The Trusts and Trustees Act (Register of Beneficial Owners) Regulations, 2017 (the “Regulations”) have come into force with effect from 1st January 2018, thereby implementing the relevant provisions on beneficial ownership information of Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, as applicable to trusts and trustees under the Trusts and Trustees Act (the “TTA”).
The Regulations are specifically applicable to trusts set up by virtue of a written instrument (express trust) and which generate tax consequences in Malta.
The Regulations are specifically applicable to trusts set up by virtue of a written instrument (express trust) and which generate tax consequences in Malta
In accordance with the Regulations, trustees authorised to act as such in terms of article 43 or article 43B of the TTA must submit to the Malta Financial Services Authority (“MFSA”) a declaration of beneficial ownership within 14 days of being appointed to act as trustee of an express trust and the MFSA will hold such information in its own register of beneficial owners. As such, the register of beneficial owners held by the MFSA will be interconnected with the central register of Member States in accordance with the aforementioned Directive. The term ‘Beneficial Owner’ includes the settlor, the trustee, the protector and the beneficiaries and where the latter are yet to be determined, the class of persons who may benefit under the trust and any other person exercising ultimate and effective control over the trust.
Existing trustees which have been duly authorised to act as such have been granted a six month grace period, expiring on 30 June 2018, within which to comply with their obligations and submit a declaration of beneficial ownership. The same obligation applies in the case of a change in beneficial ownership of the express trust and accordingly the trustee must notify the MFSA of such change within 14 days from when the change is recorded by the trustee. Moreover the trustee must annually (and in any case by not later than the 31 January of each year) submit a declaration confirming that no changes have been made to the beneficial ownership of the trust in the previous calendar year.
Existing trustees which have been duly authorised to act as such have been granted a six month grace period within which to comply with their obligations and submit a declaration of beneficial ownership
It is noteworthy that with effect from 1st April 2018, information on the beneficial owners of an express trust will be made accessible, without restriction and without the obligation of prior notification to the beneficial owners of the trust, to national competent authorities with designated responsibilities for combating, investigating and prosecuting money laundering and terrorist financing, the FIAU and national tax authorities.
Moreover in terms of the Regulations, access is to be granted in a timely manner to subject persons in terms of the Prevention of Money Laundering and Funding of Terrorism Regulations for the purposes of carrying out due diligence obligations. In order to be granted access such subject persons may be required to submit to the MFSA certain documentation (for example a letter of engagement). The MFSA may also, in exceptional circumstances, refuse access to the beneficial ownership information if such access would expose the beneficial owners to risk of fraud, kidnapping, blackmail, violence or intimidation, or in the case of a minor or incapable person.
Both receipt of information and access to said information is subject to the applicable data protection laws and rules in relation to the processing of personal data.
Failure to comply with the Regulations may result in the imposition of an administrative penalty up to a maximum of EUR150,000.