Chapter 233 – External Transactions Act

EXTERNAL TRANSACTIONS

CHAPTER 233

EXTERNAL TRANSACTIONS ACT To establish a framework for the liberalisation of external transactions and to provide for the collection of related information.

Substituted by:

IX. 2003.30.

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 and Act IX of 2025.

PART I

PRELIMINARY

Art. 1

The short title of this Act is the External Transactions Act.

Art. 2

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. (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; "Central Bank" means the Central Bank of Malta 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 EXTERNAL TRANSACTIONS 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; "eligible asset" means deposits as defined in the Banking Act, securities including shares and stock in the capital of a company, debentures, certificates of deposit, bonds, notes and any other instrument acknowledging indebtedness, units in a collective investment scheme, life and annuity long term insurance policies, whether index-linked or not, precious metal, bullion, warrants, options, futures and other derivatives as well as any other financial instruments entered into for investment purposes, and also includes any other asset as may be determined from time to time by the Minister by notice in the Gazette; "European Union" means the European Union referred to in the Treaty; "ext ernal t ransaction s" includ es b oth cap ital an d current transactions involving operations between resident and nonresident persons or other entities, whether in or outside Malta, and may also include operations involving foreign exchange by a resident or between residents; " foreign exchange " m eans any note, coin, cheque , draft, travellers’ cheque, letter of credit, promissory note, bill 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 foreign 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 e m b e r St a t e " m e a n s a s t a t e w h i c h i s a m em b e r o f t h e 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 particular, negotiable and other securities and instruments, whether denominated in euro or foreign currency; "National Statistics Office" means the National Statistics Office 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 EXTERNAL TRANSACTIONS any discretion may be exercised in favour of any nonresident; "payment" means (a) any event which, wholly or in part, extinguishes a debt of a sum of money between a resident and a nonresident 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.

EXTERNAL TRANSACTIONS

PART II

LIBERALISATION AND SAFEGUARD MEASURES Liberalisation.

Substituted by:

IX. 2003.33.

Art. 3

Unless otherwise specified by means of regulations or orders issued by the Minister under articles 4 and 5 all external transactions and related payments may be carried out without restriction.

Restrictions in exceptional circumstances.

Substituted by:

IX. 2003.33.

Art. 4

Provided that such restrictions shall not be imposed in relation to a Member State.

Sanctions.

Substituted by:

IX. 2003.33.

Art. 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 Treaty or otherwise unilaterally to defend Malta’s national interests.

PART III

COLLECTION OF INFORMATION AND ACCESS TO RECORDS Request for information.

Substituted by:

IX. 2003.33.

Art. 6

Without prejudice to any other provision of this Act, the M i n i st er m a y r e q u i r e a n y p e rs o n i n M a l t a t o p r o v i d e s u c h information and, or clarification as the Minister may consider necessary for the purpose of ensuring compliance with any regulations made under Part II of this Act.

Declaration of import and export of currency.

Substituted by:

IX. 2003.33;

III. 2004.110.

Amended by:

L.N. 411 of 2007.

Art. 7

The Minister may by regulations require any person to declare to the Comptroller of Customs the import or export by such person of banknotes and coins denominated in euro and, or in foreign currencies, and, or foreign exchange, and, or monetary instruments, and, or precious metals, and, or precious stones into or from Malta in such amounts as may be specified in such regulations and to disclose such other information as may be prescribed in such EXTERNAL TRANSACTIONS regulations regarding such import or export.

Art. 8

Without prejudice to the previous provisions of this Act, the Minister may after consultation with the Central Bank and the National Statistics Office by regulations require any person within such time and in such manner as may be prescribed to furnish the Minister such information, return or other detail relating to external transactions as may be required to collect, compile and disseminate statistical information on external transactions.

Statistical information.

Substituted by:

IX. 2003.33.

Art. 9

Non-dissemination of information.

Substituted by:

IX. 2003.33.

Amended by:

II. 2005.16.

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.

Art. 10

Offences and penalties.

Substituted by:

IX. 2003.33.

Amended by:

III. 2004.111;

L.N. 411 of 2007;

IX.2025.18 (b) for the forfeiture of any monies, wholly or partially, 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 EXTERNAL TRANSACTIONS Services Authority Act or such other body as may be prescribed.

Offences.

Amended by:

II. 2002.35;

IX. 2003.34;

III. 2004.112.

Art. 11