Restrictions on external transactions lifted

The Minister of Finance has lifted all remaining restrictions on external transactions except for the following, which will remain in force in respect of transactions with residents of third countries, that is non-EEA countries (EEA countries include all member states of the European Union and Iceland, Liechtenstein and Norway as provided in the European Economic Area Enlargement Treaty Order, 2004):

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.

The 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.

The Central Bank drew the attention of the public to reporting obligations under the External Transactions Act. As stipulated by section 8 of the law, 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 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.