Trusts and Trustees Act (Register of Beneficial Owners)

Suppliment tal-Gazzetta tal-Gvern ta’ Malta Nru. 20,350, 20 ta’ Frar, 2020 B 357

L.N. 27 of 2020

TRUSTS AND TRUSTEES ACT

(CAP. 331)

Trusts and Trustees Act (Register of Beneficial Owners)

(Amendment) Regulations, 2020

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 acting on the advice of the Malta Financial Services

Authority, has made the following regulations

(1) The title of these regulations is the Trusts and Citation, scope

Trustees Act (Register of Beneficial Owners) (Amendment) and

commencement.

Regulations, 2020, and these regulations shall be read and construed as

one with the Trusts and Trustees Act (Register of Beneficial Owners) S.L. 331.10.

Regulations, hereinafter referred to as "the principal regulations".

(2) The purpose of these regulations is to transpose the relevant

provisions on beneficial ownership information, and therefore Article

31, 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, in so

far as applicable to trusts and trustees under the Act, as amended by

Directive (EU) 2018/843 of the European Parliament and of the Council

of 30 May 2018, and as may be further amended from time to time.

(3) These regulations shall be deemed to have come into force

on 1st January, 2020.

In sub-regulation (2) of regulation 1 of the principal Amends

regulations, for the words "as applicable to trusts and trustees under regulation

the principal

the Act, and they shall be interpreted and applied accordingly.", regulations.

there shall be substituted the words "as applicable to trusts and

trustees under the Act, as amended by Directive (EU) 2018/843 of

the European Parliament and of the Council of 30 May 2018, and as

may be further amended from time to time.".

Regulation 2 of the principal regulations, shall be amended Amends

regulation 2 of

as follows

the principal

regulations.

(a)

in sub-regulation (1) thereof

(i) in paragraph (e) of the definition "beneficial

owner", for the words "in terms of the terms of the trust

instrument", there shall be substituted the words "in terms

of the trust instrument"; and

(ii) immediately after the definition "material

actions", there shall be added the following new definition

" "Minister" shall have the meaning assigned to

it under the Act;";

(b) sub-regulation (2) thereof, shall be substituted by the

following

"(2) These regulations shall only apply to express

trusts

Provided that, these regulations may also apply

to other types of legal arrangements, other than trusts,

having a structure or functions similar to trusts, as may be

prescribed by the Minister.".

Regulation 3 of the principal regulations, shall be amended

as follows

(a) sub-regulation (1) thereof, shall be substituted by the

following

"(1) A trustee who is authorised or registered in

terms 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. The declaration of beneficial ownership

shall include the information referred to in sub-regulation

(2) on all the beneficial owners of the trust and such

information shall be adequate, accurate and up to date, and

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.";

(b) in sub-paragraph (iii) of sub-regulation (3)

thereof, for the words "within three months of the birth or

marriage;", there shall be substituted the words "within

three months of the notification to the trustee of the birth or

marriage;"; and

(c)

sub-regulation (5) thereof, shall be substituted

by the following

"(5) Where an individual beneficiary has not

yet received any financial payment or been provided

with a non-financial benefit, or the beneficiary may not

be aware of his entitlement under the trust, and

verification of identity may therefore not have been

carried out on the said beneficiary, it shall be sufficient

to provide the identification details which are available

on the trust instrument or on any other written

document by the settlor wherein such beneficiary is

named.".

Immediately after regulation 3 of the principal regulations, Adds new

regulation to the

there shall be added the following

principal

regulations.

"3A. (1) The provisions of regulation 3 shall also

apply to any trustee of a trust whose place of

establishment or residence is outside the European Union,

where such trustee enters into a business relationship, as

defined under article 2 of the Prevention of Money

Laundering and Funding of Terrorism Regulations, or

acquires real estate in Malta, in its capacity as trustee of a

trust.

(2) The trustee of a trust whose place of

establishment or residence is outside the European Union

shall comply with the provisions of regulation 3 within

fourteen days from the date when the business relationship

has been established or the real estate acquired, as the case

may be.".

Regulation 4 of the principal regulations, shall be amended Amends

regulation 4 of

the principal

regulations.

(a) in sub-regulation (1) thereof, for the words "every

express trust provided to the Authority in accordance with

regulation 3", there shall be substituted the words "every express

trust provided to the Authority in accordance with regulation 3 or

regulation 3A".;

(b) sub-regulation (2) thereof, shall be renumbered as

sub-regulation (4) and immediately after sub-regulation (1) there

shall be added the following new sub-regulations

"(2) Where there are co-trustees of a trust who are

established or reside in different Member States of the

European Union, the Authority may consider a certificate

of registration or an excerpt of the beneficial ownership

information held in a register by one Member State as

sufficient proof of having fulfilled the obligations in terms

of regulation 3.

(3) Where a trustee whose place of establishment

or residence is outside the European Union, enters into

multiple business relationships in such trustee’s capacity as

trustee of a trust or person holding an equivalent position in

different Member States of the European Union, the

Authority may consider a certificate of registration or an

excerpt of the beneficial ownership information held in a

register by one Member State as sufficient proof of having

fulfilled the obligations in terms of regulation 3A."; and

(c) in sub-regulation (4), as renumbered, for the words

"The information provided by a trustee as required in terms of

regulation 3", there shall be substituted the words "The

information provided by a trustee as required in terms of

regulation 3 and regulation 3A.".

Regulation 5 of the principal regulations, shall be amended

as follows

(a) in sub-regulation (1) thereof, for the words "Where

there is a change in the beneficial ownership of an express trust

which generates tax consequences, the trustee", there shall be

substituted the words "Where there is a change in the beneficial

ownership of an express trust, the trustee"; and

(b) in sub-regulation (2) thereof, for the words "A trustee

who has submitted a declaration of beneficial ownership for any

trust in terms of regulation 3 or regulation 7", there shall be

substituted the words "A trustee who has submitted a

declaration of beneficial ownership for any trust in terms of

regulation 3 or regulation 8".

Regulation 6 of the principal regulations, shall be amended

as follows

(a)

in paragraph (a) of sub-regulation (1) thereof

(i) for the words "associated criminal offences", in

sub-paragraph (ii) thereof, there shall be substituted the

words, "associated predicate offences";

(ii)

immediately after the words "the Financial

Intelligence Analysis Unit;" in sub-paragraph (iii) thereof,

there shall be added the word "and";

(iii) for the words "national tax authorities; and", in

sub-paragraph (iv) thereof, there shall be substituted the

words "national tax authorities."; and

(iv) sub-paragraph (v) thereof, shall be deleted;

(b)

in paragraph (b) of sub-regulation (1) thereof

(i) in the proviso thereof, for the words "may be

required", there shall be substituted the words "shall be

required";

(ii) in sub-paragraph (i) thereof, for the words "an

engagement letter", there shall be substituted the words "an

executed engagement letter";

(iii) immediately after sub-paragraph (iv) thereof,

there shall be added the following new paragraphs

"(c) any natural or legal person that, upon a

written request made under regulation 6A, can

demonstrate a legitimate interest. For the purposes of

these regulations

(i) a legitimate interest to be granted

access to information on the beneficial

ownership of a trust shall be conclusively

determined, on a case by case basis, by the

Authority

and

shall

be

satisfactorily

demonstrated if the person requesting such

access can prove that the interest specifically

and solely relates to and will contribute to the

prevention, detection and combating of money

laundering or the associated predicate offences

or the financing of terrorism and shall be

justified on the basis of previous activities and a

proven track record of actions in that field, by

means of relevant documentary evidence;

(ii)

Unless prohibited by these

regulations or applicable law, in the event that

the Authority considers that there exists a

legitimate interest to be granted access to

beneficial ownership information, it shall notify

the trustee of its conclusions and the reasons for

its decision and shall grant the trustee at least

ten (10) working days to present any

submissions to it in writing which the trustee

may wish to make.

(iii) After

consideration

of

such

submissions, if any, the Authority shall notify

the applicant and the trustee of its final

decision.

(d) any natural or legal person that submits a

written request to the Authority in relation to a trust

which holds or owns a controlling interest in any

corporate or other legal entity through direct or

indirect ownership, including through bearer

shareholdings, or through control by other means,

other than

(i) in any corporate or other legal

entities referred to in the Companies Act

(Register of Beneficial Owners) Regulations,

the Civil Code (Second Schedule) (Register of

Beneficial Owners-Associations) Regulations,

or the Civil Code (Second Schedule) (Register

of

Beneficial

Owners-Foundations)

Regulations; or

(ii) in any corporate or other legal entity

incorporated within any other Member State of

the European Union.";

(c) sub-regulation (2) thereof, shall be substituted by the

following

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

a trust under sub-regulation (1)(b), (c) and (d) may be

refused by the Authority, 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 following a detailed evaluation of the

exceptional nature of the circumstances, the Authority

considers that access to such beneficial ownership

information would expose the beneficial owner to the risk

of fraud, kidnapping, blackmail, extortion, harassment,

violence or intimidation, or where the beneficial owner is a

minor or otherwise legally incapable

Provided that sub-regulation (2), shall not apply

(a) any legal or natural person carrying out

‘relevant financial business’ as defined in regulation

2(1)(a) to (f) and (h) of the Prevention of Money S.L. 373.01.

Laundering and Funding of Terrorism Regulations;

(b) notaries and other independent legal

professionals, carrying out a ‘relevant activity’ as

defined in regulation 2(1) of the Prevention of Money S.L. 373.01.

Laundering and Funding of Terrorism Regulations, in

their capacity as public officials; and

(c) authorities referred to in regulation

6(1)(a).";

(d) sub-regulation (5) thereof, shall be re-numbered as

sub-regulation (6) and immediately after sub-regulation (4)

thereof, there shall be added the following new sub-regulation

"(5) The access granted by the Authority to the

information on the beneficial owners of a trust to

(a) natural or legal persons who have

satisfactorily demonstrated a legitimate interest in

terms of sub-regulation (1)(c); and

(b) natural or legal persons who have filed a

written request in relation to a trust in terms of sub-

regulation (1)(d),

shall, in respect of each beneficial owner, consist of

(i)

the name and surname,

(ii)

date of birth,

(iii) the nationality,

(iv) the country of residence, and

(v) in the case of a beneficiary, the

nature and extent of the beneficial interest

held."; and

(e) immediately after sub-regulation (6) thereof, as

renumbered, there shall be added the following new sub-

regulation (7)

"(7) Access to the information on the beneficial

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

beneficial owners shall be subject to on-line registration

and to the payment of a fee, to be prescribed in a legal

notice issued by the Minister, for every access request in

respect of the information on the beneficial owners of each

trust

Provided that access to the provision of

information on beneficial owners of trusts by national

competent authorities and the Financial Intelligence

Analysis Unit as identified in regulation 6(1)(a) shall not be

subject to the payment of a fee.".

Immediately after regulation 6 of the principal regulations,

there shall be added the following

6A. (1) The Authority shall receive requests for

access to the beneficial ownership information based on a

legitimate interest in terms of regulation 6(1)(c) in writing

and shall, in a timely manner from the date of receiving

such request, notify the applicant of the Authority’s

interest and the

decision taken decision, following an evaluation to determine whether the

applicant requesting access to the register of beneficial

ownership information satisfactorily demonstrates and

justifies to the Authority a legitimate interest in terms of

regulation 6(1)(c).

(2) In determining and arriving at a decision

whether the applicant has a legitimate interest, the

Authority may request any information or any relevant

documentary evidence it deems necessary, and may seek

guidance from or consult with any person, authority or

other body as may be deemed necessary.

(3) The Authority may, but shall not be obliged to,

notify the trustee of the request made for access to the

beneficial ownership information of a particular trust

administered by that particular trustee. The Authority may

request from the trustee any pertinent information required

by the Authority in order to assess and process the request.

6B. (1) (a) An applicant who feels aggrieved by

Appeal from a

decision of the

a decision of the Authority denying access, in full or in part,

denying access

to the register to the beneficial ownership information requested on the

basis of legitimate interest, in terms of regulation 6A, may

appeal to the Court of Appeal (Inferior Jurisdiction)

(hereinafter referred to as "the Court") by means of an

application filed in the registry of that court within twenty

days from the date on which the Authority’s decision has

been notified to such person.

(b) the appeal application shall be made

in writing clearly explaining the grounds for such appeal

and filed against the Authority, which shall have twenty

days from the date of service within which to file a reply

Provided that, if the appellant fails to

notify the appeal application to the Authority within

twenty days of the filing of the appeal, the Court, after

hearing during the first sitting of the appeal the reasons

why service was not affected, may declare by means of a

decree delivered in Court that the appeal is deserted with

expenses to be borne by the appellant.

(c) the Court shall set down the cause for

hearing to a date no later than two months from when the

date on which the appeal is brought before it and shall cause

notice of such date to be given to the parties to the suit.

(d) after appointing the application for

hearing, and after listening to oral or written submissions,

as the case may be, made by the parties and any evidence

that they may be authorised to submit, the Court shall

decide the application on its merits, within the shortest time

possible but not later than four months from the day when

the application has been appointed for hearing.

(e) if the Court decides in favour of the

appellant, the Court shall, in its decision, indicate the time

frame within which the appellant is to be granted access to

the beneficial ownership information requested in terms of

regulation 6(1)(c).

(f) if, during the hearing of the appeal,

the Court finds that the application is frivolous and

vexatious, the Court may decide to impose on the applicant,

a penalty, to be paid to the Authority, of between one

thousand euro (€ 1,000) and five thousand euro (€5,000), as

the Court shall determine.

(g) the Court vacations provided for in

the Court Practice and Procedure and Good Order Rules

shall not suspend the hearing of the appeals filed in terms of

these regulations

Provided that for the purposes of this

regulation, the Court may, for reasons deemed serious and

necessary by the Court, by means of a decree, extend for a

reasonable period, the judicial time limits that are imposed

on it according to these regulations.

(2) The persons referred to under regulation 6(1)

(b), (c) and (d) who are aggrieved by a decision of the

Authority denying access to the beneficial ownership

information, in full or in part, on the basis that access to

such beneficial ownership information would expose the

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

extortion, harassment, violence or intimidation, or where

the beneficial owner is a minor or otherwise legally

incapable, in terms of regulation 6(2), may appeal against

such decision to the Court of Appeal (Inferior Jurisdiction),

under the same terms and conditions indicated in sub-

regulation (1) and, accordingly, the provisions of sub-

regulation (1) shall apply mutatis mutandis.

(3) (a) Proceedings

in

relation

to

the

determination of a legitimate interest under this regulation

shall be held in camera and only the appellant and other

parties who can prove they have an interest in the

proceedings to the satisfaction of the Court, and their

respective advocates and legal procurators shall be allowed

in Court during the hearings;

(b) Any decree or decision of the Court shall

preserve the confidentiality of the proceedings and shall

only reveal such facts as may be necessary to make the

same intelligible and enforceable by the parties;

(c) All applications, responses, affidavits,

statements and other documents or evidence shall be kept

by the Registrar of the Court in a confidential manner and

no access shall be given thereto except with the written

consent of the Court.

6C. (1) Where the Authority has reasonable cause

Inaccuracies or

to believe that the beneficial ownership information

available in the submitted in respect of a trust may not be accurate and

updated, the Authority may make enquiries with the trustee

or carry out any other action in terms of its powers granted

to it under the Act, in order to establish the current

beneficial ownership.

(2) Where a national competent authority and, or

the Financial Intelligence Analysis Unit referred to in

regulation 6(1)(a), if appropriate, and to the extent that this

requirement does not interfere unnecessarily with its

functions, as well as any person referred to in regulation

6(1)(b), becomes aware of any discrepancies between the

beneficial ownership information available in the register

referred to in regulation 4 and the beneficial ownership

information available to them, they shall report such

discrepancies to the Authority.

(3) Where discrepancies are reported and

communicated to the Authority in terms of sub-regulation

(2), the Authority shall take any appropriate actions in order

to resolve such discrepancies in a timely manner. Until such

time as the discrepancies are rectified, any reference to such

discrepancies may be included in the register referred to in

regulation 4.".

In regulation 7 of the principal regulations, for the word Amends

"under", there shall be substituted the word "to".

Regulation 8 of the principal regulations, shall be Amends

substituted by the following

" Applicability

8. Every trustee authorised or registered in terms

of the Act shall, with regard to every express trust in respect

of which the trustee was so acting prior to the coming into

force of the Trusts and Trustees Act (Register of Beneficial

2020. Owners) (Amendment) Regulations 2020, submit to the

Authority a declaration of beneficial ownership within six

months of the coming into force of the said regulations

Provided that the above six month transitory

period shall not apply to any trustee of a trust who was

already required to submit a declaration of beneficial

ownership in terms of the requirements set out in these

regulations prior to 1 January 2020.".

Immediately after regulation 10

of

the

principal Adds new

regulations, there shall be added the following

10A. The information held in the Authority’s register

information on of beneficial owners of a trust under regulation 4 shall be

register shall available through such register for at least ten years after

the grounds for registering the beneficial ownership

information have ceased to exist.".

€0.54