The limit is 10,000 euro in cash, and it binds buyer and dealer alike.

A dealer who says he is happy to take cash is stating a preference. In Malta the question belongs to criminal law. Breaking the cash limit is an offence for both sides of the counter, and works of art are named in the rule.

Published by ArtisDomus, written by Polina Surina.

The Maltese rules are short and worth reading in full. A separate European Union limit applies from 10 July 2027, and it works differently.

The rules are the Use of Cash (Restriction) Regulations, subsidiary legislation 373.04. They were issued as Legal Notice 81 of 2021, amended by Legal Notice 421 of 2021, and have been in force since 9 March 2021. They are made under the Prevention of Money Laundering Act, chapter 373 of the Laws of Malta. Article 12(1) of that Act lets the Minister make regulations to combat money laundering and the funding of terrorism. He acts on the advice of the Financial Intelligence Analysis Unit (the Unit). Article 16(1)(m) gives the Unit the task of monitoring compliance with any restrictions on cash payments introduced under the Act.

Their purpose is to restrict the use of cash for certain payments and transactions, to fight money laundering and other criminal activity (reg. 1(2)).

The core rule is regulation 3(1). No person may make or receive a payment, or otherwise carry out a transaction, in cash of 10,000 euro or more, or the equivalent in any other currency. This applies to one transaction or to several linked transactions. It covers the purchase or sale of six kinds of goods: antiques; immovable property; jewellery, precious metals, precious stones and pearls; motor-vehicles; sea-craft; and works of art.

Note the amount: the ban starts at 10,000 euro. A payment of exactly 10,000 euro in notes is caught.

Regulation 3(1) applies to any person. It reaches private people as well as traders, professionals and subject persons (those with their own anti-money-laundering duties), and it bans receiving as well as paying. A private buyer who hands over the notes commits the offence, and so does the gallery that accepts them. The Unit monitors and ensures compliance (reg. 10(1)). It may require information and documents from any trader or notary covered by the rules, and carry out on-site checks on them (reg. 10(2)).

Regulation 3(1) names works of art, but regulation 2(2) does not define them. It defines other terms, such as antique, cash, trader and sea-craft. Regulation 2(1) fills the gap. Any word or phrase the regulations do not define has the meaning given in the Prevention of Money Laundering Act and the Prevention of Money Laundering and Funding of Terrorism Regulations.

Those regulations (subsidiary legislation 373.01) define a work of art as follows. It is an original, unique and tangible object of any kind or material, created or executed by hand, or a limited edition reproduction of one. It must be considered to have an imaginative, expressive and aesthetic function, value or appeal, irrespective of artistic quality. Provided those criteria are met, the definition includes paintings, drawings, etchings and decorative plaques; engravings, lithographs or other prints; works of sculpture or statuary; and tapestries. On the same condition it includes ceramic works, and photographs printed and signed by the photographer, including limited edition prints made from the exposure.

The words “irrespective of artistic quality” matter. The artist’s standing and the object’s price play no part, and a limited edition reproduction is included.

The same regulations also make the dealer a subject person in his own right. This covers any individual or legal entity trading in works of art or acting as intermediary in their sale, including art galleries, auctioneers and freeports. It applies where the transaction, or a series of linked transactions, is worth 10,000 euro or more. Freeports are also covered when they store works of art of that value. This threshold depends on the value of the deal, whatever the form of payment, so a bank transfer meets it as readily as cash.

Anyone who breaks regulation 3(1) commits an offence (reg. 3(2)). On conviction the fine (multa) is at least 40 per cent of the amount above 9,999.99 euro, or its equivalent in any other currency. The amount is the sum paid, received or otherwise transacted in cash. Forty per cent is the lowest fine the court may impose; the regulation sets no maximum.

The company behind the individual can also be liable for the fine (proviso to reg. 3(2)). This covers a director, manager or other officer with executive functions in a company, other undertaking or body of persons. If such a person is convicted, the law treats them as its legal representative. The company, undertaking or body is then liable in solidum with them for the fine: either can be made to pay all of it.

The fine is a civil debt owed to the Unit. The Unit holds an executive title for it, so it can enforce payment without another court case (reg. 3(3)).

Settlement is an alternative to criminal proceedings, and it comes with conditions (reg. 5(1)). It needs the consent of the Attorney General, and it is open only before the person is charged in court. The agreement with the Unit must come with payment or sufficient security (reg. 5(2)). Criminal liability for that offence ends only once payment is made (reg. 5(3)).

People often assume the opposite of regulation 6. A payment or transaction that breaks regulation 3(1) stays legally valid, and so does the contract behind it. All parties remain bound by their contractual obligations despite the breach. The offence is committed, and the sale stands.

The rules require no notarial record for an art sale. Regulation 7 applies to deeds of purchase or sale of immovable property worth 10,000 euro or more. The parties must give the notary the identity of buyer, seller and agents. They must also give the payment details. For a transfer, that is the payment account IBAN; for a card, the card number and issuing institution; for a cheque or bank draft, its number and drawee. For any other method, including payment in kind, they give the means and the exact amount. The notary keeps this for five years from the transaction or, for linked transactions, from the last of them (reg. 9(1)). This duty covers immovable property, and a painting is outside it.

The Unit may ask other national authorities for help and exchange information with them, including the Police, the Attorney General and the Commissioner for Revenue (reg. 11). When it imposes a penalty, issues a written warning or finds a breach of regulation 3(1), it may inform the body that licenses or regulates the trader or notary.

The European Union adds a second limit. Persons trading in goods or providing services may accept or make a cash payment only up to 10,000 euro or the equivalent (art. 80(1), Regulation (EU) 2024/1624 of 31 May 2024). This applies whether the transaction is one operation or several that appear to be linked. Member States may adopt lower limits (art. 80(2)). Lower national limits that already existed stay in place; they were to be notified to the Commission by 10 October 2024 (art. 80(3)). The EU limit does not apply to payments between natural persons not acting in a professional capacity. It also does not apply to payments or deposits made at the premises of credit institutions, electronic money issuers and payment service providers (art. 80(4)). The Regulation applies from 10 July 2027 (art. 90).

The two rules share a figure and differ in reach. The Maltese offence applies to any person, for six classes of goods. The EU limit applies to persons trading in goods or providing services, exempts payments between private individuals acting outside a professional capacity, and covers every class of goods. So a private sale of a painting between two collectors in Malta falls inside the Maltese ban and outside the EU limit.

A general summary of the law; it does not replace legal or tax advice.