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Malta Increases Oversight Of Corporate Service Providers

by Mike Godfrey, Lowtax.net, Washington
09 April, 2014

The Malta Financial Services Authority has announced that it has received an overwhelming response to the introduction this year of licenses for Corporate Service Providers. It has reminded applicants to conform to the requirements set out in the Malta Company Service Providers Act 2013 while applications are reviewed.

CSP licensing was introduced earlier this year to make corporate services a regulated activity in Malta for the first time. The change follows the enactment of the Malta Company Service Providers Act 2013, in line with the Third Money Laundering Directive (EU Directive 2005/60/EC).

This Directive requires EU member states to closely regulate the provision of corporate services to boost efforts to tackle money laundering and the financing of terrorism. The Act imposes on the MFSA the obligation to ensure that all owners and operators of local CSPs are fit and proper persons.

The new Act regulates all corporate services. Nonetheless, the law exempts many local practitioners from registration including lawyers, accountants, and trustees, since these professions are already regulated by the Chamber of Advocates, the Accountancy Board, and the MFSA, respectively. Although CSPs themselves were previously not regulated in Malta, most local practitioners were already approved by some regulatory body.

In the transitional period, existing CSPs may continue to operate (provided they follow the requirements of the Act), and, under the EU Directive, the MFSA has six months in which to respond to all applications. All CSPs were required to apply for a licence by the end of last month, and in future new applicants will be obliged to apply before commencing business.

This new requirement reflects Malta's continued commitment towards its AML/CFT obligations, and is likely to add further credibility to Malta's growing corporate service industry.

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