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Maltese Laws |
EXTERNAL TRANSACTIONS ACT
To establish a framework for the liberalisation of external transactions and to provide for the collection of related information.
29th December, 1972;
1st February, 1973
ACT XLIX of 1972, as amended by Acts XXIV of 1973 and LVIII of 1974; Legal Notice No. 148 of 1975; Acts XXII of 1976, XXXI of 1981, XIII of
1983, II of 2002, IX of 2003, III and XIII of 2004, II of 2005 and I of 2007;
and Legal Notice 411 of 2007.
PART I
PRELIMINARY
"capital transactions" means external transactions arising from the transfer or movement of capital and includes:
(a) transfers of immovable property; (b) direct investments;
(c) the issue, sale or purchase of securities including shares and stock in the capital of a company, debentures,
certificates of deposit and any other similar instrument acknowledging indebtedness;
(d) the issue, sale or purchase of units in a collective investment scheme, life and annuity long-term insurance
policies whether index-linked or not;
(e) lending, borrowing and payment or receipt of amortisation on loans;
(f) granting of guarantees or any other form of security for payment;
(g) warrants, options, futures and other derivatives as well as any other financial instrument entered into for investment
purposes;
(h) deposits with credit institutions; (i) gifts and endowments; and
(j) any other type of transaction which the Minister may, after consultation with the Central Bank, determine by notice in the Gazette;
"Centr al Bank" m eans the Central Bank of Malt a established under the Central Bank of Malta Act;
"current transactions" means external transactions arising from current flows and include:
(a) foreign trade in goods and services including interest
Substituted by: IX. 2003.30.
Short title. Amended by: IX. 2003.32.
Interpretation. Amended by: II. 2002.34. Substituted by: XI. 2003.33. Amended by: III. 2004.109; XIII. 2004.59; I. 2007.52;
L.N. 411 of 2007.
Cap. 204.
payments, dividend, royalties, reinvested earnings and distributed profits;
(b) other current business payments arising from services, short-term banking and credit facilities; and
(c) remittance for family living expenses;
Cap. 371. "eligible asset" means deposits as defined in the Banking Act, securities including shares and stock in the capital of a company, debent ures, certificates o f depos it, bond s, notes and any
other inst rument ack now ledg ing in debt ed ness, uni ts i n a col l ectiv e investment scheme, life and annuity long term insurance
policies, wh et her in dex-li nked or not, preci ous metal, bul lion, warr ants, options, futures and other derivatives as well
as any other financial instruments entered into for investment purposes, and also includes an y o ther asset as m ay b e d eterm
in ed fr om ti me to ti me by the Minister by notice in the Gazette;
"European Union" means the European Union referred to in the
Treaty;
"ext ernal t r ansaction s " includ es b o th cap ital an d current transactio ns inv o lv ing operat i ons b e t w een
resid e nt and n on- resident persons or other entities, whether in or outside Malta, and may also in cl ud e operati on s in vol
vi ng forei gn ex ch ange b y a resident or between residents;
" f oreign exchange " means an y note, coin, cheque , draft, t r avell e rs’ cheque, l e t t er of credi t , promi s so
ry note, bi ll of exchange, voucher, credit or debit card or other card or means in which value is inputted through electronic or
magnetic methods and which any unspecified person is able to use for payment in lieu of currency, or other means of payment expressed
in the currency of any country which is not legal tender in Malta and references in this Act to fore ign exchange include references
to any right to receive on demand foreign exchange in respect of any credit or balance at any credit institution anywhere;
" M em ber S t ate " mea n s a s t ate which is a m e m b er of the
European Union;
"Minister" means the Minister responsible for finance;
"monetary instruments" includes cheques, drafts or travellers’ cheques, any anonymous or bearer certificates of a financial
or monetary nature which are convertible into cash, irrespective of the issuer, and in parti c ular, negotiabl e and other securities
and instruments, whether denominated in euro or foreign currency;
"National Statistics Office" means the National Statistics Office
Cap. 422.
established under the Malta Statistics Authority Act;
"non-resident" means:
(a) any person, body corporate or other entity which is not a resident;
(b) any resident trustee in terms of a trust where any of the beneficiaries are non-resident and in the case of a discretionary
trust, where the power of appointment or
any discretion may be exercised in favour of any non- resident;
"payment" means -
(a) any event which, wholly or in part, extinguishes a debt of a sum of money between a resident and a non- resident in
connection with an external transaction;
(b) any transfer of funds, on account or in cash, between Malta and a foreign country carried out by a resident who transfers funds
to or repatriates funds from his account held by him abroad;
(c) any transfer of funds on an account or in cash between Malta and a foreign country for which the principal and the beneficiary
are both residents;
(d) any transfer of funds in foreign exchange carried out in
Malta between residents;
"resident" means:
(a) any natural person regardless of nationality whose centre of economic interest is ordinarily in Malta and who has resided
in or has the intention to reside in Malta for a continuous period of one year;
(b) any body corporate incorporated in or under the laws of Malta or of a Member State, or any entity which operates from or is otherwise
registered in Malta or in a Member State;
(c) any trustee in terms of a trust whose place of residence is ordinarily outside Malta or any Member State but where all the beneficiaries
of the trust are determined and are residents and in case of a discretionary trust where the power of appointment or any discretion
may be exercised only in favour of residents;
"the Treaty" has the same meaning assigned to it by the European
Union Act.
(2) The Minister may appoint the Central Bank to act as agent for the said Minister for any one or more of the purposes of this
Act, but any such appointment shall be without prejudice to the exercise of any such power by the Minister.
(3) For such time as the Central Bank is appointed as agent for the Minister under subarticle (2), the references in this Act to
the Minister shall, to the extent and subject to the terms and conditions of such appointm ent, be deemed to incl ude references
to t h e Cent ral Bank . N o t i ce of any su ch appointment, and of any revocation of, or change in th e terms and conditions of
such appointment, shall be published in the Gazette.
Cap. 460.
PART II
Liberalisation. Substituted by: IX. 2003.33.
LIBERALISATION AND SAFEGUARD MEASURES
Restrictions in exceptional circumstances. Substituted by: IX. 2003.33.
Provided that such restrictions shall not be imposed in relation to a Member State.
(2) For the purposes of subarticle (1), exceptional circumstances shall be deemed to exist, where the Minister
acting upon the recommendation of the Central Bank, declares that:
(a) there is a sudden crisis in Malta’s balance of payments;
or
(b) movements of capital to or from Malta cause or threaten to cause serious difficulties for the stability of the financial
system.
(3) Regulations made under subarticle (1) shall be revoked by the Minister without delay as soon as the grounds which gave rise
to such restrictions cease to exist and, in any case, shall not remain in effect for a period exceeding six months.
Sanctions. Substituted by: IX. 2003.33. Cap. 365.
Request for information. Substituted by: IX. 2003.33.
Declaration of import and export of currency. Substituted by:
IX. 2003.33; III. 2004.110.
Amended by:
L.N. 411 of 2007.
5. The provisions of articles 4 and 5 are without prejudice to the powers granted by the National Interest (Enabling Powers) Act to impose controls or restrictions on capital or other transactions or related payments in respect of any state, person or group of
persons whether arising from Malta’s international obligations under the United Nations Charter, the Tr eaty or otherwise unilaterally
to defend Malta’s national interests.
PART III
COLLECTION OF INFORMATION AND ACCESS TO RECORDS
regulations regarding such import or export.
(2) Notwithstanding the provision of subarticle (1), the Minister may disclose any information provided or obtained
under this Act, even where this relates to an identifiable person to any body or authority in Malta responsible for the collection
of any tax, and may likewise, on the basis of any agreement with other states which provide for the reciprocal exchange of such information
disclose information to similar bodies or authorities in the states:
Provided that:
(a) the bodies or authorities to whom the information is disclosed are subject to obligations of secrecy which are equivalent to
those applying under the law of Malta; and
(b) an undertaking is obtained from such bodies or authorities that the information provided will only be used for the
purposes for which it was requested and will be kept confidential and will not be communicated to anyone who is not employed by
the authorities and who is not subject to a similar duty of secrecy in respect of the said information.
Statistical information. Substituted by: IX. 2003.33.
Non-dissemination of information. Substituted by:
IX. 2003.33. Amended by:
II. 2005.16.
(a) that any person who contravenes any provisions thereof shall be guilty of an offence and shall be liable on conviction
to a fine (multa) of not more than forty- six thousand and five hundred and eighty-seven euro and forty-seven cents (46,587.47);
(b) for the forfeiture of any monies, monetary instruments or other things not declared in terms of any regulations made under article
7;
(c) for administrative penalties in lieu of criminal proceedings, the procedures therefor as well as for procedures
for bringing appeals from decisions in connection therewith to the Financial Services Tribunal within such period
and under such conditions as established under article 21 of the Malta Financial
Offences and penalties. Substituted by: IX. 2003.33. Amended by: III. 2004.111;
L.N. 411 of 2007.
Cap. 330.
Services Authority Act or such other body as may be prescribed.
(2) No criminal proceedings for any offence under such regulations may be commenced without the consent of the Attorney
General.
Offences. Amended by: II. 2002.35; IX. 2003.34; III. 2004.112.
Cap. 123.
(2) The Minister may, by regulations under this subarticle, make schemes for the registration of eligible assets and upon
the registration of such eligible assets in accordance with such scheme, the provisions of subarticle (1) shall apply and the eligible
assets so reg i ste r e d m a y c o n t in ue t o b e ret a in ed as pri o r to th e da te o f registration without the need to obtain
such permits or to comply wit h su ch req u ir ement s un der t h i s or an y oth e r law as may b e prescribed.
(3) (a) Any scheme made by the Minister in accordance with sub a rticle ( 2 ) may i m po se such co nditi ons as may appea r to the Minister
to the appropriate and may, without prejudice to the generality of the foregoing, include -
(i) the payment of such fee as may be established in the scheme not being a fee more onerous than the tax that would otherwise
be payable under the relevant laws;
(ii) the manner in which such fee shall be paid and recorded;
(iii) the manner in which registration shall be made and recorded; and
(iv) such circumstances under which any asset may not be registered.
(b) For the purposes of paragraph (a), the term "relevant laws" has the same meaning assigned to it in article 9B of the Income Tax Act.
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