Insights

By virtue of Legal Notice 464 of 2014 a slight but important amendment was made to the definition of ‘relevant activity’, and, as a result, to the list of persons deemed to be subject persons for the purposes of AML-CFT legislation in Malta when carrying out a relevant activity (as distinct from a ‘relevant financial business’).

Specifically, prior to their amendment, the definition caught “any person providing trustee or any other fiduciary service, whether authorised or otherwise, in terms of the Trusts and Trustees Act”, thereby also catching private trustees who are not required to obtain MFSA authorisation in terms of article 43A of the Trusts and Trustees Act (“TTA”) seeing that they

(i) are not remunerated, even indirectly, except as permitted by any rules issued by the MFSA;

(ii) do not hold themselves out as a trustee to the public, and

(iii) do not act habitually as trustee, in any case in relation to more than five settlors at any time.

Following its amendment a new exception was added to paragraph (f) of the definition of ‘relevant activity’ excluding “persons acting as trustees in terms of article 43A of the said Act.”

This is consistent with the non-professional and non-sophisticated nature of the private trustee who, after all, only accepts to act as trustee in isolated cases, and without receiving remuneration, because:

• he is either related to the settlor, by consanguinity or affinity (in the direct line up to any degree or in the collateral line up to the fourth degree inclusively), or
• he has known the settlor for at least ten years,

and one can hardly expect the same level of techncial knowledge in such matters as one can expect of a professional trustee (who remains subject to the relevant AML-CFT regime as a subject person for the purposes of AML-CFT).