The Central Bank of Malta announced last week that as of April 19, the Minister of Finance has lifted all remaining restrictions on external transactions with the exception of those relating to third countries which are not members of the European Economic Area.
The Central Bank added the following information in a statement:
Contracts with non-resident life insurance companies:
Residents are not permitted to enter into contracts of long-term assurance with non-resident insurance undertakings other than those non-resident insurance undertakings with a head office in an EU or EEA Member State or with a branch of a third country insurance undertaking established in an EEA country.
Issue, acquisition, sale and redemption of securities not listed on the Malta Stock Exchange and registered in Malta.
Applications by non-residents of a non-EEA country for the issue, acquisition, sale and redemption of securities not listed on the Malta Stock Exchange in local companies established, or to be established, in Malta have to be cleared by the Registrar of Companies of the Malta Financial Services Authority. Such a procedure does not apply to international companies as defined in Article 2 of the Income Tax Act (Cap. 123), and to companies which own a vessel registered under the Merchant Shipping Act (Cap. 234), and where the resident participation does not exceed 20 per cent.Reporting obligations:
The Central Bank of Malta would also like to draw the attention of the public to reporting obligations under the External Transactions Act. As stipulated by Section 8 of the Act, all persons effecting external transactions are obliged to provide details of such transactions on the relevant reporting forms, which will be provided by institutions licensed to carry on the business of foreign exchange at the time of payment. These details are required by the Central Bank of Malta for monitoring and statistical purposes.
On their part, institutions licensed to carry on the business of foreign exchange will be expected to maintain proper records of all such transactions and submit regular returns as requested by the Bank. The procedures to be followed in implementing the restrictions described above will be elaborated upon further in circulars to be issued to these institutions by the Bank.
The public is also reminded that in terms of Section 39 of the Central Bank of Malta Act, the Maltese lira is the only legal tender currency in Malta and is thus the recognised unit of exchange for effecting payments locally. This will continue to be the position until Malta adopts the euro as its currency. Such an event, however, cannot take place until the European Central Bank (ECB) is ready to admit new members to the euro area from January 2007, and then on condition that the countries involved fulfill a number of economic and financial conditions. Thus, while with immediate effect the public is permitted to hold all types of financial assets in foreign currencies and without limit, such holdings will be considered to be foreign exchange holdings and their value in Maltese liri will remain subject to the normal exchange rate fluctuations as at present.
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