The Malta Financial Services Authority (“MFSA”) has recently published a Notice drawing the attention of trustees duly authorised or registered in terms of Article 43 or Article 43B of the Trusts and Trustees Act with regards to the amendments made to the Trusts and Trustees Act (Register of Beneficial Owners) Regulations 2017 (the “Regulations”) by virtue of Legal Notice 27 of 2020, which was published on 20 February 2020.
The amendments are aimed at transposing the provisions of Article 31 of Directive (EU) 2018/843 of the European Parliament and of the Council on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (the “5th AMLD”). These amendments have entered into force retrospectively, with effect from 1st January 2020.
Notably, the amendments require trustees to submit a declaration of beneficial ownership to the MFSA with respect to every trust under their administration, irrespective of whether the trust generates tax consequences or otherwise.
Additionally, as these amendments apply retrospectively, trustees are required to submit the relevant declarations of beneficial ownership even for trusts set up prior to the amendments. These declarations shall be submitted within six months from the coming into force of these amendments. These reporting requirements are also applicable to any trustee of a trust whose place of establishment is outside the European Union where such trustee enters into a business relationship, or acquires real estate in Malta in its capacity as a trustee.
The amendments have also extended the access rights to information on trusts to any natural or legal person who, upon a written request, can demonstrate a legitimate interest. Additionally, any natural or legal person may submit a written request to the MFSA in relation to a trust which holds or owns a controlling interest in any corporate or other legal entity. The existence of a legitimate interest is determined on a case-by-case basis by the MFSA which takes in consideration whether the request for access specifically and solely relates to the prevention, detection and combating of money laundering or the financing of terrorism. An appeal mechanism to the Court of Appeal is also available for applicants who feel aggrieved by a decision of the MFSA in denying access.
Feel free to contact us if you require any further information regarding the Trusts and Trustees Act.