MALTA

6. Other Relevant Matters

A. Regulation Of Trustees

The sole regulator of financial services in Malta is the MFSA, an autonomous public institution with broad powers of supervision and investigation. The financial services sector incorporates all financial activity, including that of credit institutions, financial and electronic money institutions, securities and investment services companies, regulated markets, insurance companies, and pension schemes. Trustees and other fiduciaries (including administrators of foundations) are also regulated by the MFSA. Therefore, unless otherwise exempted, any individual or entity acting as trustee needs to be authorised by the MFSA.

There are two types of trustees: professional trustees and private trustees. A professional trustee is defined as any trustee who receives or is entitled to remuneration for so acting, does so on a regular and habitual basis, or holds himself out to be a trustee. A professional trustee is required to obtain authorisation from the MFSA to act as such, irrespective of the proper law of the trusts they administer and irrespective of whether or not all or part of the trust property is situated in Malta. On the other hand a private trustee is a person who is related to the settlor or who has known the settlor for more than ten years. Private trustees do not need to be authorised to act as such, but must follow a notarial procedure laid down by law (article 43A Trusts and Trustees Act, chapter 331 of the Laws of Malta) and use the services of a depository notary to hold the records of the trusts they administer.

B. Anti-money Laundering And Counter Terrorist Financing

Malta is a member (indeed a founding member) of the Select Committee of Experts on the Evaluation of Anti-Money Laundering Measures (MONEYVAL, formerly PC-R-EV), which was established in September 1997 by the Committee of Ministers of the Council of Europe, to conduct self and mutual assessment exercises of the anti-money laundering measures in the 24 Council of Europe countries that are not members of the Financial Action Task Force. Malta chaired the committee until December 2003.

The Maltese Financial Intelligence Analysis Unit (FIAU), set up under the terms of the Prevention of Money Laundering Act 1994, also became a member of the Egmont Group in July 2003. When exchanging information with its foreign counterparts, the FIAU follows the Egmont Principles for Information Exchange between Financial Intelligence Units for Money Laundering cases.

In June 2011 the MONEYVAL team of evaluators completed the fourth evaluation round in Malta. A 'key findings' document was discussed with the Maltese authorities and a draft report is being finalised in preparation for its adoption by MONEYVAL at the 38th Plenary Meeting, to be held in March 2012.

Malta has fully transposed the EU's Third Money Laundering Directive by means of the Prevention of Money Laundering and Funding of Terrorism Regulations 2008, introduced by Legal Notice 180 of 2008.

Trustees are also subject persons for the purposes of this legislation. Guidance in this respect has thus far been provided by a code of conduct for trustees published by the MFSA, which came into force in February 2005 and can be found on the MFSA's website. This code of conduct stresses the need for a proper due diligence exercise to be carried out before a decision is made to act for any new customer, as well as the importance of trustees having policies and procedures in place that are adequate to ensure that they know the identity of each settlor and protector, on a regularly updated basis, and, to the fullest extent possible, the identity of the beneficiaries. The code of conduct also requires trustees to verify the source of all assets settled, to satisfy themselves that they are not of illicit origin and to ensure that they comply with the relevant legislation. Given that the relevant legislation now reflects the Third Money Laundering Directive, trustees must be vigilant to ensure compliance with the new obligations it imposes. In May 2011, the FIAU issued the Implementing Procedures for the Prevention of Money Laundering and Funding of Terrorism Regulations. These implementing procedures are intended to assist subject persons in understanding and fulfilling their duties under the regulations. The implementing procedures outline the requirements set out in the Prevention of Money Laundering and Funding of Terrorism Regulations and the obligations emanating from the Prevention of Money Laundering Act; they interpret the requirements set out in the Regulations and other obligations emanating from the Act; they assist subject persons in designing and implementing systems and controls for the prevention and detection of money laundering and the funding of terrorism; they seek to provide industry-specific good practice guidance and direction, and promote the use of a proportionate risk-based approach to customer due diligence measures.


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