Regulations, 2017

Suppliment tal-Gazzetta tal-Gvern ta’ Malta Nru. 19,924, 20 ta’ Diċembru, 2017

L.N. 373 of 2017

TRUSTS AND TRUSTEES ACT

(CAP. 331)

Trusts and Trustees Act (Register of Beneficial Owners)

Regulations, 2017

IN exercise of the powers conferred by article 57(1)(t) of the

Trusts and Trustees Act, the Minister responsible for the regulation of

financial services, on the advice of the Malta Financial Services

Authority, has made the following regulations:-

(1)

The title of these regulations is Trusts and Trustees Citation and

scope.

Act (Register of Beneficial Owners) Regulations, 2017.

(2) The purpose of these regulations is to implement 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 Act, and they shall be interpreted and

applied accordingly.

(3) These regulations shall come into force on 1st January

2018, other than the provisions of regulation 6 relating to access to

the register of beneficial owners which shall come into force on 1st

April, 2018.

(1)

In these regulations, unless the context otherwise Interpretation.

requires –

"Act" means the Trusts and Trustees Act;

"Authority" means the Malta Financial Services Authority;

"beneficial owner" shall have the meaning assigned to it under

the Prevention of Money Laundering and Funding of Terrorism S.L. 373.01

Regulations, specifically as applicable to trusts, and for the purposes

of these regulations shall be specifically applied to the following

(a)

the settlor;

(b)

the trustee(s);

(c)

the protector, if any;

(d)

the beneficiaries, or where the individuals

benefiting from the trust have yet to be determined, the class of

persons in whose main interest the trust is set up or operates;

and

(e)

any other person exercising ultimate and effective

control over the trust by any means, including any person (other

than those already referred to in paragraphs (a) to (d) of this

definition) whose consent is to be obtained, or whose direction

is binding in terms of the terms of the trust instrument or of any

other instrument in writing, for material actions to be taken by

the trustee; and

"beneficial ownership" shall be construed accordingly;

"declaration of beneficial ownership" shall have the meaning

assigned to it in regulation 3;

"express trust" means a trust which is set up in writing, by

means of a trust instrument as defined in the Act;

"Financial Intelligence Analysis Unit" means the Unit

established under the Prevention of Money Laundering Act;

"material actions" means the following actions or any other

actions achieving the same result

(a)

the amendment of the trust instrument;

(b)

the addition or removal of any beneficiary, or any

person from a class of beneficiaries, or any action affecting the

entitlement of a beneficiary;

(c)

the appointment or removal of trustees or

protectors or to give another individual control over the trust;

(d)

the acceptance of an additional settlor as may be

applicable in terms of the terms of the trust instrument;

(e)

the change of the Proper Law of the trust;

(f)

the assignment or transfer of all or most of the

assets of the trust or the termination or revocation of the trust;

"officers" means the directors of a trustee which is set up as a

company or, where the trustee is another body corporate, the persons

entrusted with the management and administration thereof.

(2) These regulations shall only apply to any express trust

which generates tax consequences and irrespective of the manner in

which the trust is treated, or elects to be treated in terms of the Cap. 123

Income Tax Act.

(3) Unless otherwise stated or the context otherwise requires,

terms and expressions used in these regulations which are also used in

the Act and in the Prevention of Money Laundering and Funding of S.L. 373.01

Terrorism Regulations, shall have the same meaning as in the Act or

in the said regulations, as the context may require.

(1)

With effect from the date of the coming into force Declaration of

of these regulations a trustee who is authorised or registered in terms beneficial

ownership.

of article 43 or article 43B of the Act shall, within fourteen days of

being appointed as a trustee of an express trust, submit to the

Authority a declaration of beneficial ownership, in the form set out by

the Authority, in respect of every such trust which generates tax

consequences. The declaration of beneficial ownership shall include

the information referred to in sub-regulation (2) on all the beneficial

owners of the trust, shall be signed by the trustee. Where the trustee is

a company, such declaration shall be signed by at least two directors,

and where the trustee is another body corporate it shall be signed by

at least two persons entrusted with the management and

administration thereof.

(2) Without prejudice to the customer due diligence

requirements emanating from the Prevention of Money Laundering S.L. 373.01

and Funding of Terrorism Regulations and any implementing

procedures issued thereunder, the information on the beneficial

owners of the trust to be provided to the Authority in accordance with

sub-regulation (1) shall, in respect of each beneficial owner, consist

of

(a)

the name;

(b)

the date of birth;

(c)

the nationality;

(d)

country of residence;

(e)

an official identification document number

indicating the type of document and the country of issue;

(f)

the role of the beneficial owner in relation to the

trust, in terms of paragraphs (a) to (e) of the definition

"beneficial owner" under regulation 2; and

(g)

in the case of a beneficiary as defined under

paragraph (d) of the definition "beneficial owner" under

regulation 2, the nature and extent of the benefit as well as,

where applicable, an indication as to whether the trust

instrument includes any suspension of the trustee’s duty to

inform such beneficiary of his benefit under the trust or that he

forms part of a class of beneficiaries which may so benefit.

(3) For the purposes of this regulation, where the beneficiaries

of a trust are a class of beneficiaries, the following rules shall apply

unless stated otherwise in the trust instrument or any other instrument

indicating the beneficiaries of the trust

(i) the class shall be described and its members

declared as required by this regulation;

(ii) when reference is made to the "family" of a

person, the class is considered to be made up of the person,

his direct ascendants, his spouse, his direct descendants,

and unless excluded, their respective spouses;

(iii) when a child is born or a marriage takes

place, unless stated otherwise, such child and spouse shall

be declared within three months of the birth or marriage;

(iv) "children" include children born out of

wedlock and adopted children;

(v)

"spouse" includes the person who the

relevant person is married to at the relevant time and not

persons who they have divorced or separated from, and

also includes persons with whom there is a civil union or a

cohabitation or a de facto arrangement recognized by law

in the country where they are habitually resident, including

where permitted, of the same gender;

(vi) the information prescribed in this sub-

regulation shall be submitted to the Authority as soon as a

beneficiary is determined from such a class, or is appointed

as a beneficiary under the trust, whichever is the earlier

Provided that nothing in the above shall affect

the interpretation of a trust instrument or any other

instrument indicating the beneficiaries of the trust, or any

entitlements of persons who may or may not be

beneficiaries or have any entitlements, which shall be

governed by the trust instrument or any such other

instrument and principles of applicable law, and the

declaration made for the purposes of these regulations may

not be used for the purpose of proving whether an

entitlement exists or not or the extent thereof.

(4) Where a trust is set up solely for a charitable purpose in

terms of the Act, and which does not have any beneficiaries as

defined in paragraph (d) of the definition "beneficial owner" under

regulation 2, the trustee shall only be required to provide the

beneficial ownership information relating to the persons mentioned in

paragraphs (a) to (c) and (e).

(5) A trustee shall not enter the name of any beneficial owner

as defined in these regulations, in the declaration of beneficial

ownership unless it has carried out customer due diligence

obligations in terms of the requirements under the Prevention of S.L. 373.01

Money Laundering and Funding of Terrorism Regulations

Provided that information contained in a trust instrument,

any other instrument indicating the beneficiaries of the trust, a power

of attorney, an engagement or instruction letter, or any other official

document, shall be deemed to be sufficiently reliable for the purposes

of carrying out the duties under this regulation.

(1)

The information on the beneficial owners of every Register of

express trust provided to the Authority in accordance with regulation beneficial

owners of trusts.

3 shall be entered and held by the Authority in a register of beneficial

owners kept by the Authority for this purpose.

(2) The information provided by a trustee as required in terms

of regulation 3 shall be deemed to be sufficiently reliable for the

Authority in fulfilment of its duties under these regulations.

(1)

Where there is a change in the beneficial ownership Notice of

of an express trust which generates tax consequences, the trustee change

beneficial

shall, within fourteen days after the date on which the change is owners

annual

recorded by the trustee, notify the Authority of the change, providing declaration,

the information required under regulation 3 on any new beneficial

owner, and the effective date of changes made. The said changes shall

be entered in the register of beneficial owners

Provided that if the change in the beneficial ownership

information relates to a change in trustee, it shall be the duty of the

new trustee to notify the Authority of such change.

(2) A trustee who has submitted a declaration of beneficial

ownership for any trust in terms of regulation 3 or regulation 7 shall,

for every such trust, submit annually thereafter, and by not later than

31 st January of each year, a declaration confirming that there have

been no changes to the beneficial ownership of the trust in the

previous calendar year, other than any changes notified in terms of

sub-regulation (1).

(3) The notice referred to in sub-regulation (1) and the

declaration referred to in sub-regulation (2) shall be signed by the

trustee. Where the trustee is a company, such notice or declaration

shall be signed by at least two directors, and where the trustee is

another body corporate they shall be signed by at least two persons

entrusted with the management and administration thereof.

(1)

The information on the beneficial owners of an

express trust held by the Authority in the register of beneficial owners

shall be accessible to

(a) (i)

national competent authorities with designated

responsibilities for combating money laundering and terrorist

financing;

(ii)

national competent authorities that have the

function of investigating or prosecuting money laundering, associated

criminal offences and terrorist financing, or of tracing, seizing,

freezing and confiscating criminal assets;

(iii)

the Financial Intelligence Analysis Unit;

(iv)

national tax authorities; and

(v)

any other national competent authority within the

meaning assigned to it under the Prevention of Money Laundering

and Funding of Terrorism Regulations, not already covered under

sub-paragraphs (i) to (iv),

in a timely manner without any restriction and without alerting

the beneficial owners concerned; and

(b) subject persons in terms of the Prevention of Money

Laundering and Funding of Terrorism Regulations, for the purpose of

carrying out customer due diligence in accordance with the said

regulations, in a timely manner

Provided that the subject persons mentioned in sub-

regulation (1)(b) may be required to submit to the Authority

(i)

an engagement letter engaging the subject person;

or

(ii)

a power of attorney, licence, warrant or other

evidence of the function of the subject person; or

(iii)

a declaration that the purpose of the enquiry relates

to the duties of the subject person or alternatively the basis of

such request; or

(iv)

any other document which the Authority may deem

necessary.

(2) Access to information on a beneficial owner of a trust

under sub-regulations (1)(b) may not be granted, in full or in part,

where in exceptional circumstances to be justified by means of

documentary evidence and to be determined on a case by case basis,

access to such beneficial ownership information would expose the

beneficial owner to the risk of fraud, kidnapping, blackmail, violence

or intimidation, or where the beneficial owner is a minor or otherwise

incapable.

(3) Subject persons shall not rely exclusively on the register of

beneficial owners to fulfil their customer due diligence obligations in

terms of the Prevention of Money Laundering and Funding of S.L. 373.01

Terrorism Regulations.

(4) The fact that trustees comply with these regulations with

regard to provision of information to the Authority shall not imply

that such trustees do not remain equally obliged to provide any

information requested of them by subject persons taking customer

due diligence measures in accordance with the Prevention of Money Cap. 373.

Laundering Act and applicable regulations, as well as others entitled

to such information under any other relevant legislation, about such

trust and beneficial owners.

(5) The authorities referred to in this regulation and the

Financial Intelligence Analysis Unit may, in pursuance of their

functions in accordance with applicable law, provide information on

beneficial owners accessible to them in terms of this regulation to

competent authorities and to Financial Intelligence Units of other

Member States of the European Union and third countries.

Access to or receipt of information in terms of these Data protection

regulations shall be without prejudice under the applicable data and

confidentiality.

protections laws and rules in relation to the processing of personal

data.

Every trustee authorised or registered in terms of the Act

shall, in respect of every express trust which generates tax

consequences, which was set up and in respect of which the trustee

was so acting prior to the coming into force of these regulations,

submit to the Authority a declaration of beneficial ownership in the

form set out by the Authority within six months of the coming into

force of these regulations.

Where a trustee authorised or registered in terms of the

Act, contravenes or fails to comply with any of the provisions of these

regulations, the Authority may impose an administrative penalty

which may not exceed one hundred and fifty thousand euro

(€150,000)

Provided that a trustee shall not be held liable if it is shown

that the trustee had exercised all due diligence to comply with the

provisions of these regulations and the default was not due to

negligence on the part of the trustee or any of its officers as may be

applicable.

(1)

In accordance with the requirements of Directive

EU/2015/849 of the European Parliament and the Council of 20 th

May 2015, the register of beneficial owners held by the Authority in

accordance with regulation 4 shall be interconnected with the central

registers of Member States via the European Central Platform

established by Article 4a(1) of Directive 2009/101/EC, as amended

by Directive 2012/17/EU.

(2) The information on the beneficial owners of a trust as

defined in regulation 3, held by the Authority in the trust register of

beneficial owners shall be available and accessible through the

system of interconnection of registers mentioned in this regulation.

Any document which is required to be delivered to the

Authority under any of the provisions of these regulations, and any

such delivery and the retention of any such document by the

Authority, may be in such format and by such means including in

electronic form and by electronic communication, within the meaning

of the Electronic Commerce Act, as the Authority may deem

appropriate.

€0.36