Commencement notice

L.N. 427 of 2003

VARIOUS LAWS (AMENDMENT) ACT, 2003

(ACT NO. IX OF 2003)

Commencement notice

IN exercise of the powers conferred by articles 1(2), 29 (2) and

35 of the Various Laws (Amendment) Act, 2003, hereinafter referred

Act No. IX of 2003. to as “the Act”, the Minister of Finance and Economic Affairs has

established the following dates as the dates on which the following

provisions of the Act shall come into force>-

(a)

with immediate effect in respect of article 35 of the

Act<

(b) as from the 1st January, 2004, in respect of articles

30 to 34 of the Act, other than paragraphs (c) and (d) in the

definition “resident” in article 2 and the proviso to sub-article (1)

of article 4 of Cap. 233 in article 33 of the Act< and

(c) as from the 1st May, 2004, in respect of article 33 of the

Act as relating to paragraphs (c) and (d) in the definition “resident”

in article 2 and the proviso to sub-article (1) of article 4 in Cap.

233. The Minister of Finance and Economic Affairs has also provided

that all restrictions and, or obligations existing under the Exchange

Control Act, as in force before the issue of this notice and listed

hereunder, shall remain in force for such time as the said Minister shall

by notice in the Gazette prescribe, and the provisions of the Exchange

Control Act as in force before the issue of this notice shall continue to

apply with respect to any such restriction or obligation>-

The maximum limit on payments by residents in connection

with cash gifts or family living expenses is Lm30,000 per adult person

each year.

The opening and maintenance of current accounts by residents

with overseas credit institutions is not permitted. Financial services

companies which provide investment services to their clients are

permitted to open and maintain clients’ current accounts with overseas

credit institutions.

The maximum limit on foreign currency holdings Foreign

holdings – resident

(cash#cheques) that a resident is exempted from surrendering to an (natural person).

institution licensed to carry on the business of foreign exchange

(formerly referred to as an authorised dealer) is the equivalent of

Lm50,000.

The holding of foreign currency current accounts by natural Foreign currency

current accounts

persons with local credit institutions is permitted subject to the following with local credit

institutions –

conditions>

resident (natural

person).

(i) that funds deposited are already denominated in foreign

currency< and

(ii) the maximum aggregate balance in such accounts does

not exceed the equivalent of Lm50,000.

The holding of foreign currency accounts (current, savings, Foreign currency

fixed) by companies#retail outlets with local credit institutions is accounts

credit institutions –

permitted subject to the following conditions>

companies#retail

outlets.

(i) that funds deposited are already denominated in foreign

currency< and

(ii) balances may only be used to effect overseas payments

in connection with business costs.

Agents who receive payments in foreign currency from local

customers for import of goods and services may deposit such funds

into foreign currency accounts with local credit institutions. However,

such receipts have to be remitted to the foreign counterparty company

within a month of receipt.

While foreign portfolio investments are not subject to any Foreign portfolio

investment.

quantitative limit, residents are not permitted to place funds in portfolio

assets with a maturity period of less than six months.

Residents are not permitted to extend financial loans to non- Financial

residents to non-

residents for periods of less than six months.

residents.

Residents are not permitted to borrow in foreign currencies Financial loans to

residents in foreign

from resident or non-resident sources for periods of less than six months. currency.

Fund investment schemes which collect funds in Maltese lira Investment by local

fund investment

from residents with the specific aim of investing such funds in Maltese schemes.

lira-denominated assets are not permitted to maintain foreign currency

assets in excess of 15% of their shareholders’ funds.

Residents are not permitted to enter into life insurance

contracts with non-resident life insurance companies except in cases

where the policy of insurance provides solely for the payment of a sum

of money or other consideration upon the occurrence of death within a

period which is specified in the policy.

Residents are not permitted to enter into non-life insurance

contracts involving motor vehicle insurance with non-resident

companies (that is any premium in terms of Group 2 of Part II of the

Third Schedule to the Insurance Business Act, which provides for

policies of insurance issued by an authorised insurer as defined in the

Motor Vehicles Insurance (Third Party Risks) Ordinance.

Institutions licensed to carry on the business of foreign

exchange are not permitted to enter into spot#forward contracts relating

to capital account transactions where funds in Maltese lira borrowed by

the resident or non-resident counterparty are used in the transaction.

Residents undertaking export transactions are not permitted

to retain export proceeds in accounts with foreign credit institutions.

They are however permitted to deposit such proceeds in foreign accounts

with local credit institutions.

Applications by non-residents for the issue, acquisition, sale

sale and redemption

and redemption of securities not listed on the Malta Stock Exchange in

local companies established, or to be established, in Malta have to be

cleared by the Registrar of Companies at the Malta Financial Services

Authority. This procedure does not apply to companies as defined in

article 2 of the Income Tax Act, (that is, international holding#trading

companies) and to companies which own a vessel registered under the

Merchant Shipping Act, and where the resident participation does not

exceed 20%.

Mitbug[ fl-Istamperija tal-Gvern — Printed at the Government Printing Press