The Directive No 19 on the use of cheques and bank drafts in terms of the CENTRAL BANK OF MALTA ACT (Cap. 204) came into force on the 1st of January 2022.
This directive seeks to ensure the safe and effective use of cheques and bank drafts, referred to as ‘paper-based instruments’, to reduce the legal and operational risks associated with these payment instruments.
The below is a summary of the main Rules of the Directive:
- Cheques will only be encashed or credited to the person named by the payer
- Cheques cannot be dated to a future date, and may be accepted in any case if presented before that future date
- Cheques over €5,000 can only be deposited into the beneficiary’s own account
- Cheques cannot be issued for amounts of €20 or less
- Cheque facilities will be withdrawn if cheques are repeatedly issued that cannot be honoured.
- Service providers will ensure that all information related to cheques is retained for at least five years
- Users who breach the regulations are subject to fines up to €200 for each contravention.
The below is a summary of the main Regulations of the Directive:
- The restrictions imposed by the regulations apply to anyone even if for an unregestered private seller
- The Regulations prohibit any person from making or receiving payment or otherwise carrying out transactions in cash amounting to or exceeding 10.000 euros or its equivalent in any other currency, whether in one transaction or in several linked transactions, in respect of the purchase or sale of antiques, immovable property, jewellery and precious stones, motor-vehicles, sea-craft and works of art
- A branch of the above-mentioned cash transaction limit constitutes an offence which renders the offender liable, upon conviction by the Court of Magistrates in its criminal jurisdictions, to a fine (multa) or criminal proceedings depending on the case
- Failure by traders and notaries to abide by the procedures and requirements issued by the FIAU will result in an administrative penalty of not more than 5.000 euros.