of criminal offences and penalties for breaches of Union restrictive measures and amending Directive (EU) 2018/1673.
  2. Regulation (EU) 2024/886 – Governing instant credit transfers in euro and amending Regulations (EU) No. 260/2012 and (EU) 2021/1230 and Directives 98/26/EC and (EU) 2015/2366.
  3. Regulation (EU) 2023/1113 – Setting detailed requirements for information accompanying funds transfers and certain crypto-assets, enhancing traceability in digital transactions and amending Directive (EU) 2015/849 (recast).

2. Introduction of a clear distinction between Criminal Offences and Administrative Breaches

The most significant structural reform is the introduction of a clear split between criminal offences and administrative failures, based on a financial threshold.

  1. The €10,000 Threshold: Specific breaches of prohibitions, such as making funds available, failing to freeze assets, or circumventing sanctions do not constitute a criminal offence if the funds, economic resources, goods, services, transactions, or activities involved are valued at less than €10,000. These minor infractions are instead deemed administrative failures subject to specialised procedures.
  2. The “Linked Series Rule”: To prevent the avoidance of criminal liability through repeated small-value breaches, the Revised NIA introduced the “linked series rule.” Under this provision, authorities may aggregate related conduct of the same type by the same offender to determine whether the €10,000 threshold for criminal prosecution has been met.

3. Clearer Enforcement Actions

The Revised NIA enhances the SMB’s ability to enforce sanctions through clearer settlement and debt recovery processes:

  1. Stricter Settlement Mechanism: The Revised NIA now formalises out-of-court settlement procedures, allowing alleged offenders to resolve certain offences through and out-of-court settlement agreement with the SMB. The out-of-court settlement procedure may be applied in instances where criminal proceedings have been instituted against a person and also in those instances where criminal proceedings have not been instituted.
  2. Executive Debt Recovery: Penalties that are not appealed and remain unpaid within 20 working days are recoverable as a civil debt and automatically constitute an executive title.

4. Expansion of roles and powers of the Sanctions Monitoring Board

The Revised NIA broadens the statutory remit of the SMB, granting it more supervisory and enforcement capabilities over the ones it previously had, enabling more proactive oversight and enforcement of Malta’s sanctions framework. The Revised NIA expressly provides for provisions relating to the SMB’s functions in:

  1. monitoring and enforcement of the expanded obligations of subject persons;
  2. exchange of information for strategic purposes;
  3. coordination and cooperation between enforcement authorities and authorities in charge of implementation;
  4. the authority to appoint temporary administrators within the context of the establishment of firewalls;
  5. issuing freezing measures.

5. Issuing of freezing measures

In case where the SMB has reasonable grounds to believe that economic resources are owned or controlled by a designated person, entity or body, it shall issue a freezing measure, attaching the said economic resources in the hands of third parties for which there is a reasonable cause to believe that the economic resources are subject to freezing. Such freezing measures shall be published without delay in the Government Gazette and a copy of the same shall be registered in the Public Registry, the Land Registry, the Registry of Companies and any other registry established by law.

6. Appointment of a Temporary Administrator

The SMB is granted the authority to appoint a temporary administrator to a legal person if sanctions are issued against that person, its owner or its controller, specifically when such intervention is necessary to avoid adverse social, economic, ecological or other significant consequences for the public or Malta.

7. Request for revision of SMB Rulings

Similar to the position under the previous NIA, a person, entity or body may request in writing the SMB to give a ruling on whether a proposed immediate action intended by him is prohibited by any restrictive measures. The Revised NIA introduces provisions which allow for such persons to request a reconsideration of such ruling within 5 working days from the notification of the ruling, decisions or denial for an authorisation, however such reconsideration may only be requested in respect of an error of fact by the SMB. The request for reconsideration is without prejudice to the right of appeal before the Sanctions Implementation Appeals Board, provided that such appeal shall not be made concurrently with a request for reconsideration.

8. Creation of the Sanctions Appeals Tribunal and Registry of the Tribunal

The Revised NIA establishes the Sanctions Implementation Appeals Tribunal as a dedicated forum to hear appeals against SMB decisions, whether such decisions are rulings of the SMB or administrative penalties imposed by the SMB. The Revised NIA also mandates the creation of a Registry of the Tribunal, ensuring that all records are systematically filed and accessible to the public.

9. Enhanced Compliance Obligations and Risk Mitigation

The Revised NIA introduces more detailed obligations for persons undertaking ‘relevant financial business’ and ‘relevant activity’ in terms of the PMLFTR. The Revised NIA requires such persons to (to the extent applicable):

  1. adopt a sanctions risk assessment. Subject persons are required to identify and assess the risks of violations of restrictive measures and proliferation financing and circumvention thereof. Such assessment shall be documented and made available to the SMB upon request.
  2. undertake daily instant transfer screening. Payment service providers offering instant credit transfers shall verify whether their payment service users are subject to EU restrictive measures at least once every calendar day.
  3. undertake customer due diligence and retain records. Compliance duties were expanded further, introducing more prescriptive obligations relating to customer due diligence. Specific obligations were introduced in relation to the verification of ownership and control structures of customers.
  4. adopt procedures relating to compliance with the Transfer of Funds Regulation (Recast): Whilst this requirement has been in place since the 30 December, the Revised NIA clearly mandates subject persons which are subject to the Transfer of Funds Regulation (Recast) to adopt specific procedures relating to the entity’s compliance with such regulation, in particular in relation to self-hosted wallets.
  5. notify the SMB in case of suspected violations of sanctions. Upon becoming aware, immediately notify the SMB of any suspected violations of EU, UN and domestic restrictive measures.
  6. ensure record retention. The Revised NIA caters for a record retention period of five (5) year record retention. Subject persons are therefore required to adopt procedures to ensure that they are able to evidence compliance with the obligations emanating from the Revised NIA.