   EXTERNAL TRANSACTIONS               [ CAP. 233.            1
CHAPTER 233
 EXTERNAL TRANSACTIONS ACT
Substituted by:
IX. 2003.30.
To establish a framework for the liberalisation of external transactions
and to provide for the collection of related information.
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; and Acts: XXII of 1976, XXXI of 1981, XIII
of 1983, II of 2002 and IX of 2003.
PART I
PRELIMINARY
Short title.
Amended by:
IX. 2003.32.
1. The short title of this Act is the External Transactions Act.
Interpretation.
Amended by:
II. 2002.34.
Substituted by:
XI. 2003.33.
2. (1) In this Act unless the context otherwise requires -
“capital transactions” means external transactions arising from
the transfer or movement of capital and includes:
( a ) transfers of immovable property;
( b ) direct investments;
( c ) the issue, sale or purchase of securities including
shares and stock in the capital of a company,
debentures, certificates of deposit and any other
similar instrument acknowledging indebtedness;
( 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;
Cap. 204.
“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
  2       CAP. 233. ]                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;
Cap. 371. “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;
“external transactions” includes both capital and current
transactions involving operations between resident and non-
resident 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” means 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;
“Member State” means a state which is a member of the
European Union;
“Minister” means the Minister responsible for finance;
Cap. 422.
“National Statistics Office” means the National Statistics Office
established under the Malta Statistics Authority Act;
“non-resident” means any person, body corporate or other entity
which is not a resident;
“payment” means -
( a ) any event which, wholly or in part, extinguishes a debt
of a sum of money between a resident and a non-
resident 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
   EXTERNAL TRANSACTIONS               [ CAP. 233.            3
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
place of residence is ordinarily in Malta or 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;
( c ) * any natural person regardless of nationality, whose
place of residence is ordinarily in a Memeber State or
who has resided in or has the intention to reside in a
Member State for a continuous period of one year;
( d )* any body corporate incorporated in or under the laws
of a Member State, or any entity which operates from
or is otherwise registered in a Member State;
Cap. 460.
“the Treaty” has the same meaning assigned to it by the
European Union Act.
(2) The Minister may appoint the Central Bank to act as agent
for the said Minister for any one or more of the purposes of this
Act, but any such appointment shall be without prejudice to the
exercise of any such power by the Minister.
(3) For such time as the Central Bank is appointed as agent for
the Minister under subarticle (2), the references in this Act to the
Minister shall, to the extent and subject to the terms and conditions
of such appointment, be deemed to include references to the
Central Bank. Notice of any such appointment, and of any
revocation of, or change in the terms and conditions of such
appointment, shall be published in the Gazette.
PART II
LIBERALISATION AND SAFEGUARD MEASURES
Liberalisation.
Substituted by:
IX. 2003.33.
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.
4. (1) Where exceptional circumstances arise, the Minister
may, on the recommendation of the Central Bank, make regulations
imposing such restrictions on capital transactions and related
payments, whether of a specific or a generic nature, as may be
deemed necessary:
*this paragraph will come into force on 1st May, 2004.
  4       CAP. 233. ]                EXTERNAL TRANSACTIONS
* Provided that such restrictions shall not be imposed in
relation to a Member State.
(2) For the purposes of subarticle (1), exceptional
circumstances shall be deemed to exist, where the Minister acting
upon the recommendation of the Central Bank, declares that:
( a ) there is a sudden crisis in Malta’s balance of
payments; or
( b ) movements of capital to or from Malta cause or
threaten to cause serious difficulties for the stability of
the financial system.
(3) Regulations made under subarticle (1) shall be revoked by
the Minister without delay as soon as the grounds which gave rise
to such restrictions cease to exist and, in any case, shall not remain
in effect for a period exceeding six months.
Sanctions.
Substituted by:
IX. 2003.33.
Cap. 365.
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.
6. Without prejudice to any other provision of this Act, the
Minister may require any person in Malta to provide such
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.
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 Maltese Liri and, or
in foreign exchange, and, or precious metals into or from Malta in
such amounts as may be specified in such regulation and to disclose
such other information as may be prescribed in such regulations
regarding such import or export.
Statistical 
information.
Substituted by:
IX. 2003.33.
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.
Non-dissemination 
of information.
Substituted by:
IX. 2003.33.
9. (1) Except for the purpose of any prosecution for an
offence against the Act with the written consent of the individual or
his representative, no information which can be related to an
identifiable person and which is obtained under this Act shall be
*this proviso will come into force on 1st May, 2004.
   EXTERNAL TRANSACTIONS               [ CAP. 233.            5
disseminated, shown or communicated to any person or body.
(2) Notwithstanding the provision of subarticle (1), the
Minister may disclose any information provided or obtained under
this Act, even where this relates to an identifiable person to any
body or authority in Malta responsible for the collection of any tax,
and may likewise, on the basis of any agreement with other states
which provide for the reciprocal exchange of such information
disclose information to similar bodies or authorities in the states:
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.
Offences and 
penalties.
Substituted by:
IX. 2003.33.
Cap. 330.
10. (1) Regulations under this Act imposing restrictions on
any transactions, or any obligation to report, provide statistics or
other information may also provide that any person who
contravenes any provision thereof shall be guilty of an offence and
shall be liable on conviction to such penalty being not more than a
fine ( multa ) of not more than twenty thousand liri, and such
regulations may moreover provide for administrative penalties in
lieu of criminal proceedings, the procedures therefor as well as for
appeals from decisions in connection therewith to the Financial
Services Tribunal established under article 21 of the Malta
Financial Services Authority Act or such other body as may be
prescribed.
(2) No criminal proceedings for any offence under such
regulations may be commenced without the consent of the Attorney
General.
Offences.
Amended by:
II. 2002.35;
IX. 2003.34.
11. (1) Any person who, after having registered any eligible
assets in terms of and within the period as may be established in
any scheme as may from time to time be made by the Minister,
would, but for the provisions of this subarticle, have contravened
any restriction, prohibition or requirement under article 39(1) of
the Exchange Control Act as in force on the 1st July, 2003, or such
other law as the Minister may prescribe, shall be deemed not to
have committed an offence under the said article 39 or other law as
prescribed with regard to the eligible assets so registered or monies
or other assets represented by such eligible assets so registered.
(2) The Minister may, by regulations under this subarticle,
make schemes for the registration of eligible assets and upon the
registration of such eligible assets in accordance with such scheme,
the provisions of subarticle (1) shall apply and the eligible assets so
  6       CAP. 233. ]                EXTERNAL TRANSACTIONS
registered may continue to be retained as prior to the date of
registration without the need to obtain such permits ot to comply
with such requirements under this or any other law as may be
prescribed. 
(3) ( a ) Any scheme made by the Minister in accordance with
subarticle (2) may impose such conditions as may
appear to the Minister to the appropriate and may,
without prejudice to the generality of the foregoing,
include - 
(i)   the payment of such fee as may be established in
the scheme not being a fee more onerous than
the tax that would otherwise be payable under
the relevant laws; 
(ii) the manner in which such fee shall be paid and
recorded; 
(iii) the manner in which registration shall be made
and recorded; and
(iv) such circumstances under which any asset may
not be registered. 
Cap. 123.
( b ) For the purposes of paragraph ( a ), the term "relevant
laws" has the same meaning assigned to it in article 9B
of the Income Tax Act.
