The Maltese legislator has recently implemented the provisions of the ‘4th Anti-Money Laundering Directive’ (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 of terrorist financing) relating to information about the beneficial owners of companies, trusts, foundations and associations established within the Laws of Malta. Most of the changes came into force on 1st January 2018, and some will come into force on 1st April 2018.
The amendments introduce new obligations on the abovementioned organisations to:
- Set up and maintain a detailed register of their ultimate beneficial owner/s (UBOs);
- Submit forms to the relevant authority with information on the UBOs when registering a new company, trust, foundation or association,
- Notify the relevant authority in case of any changes in UBOs;
The term UBO refers to persons having ownership or control of the organisation:
a) In the case of companies (which includes partnerships) through ownership of over 25% of the shares or voting rights, or through control via other means;
b) In the case of trusts, the UBO shall be the settlor, the trustee/s, the protector, the beneficiaries/ class of beneficiaries, and any other natural person exercising control;
c) In the case of foundations, the natural person/s holding equivalent or similar positions to (b) above including the founder, the administrator/s, the protector, and the beneficiaries;
d) In the case of associations, the natural person/s holding equivalent or similar positions to (b) above including the administrators and the protector.
Failure to abide by these obligations will expose the organisations and potentially the officers in charge to liabilities and penalties. The penalties range from monetary payments, to fines and imprisonment.
With respect to companies, these obligations are applicable to all companies except those listed on the regulated market, and those wherein all shareholders are natural persons whose identity is disclosed in the public records of the Registry of Companies (ROC). Otherwise, all existing companies have to maintain a record of their UBOs, and this must be submitted yearly to the ROC within 42 days of its anniversary from registration. This new obligation will commence as from 30th June 2018.
Companies must also submit such updated records within 14 days from any change in UBOs, such as a transfer/transmission of shares, an increase/reduction in capital, a restructuring of the company’s share capital or changes in the voting rights. As from 1st January 2018, when a new company is being registered, it also has to submit a register of UBOs to the ROC.
Similar obligations exist on trusts, foundations and associations to maintain a register of their UBOs and submit any changes thereto to the MFSA or the Registrar for Legal Persons, accordingly.
The registers submitted to the relevant authorities will be accessible by national competent authorities and also by persons subject to AML obligations for the purposes of carrying out customer due diligence.
How can ECOVIS help you?
If you are an organisation wishing to know more about your obligations following these legal amendments, please contact ECOVIS Malta on firstname.lastname@example.org.
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