Trusts and Trustees Act (Cap. 331), article 58

58. (1) Subject to the provisions of the T r u s t s a n d T r u s t e e s (Amendment) Act, 2014 , trustees and providers of other fiduciary services in possession of an authorisation before the date of c oming into force of the amendments contained in the Act above- mentioned shall take all necessary measures to comply with the provisions of articles 43(4)(i)(e), 43(4)(ii)( e), 43(13)(i)( e), 43(13)(ii)( d) and article 43C within six months from the said date. (2) Trustees in possession of an authorisation prior to the coming into force of the amendments contained in the Act above- mentioned shall comply with the provisions of articles 43(4)(i) (d), 43(4)(ii)( d) within two years from the said date. (3) Mandatories in possession of an authorisation prior to the coming into force of the amendments contained in the Act above- mentioned shall comply with the provisions of article 43(13)(i) (d) and article 43(13)(ii)( c), within two years from said date. Transitory provisions - Act XIII of 2004 : Transitory provisions. 35. (1) The following provisions in this Part shall apply in relation to registered trusts, trustees of unregistered trusts, licensed nominees and nominee companies as referred to in the principal Act (Cap. 331) as in force immediately before the coming into force of this Part and the Malta Financial Services Centre Act as retained in force by Act XVII of 2002 (hereinafter referred to as "the applicable law"). Registered trusts.(2) Upon the coming into force of this Part no further trusts shall be registered in terms of the principal Act as in force immediately before the coming into force of this Part. (3) All trusts registered prior t o the coming into force of this Part shall continue to be regulated by the principal Act as in force immediately before the coming into force of this Part for a maximum period of ten years from the date of their registration and they shall continue to enjoy the rights and exemptions and othe r privileges due as provided by the principal Act as in force immediately before the coming into force of this Part. (4) A trustee of a registered trust in relation to which the per iod of ten years has expired prior to the coming into force of this Part shall amend the trust deed in co nsultation with the settlor, an y protector or other interested pa rties so as to achieve complian ce with the principal Act as amended by this Part within a maximum period of two years from the coming into force of this Part. (5) A trustee of a registered trust in relation to which the sai d period of ten years is due to expire on or after the coming int o force of this Part shall amend the trust deed in consultation with th e settlor, any protector or other interested party so as to achie ve compliance with the principal Act as amended by this Part withi n a maximum period of two years from the expiry of the said period of ten years. 62 CAP. 331.] TRUSTS AND TRUSTEES (6) Notwithstanding the provisions of subarticles (4) and (5), a trustee of a registered trust may at any time prior to the laps e of said period of ten years amend the trust deed as aforesaid to achieve compliance with the princ ipal Act as amended by this Pa rt and such amendment shall imply a waiver of all rights and exemptions and other privileges contemplated by the provisions of the principal Act as in force immediately before the coming int o force of this Part. Trustees of unregistered trusts. (7) The trustee of any trust, oth er than a registered trust, whi ch is in existence on the date of the coming into f orce of this Pa rt, and to which the provisions of article 43(1) of the principal Act a s amended by this Part applies, shall, within two years of such d ate, do all such acts as may be necessa ry to comply with the provisi ons of the principal Act including: (a) applying for and obtaining authorisation as a trustee in terms of article 43 of the principal Act as amended by this Part; or (b) making the relevant declarations and preparing such inventory of trust assets as required by article 43A of the principal Act as a mended by this Part; or (c) notifying the Authority of his activities to the extent necessary; or (d) cease to act as a trustee in Malta unless he obtains authorisation as required by the principal Act as amended by this Part. ( 8 ) N o t h i n g v a l i d l y d o n e i n r e l a t i o n t o a t r u s t p r i o r t o t h e coming into effect of this Part shall be affected hereby and no action carried out prior to the coming into force of this Part and, without prejudice to any trust regulated by a foreign law and t he provisions of the Recognition of Trusts Act, no relationship in existence prior to the coming into force of this Part shall be treated as a trust relationship unless it unambiguously appears from th e relationship that it was intended to create a trust relationshi p. Licensed nominees. (9) On the coming into force of t his Part, no further licences t o act as a licensed nominee shall be issued in terms of the appli cable law and all existing valid licences issued up to such date shal l expire upon the lapse of two years from the coming into force o f this Part. (10) (a) Upon the lapse of six months from the coming into force of this Part and until the expiry date referred to in subarticle (9), no licensed nominee shall undertake any new nominee activities and licensed nominees shall only continue to service existing arrangements. (b) A licensed nominee shall, prior to the lapse of two years from the coming into force of this Part - (i) either apply for authorisation under article 43 of the principal Act as amended by this Part; (ii) or cease its bu siness activities: Provided that if such licensed nominee does not obtain TRUSTS AND TRUSTEES [CAP. 331. 63 authorisation to act as a tr ustee under article 43, such licensed nominee shall be obliged to ensure that all rights of property held under trusts or other arrangements are transferred in the form required by law to a person who is duly authorised to act as trustee in terms of article 43 or that the provisions of article 43A are fully complied with, as the case may be. (11) Notwithstanding any limitation in any memorandum and articles of association of any li censed nominee company in term s of the applicable law, any such company may at any time apply for and may be granted authorisation to act as a trustee in terms o f the principal Act as amended by this Part. (12) Upon the issue, in terms of article 43 of the principal Act as amended by this Part, of authorisation to any such company to a ct as a trustee in terms of article 43 of the said Act, any licenc e issued pursuant to the applicable law s hall expire and be cancelled an d shall be surrendered to the Authority. Nominee companies. (13) Upon the coming into force of this Part no further warrants to act as a nominee company shall be issued in terms of the applicable law. (14) (a) Where upon the coming into force of this Part, a nominee company is solely performing the functions of liquidator of offshore companies, it shall immediately submit its warrant to the Authority for modification and such warrant shall continue to be renewed only in relation to the functions of liquidator and until such time as the nominee company completes the winding up of such offshore companies, whereupon the nominee company shall immediately surrender its modified warrant to the Authorit y for cancellation. (b) A nominee company solely performing the functions of liquidator as aforesaid shal l not act as trustee in any manner and shall not be entitled to apply for authorisation to act as trustee in terms of the principal Act as amended by this Part. (15) (a) Where upon the coming into force of this Part, a nominee company is solely performing the functions of trustee of registered trusts, the warrant of such nominee company shall be renewable for a maximum period of two years from the coming into force of this Part and such nominee company shall, during the said period, continue to be regulat ed by the prin cipal Act as in force prior to the coming into force of this Part and by the relevant provisions of the applicable law. (b) A nominee company solely performing the functions of trustee as aforesaid shall, prior to the lapse of the period of two years from the coming into force of this Part: (i) either apply for authorisation to act as trustee under article 43 of the p rincipal Act as amended 64 CAP. 331.] TRUSTS AND TRUSTEES by this Part, (ii) or cease to act as trustee: Provided that where such nominee company does not obtain authorisation to act as trustee under article 43, it shall be bound to ensure that all the rights of property under trusts and all other arrangements are transferred in the form required by law to a person authorised to act as trustee in terms of article 43 or that the provisions of article 43A are fully complied with, as the case may be. (16) Where upon the coming into force of this Part, a nominee company is performing both the functions of liquidator of offsh ore companies and also the functions of trustee of registered trust s, the provisions of subarticle (12) shall mutatis mutandis apply to such nominee company in respect of it s functions of trustee and the provisions of subarticle (11)( a) shall mutatis mutandis apply to such nominee company in respect of its functions of liquidator, and the modification of its warrant as provided for in subarticle ( 11)(a) shall be required only in respect of any period following the l apse of two years from the coming into force of this Part, during wh ich the nominee company continues to act as liquidator of offshore companies. (17) The Authority shall have the power to require such changes to the memorandum and articles o f association of any licensed nominee or any nominee company applying for authorisation, including a change in name to the extent considered necessary, so as to more suitably reflect its status, provided that any such changes shall not affect the authorisation of the company to act as a trustee in terms of the principal Act as amended by this Part o r the functions as liquidator of a nom inee company under the applicab le law. Nota bene : in furtherance of the above transitory provision, note is to be taken of regulation 1(2) and regulation 3 of the Trust s Act (Amendment of article 43(7)) Regulations, 2008 - Legal Notice 355 of 2008 - which state: "1.(2) These regulations shall come into force on the 1st December, 2009 and sh all apply to fees fa lling due on or after the said date. Nothing in these regu lations shall be deemed to affe ct the liability in respect of any fees due under the Trusts Act prior to the coming into force of the se regulations."; and "3. In article 43(7) of the Act ( the reference is to the Trusts Act before its amendment by Act XIII of 2004) , for the words "on the payment of a fee of Lm15", there shall be substituted the words "on the payment of a fee of €34.94 until 30th November 2009 and on the payment of a fee of €120 as from the 1st December, 2009".". TRUSTS AND TRUSTEES [CAP. 331. 65 CHAPTER 1- SCOPE Article 1 This Convention specifies the law applicable to trusts and gove rns their recognition. Article 2 For the purposes of this Convention, the term "trust" refers to the legal relationship created - inter vivos or on death - by a person, the settlor, when assets have been placed under the control of a trustee for the benefit of a beneficiary or for a specified purpose. A trust has the follow ing characteristics: (a) the assets constitute a separate fund and are not a part of th e trustee’s own estate; (b) title to the trust assets stands in the name of the trustee or in the name of another person on behalf of the trustee; (c) the trustee has the power and the duty, in respect of which he i s accountable, to manage, employ or dispose of the assets in acco rdance with the terms of the trust and the special duties imposed upon him by law. The reservation by the settlor of certain rights and power s, and the fact that the trustee may himself have rights as a beneficiary, a r e n o t necessarily inconsi stent with the existence of a trust. Article 3 The Convention applies only to trusts created voluntarily and e videnced in writing. Article 4 The Convention does not apply to preliminary issues relating to the validity of wills or of other acts by virtue o f which assets are transferre d to the trustee. Article 5 The Convention does not apply to the extent that the law specified by Chapter II does not provide for trusts or t he category of trusts involved. CHAPTER II - APPLICABLE LAW Article 6 A trust shall be governed by the law chosen by the settlor. The choice must be express or be implied in the terms of the instrument creating o r the writing evidencing the trust, interpreted, if necessary, in the light o f the circumstances of the case. Where the law chosen under the previous paragraph does not prov ide for trusts or the category of trust involved, t he choice shall not be effecti ve and the law specified in Article 7 shall apply. Amended by: XIV . 1989.13; XX. 1994.4. Substituted by: XIII. 2004.34. SCHEDULE (Articles 2 and 5A) CONVENTION ON THE L AW APPLICABLE TO TRUSTS AND ON THEIR RECOGNITION 66 CAP. 331.] TRUSTS AND TRUSTEES Article 7 Where no applicable law has been chosen, a trust shall be gover ned by the law with which it is most closely connected. In ascertaining the la w with which a trust is most closely connected reference shall be made in particular to : (a) the place of administration of t he trust designated by the set tlor; (b) the situs of the assets of the trust; (c) the place of res idence or busines s of the trustee; (d) the objects of the trust and the places where they are to be f ulfilled. Article 8 The law specified by Article 6 or 7 shall govern the validity o f the trust, its construction, its effects, and the administration of the trust. In particular that law shall govern - (a) the appointment, resignation and removal of trustees, the capa city to act as a trustee, and the devolution of the office of trustee; (b) the rights and duties of trustees among themselves; (c) the right of trustees to delega te in whole or in part the disc harge of their duties or the exercise of their powers; (d) the power of trustees to administer or to dispose of trust ass ets, to create security interests in the trust assets, or to acquire new asset s; (e) the powers of investment of trustees; (f) restrictions upon the duration of the trust, and upon the powe r to accumulate the incom e of the trust; (g) the relationships between the t rustees and the beneficiaries i ncluding the personal liability of the tr ustees to the beneficiaries; (h) the variation or termi nation of the trust; (i) the distribution of the trust assets; (j) the duty of trustees to acco unt for their administration. Article 9 In applying this Chapter a severable aspect of the trust, parti cularly matters of administration, may be gove rned by a different law. Article 10 The law applicable to the validity of the trust shall determine whether that law or the law governing a severable as pect of the trust may be replac ed by another law. CHAPTER III – RECOGNITION Article 11 A trust created in accordance with the law specified by the pre ceding Chapter shall be recognised as a trust. Such recognition shall imply, a s a minimum, that the trust property constitutes a separate fund, that the trustee ma y sue and be sued in his capacity as trustee, and that he may appear or act in this capa city before a notary or any person acting in an official capacity. In so far as the law applicable to the trust requires or provides, such rec ognition shall imply, in particul ar - (a) that personal creditors of the t rustee shall have no recourse against the trust assets; TRUSTS AND TRUSTEES [CAP. 331. 67 (b) that the trust assets shall not form part of the trustee’s est ate upon his insolvency or bankruptcy; (c) that the trust assets shall not form part of the matrimonial p roperty of the trustee or his spouse nor par t of the trustee’s estate upon his death; (d) that the trust assets may be recovered when the trustee, in br each of trust, has mingled trust assets with his own property or has al ienated trust assets. However, the rights and obligations of any third party holder of the assets shall remain subject to the law determined by the choice of law rules of the forum. Article 12 Where the trustee desires to register assets, movable or immova ble, or documents of title to them, he shall be entitled, in so far as this is no t prohibited by or inconsistent with the law of the State where registration is so ught, to do so in his capacity as trustee or i n such other way tha t the existence of the trust is disclosed. Article 14 The Convention shall not prevent the application of rules of law more favourable to the recognition of trusts. CHAPTER IV - GENERAL CLAUSES Article 15 The Convention does not prevent the application of provisions o f the law designated by the conflicts rules of the forum, in so far as th ose provisions cannot be derogated from by voluntary act, relating in particular to the following matters: (a) the protection of minors and incapable parties; (b) the personal and proprie tary effects of marriage; (c) succession rights, testate and intestate, especially the indef easible shares of spouses and relatives; (d) the transfer of title to proper ty and security interests in pr operty; (e) the protection of creditors in matters of insolvency; (f) the protection, in other respect s, of third parties acting in good faith. If recognition of a trust is prevented by application of the pr eceding paragraph, the court shall try to give effect t o the objects of the trust by o ther means. Article 16 The Convention does not prevent the application of those provis ions of the law of the forum which must be applied even to international situation s, irrespective of rules of conflict of laws. Article 17 In the Convention the word "law" means the rules of law in force in a State other than its rules of conflict of laws. Article 18 The provisions of the Convention may be disregarded when their application would be manifestly incompatible with public policy (ordre public ). Article 22 The Convention applies to trusts regardless of the date on whic h they were created.