Malta Introduces Revised National Interest (Enabling Powers) Act Strengthening The National Sanctions Framework

Malta has formally enacted the revised National Interest (Enabling Powers) Act on 14 November 2025, marking a major update to the country's sanctions framework and introducing a suite of reforms that incorporate new EU legislative requirements while reinforcing the statutory powers of the Sanctions Monitoring Board (SMB).

Alignment with EU and UNSC Restrictive-Measures Regimes

The Act expressly implements and transposes:

• Directive (EU) 2024/1226 on the definition of criminal offences and penalties for the violation of Union restrictive measures
• Regulation (EU) 2024/886 on instant euro credit transfers
• Regulation (EU) 2023/1113 on information accompanying transfers of funds and certain crypto-assets

The Act also confirms the direct applicability of EU restrictive measures and UNSC Resolutions in Malta, ensuring immediate binding effect upon publication.

Clear Distinction Between Criminal Offences and Administrative Failures

The Act introduces a more structured enforcement regime by distinguishing criminal offences from administrative infringements. A €10,000 threshold determines the categorisation, and in applying it, regard shall be had to any series of conduct that is linked and of the same kind. Conduct falling below this threshold is treated as an administrative failure. Conduct exceeding the threshold constitutes a criminal offence and is punishable by imprisonment and/or substantial fines.

New Dual Out-of-Court Settlement Mechanisms

A major procedural innovation is the introduction of two out-of-court settlement mechanisms: one available before criminal proceedings are initiated, and another available after proceedings have commenced but before judgment. In both cases, a settlement extinguishes criminal liability once its terms are fully complied with, with the Court formally declaring the action extinguished where proceedings have already begun.

Enhanced Powers for the Sanctions Monitoring Board (SMB)

The Act significantly expands the statutory remit and powers of the SMB, which is now expressly empowered to:

• Monitor the implementation of EU, UNSC and domestic restrictive measures, as well as enforce the obligations imposed on subject persons under Articles 32 and 33.
• Impose administrative penalties for a wide range of breaches falling within its supervisory scope.
• Conduct onsite and offsite inspections in accordance with its internal policies and procedures.
• Ensure coordination and cooperation between law-enforcement and implementation authorities, and exchange information for strategic purposes within applicable legal limits.

Appointment of Temporary Administrator

One of the most substantial innovations is the introduction of a firewall mechanism that enables the SMB to appoint a temporary administrator to a legal person where EU, UNSC or domestic restrictive measures are implemented in Malta in respect of that person (or its owner or controller), in order to avoid significant social, economic, ecological, or other adverse consequences for the public or Malta.

Where appointed, the temporary administrator is responsible for decisions relating to the realisation of economic resources.

Sanctions Implementation Appeals Tribunal and Public Registry

A key structural reform is the creation of the Sanctions Implementation Appeals Tribunal, an independent tribunal empowered to hear appeals from SMB decisions, including refusals of authorisation and reconsiderations. The Act further establishes a Registry of the Tribunal. 

Expanded Obligations for Subject and Non-Subject Entities

Article 32 sets out comprehensive obligations for subject persons, defined by reference to Schedule I as any natural or legal person conducting relevant activity or relevant financial business under the Prevention of Money Laundering and Funding of Terrorism Regulations.

Key duties include:

• Identify customer identity and verify ownership and control structures;
• Conduct ongoing screening against UNSC, EU and domestic sanctions lists;
• Maintain effective internal controls, policies and procedures to ensure compliance with the Act and with EU, UNSC and domestic restrictive measures, including the requirements of Regulation (EU) 2023/1113;
• Immediately notify the SMB of any targeted funds or economic resources identified and of any suspected violations of EU, UNSC or domestic restrictive measures;
• Identify and assess the risks of restrictive-measures violations, proliferation financing, and circumvention arising from their activities or business;
• refrain from notifying clients or third parties in advance that a freezing order is to be put in place;
• Retain records for five years from the end of the business relationship.

Non-subject persons remain bound by the Act's freezing obligations and prohibitions on making funds or economic resources available to designated persons, and must provide information to the SMB on request.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.