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Maltese Laws |
TRUSTS AND TRUSTEES ACT
To make provision with respect to Trusts and to provide for matters ancillary or incidental thereto.
30th June, 1989
ACT XXXV of 1988, as amended by Acts XIV of 1989, XX of 1994, XIII of 2004 (see transitory provision at end of Chapter); and XII of 2006; Legal Notice 424 of 2007; and Acts XIII of 2007, III and XV of 2009, and X of 2011.
Substituted by: XX. 1994.4; XIII. 2004.2.
"the Act" means the Malta Financial Services Authority Act;
"approv ed juri sdiction" means a jurisdiction which has been approved by the Authority for the purposes of this Act;
"approved person" means a person of good reputation possessing experience and qualifications in financial, fiduciary, accounting
or legal services and approved by the Authority as being fit and proper to carry out the duties of a trustee;
"the Authority" means the Malta Financial Services Authority;
"beneficiary" means a person entitled to benefit under a trust or in whose favour a discretion to distribute property held
in trust may be exercised;
"body of persons" means any company, fellowship, society or other association of persons, whether vested with legal personality
or not;
"breach of trust" has the meaning assigned to it by article 4;
"charitable purpose" me ans any charitable or ph il ant h r o p i c purpose, and without prejudice to the generality of
the aforesaid, includes in particular:
(a) the advancement of education, including physical education and sports;
(b) the advancement of religion; (c) the advancement of health;
(d) social and community advancement;
(e) the advancement of culture, arts and national heritage; (f) the advancement of environmental protection and
improvement, including the protection of animals;
(g) the promotion of human rights, conflict resolution, democracy and reconciliation;
Short title. Amended by: XX.1994.4. Substituted by: XIII. 2004.2.
Interpretation. Amended by: XIV. 1989.2; XX. 1994.4; XIII. 2004.3; XIII. 2007.18; III. 2009.11. Cap. 330.
(h) the promotion or protection of the interests of other social purpose organisations, including federations of such organisations;
or
(i) any other purpose as may be prescribed by the Minister by means of regulations made by virtue of this Act;
but does not include a political purpose. For the purposes of this definition ''political purpose'' means the promotion of the interests of a po liti cal p a rt y or a poli tical cand idate, whether at l o cal, national or international
level, or to seek or oppose changes in the law or governmental policy or decisions except when such law or government policies or
decisions directly concern the achievement of charitable purposes;
"commercial transaction" means the following transactions and any transactions connected or ancillary thereto:
(a) securities offerings, whether to the public or for private placement, portfolio management and custody of investment
instruments;
(b) the securitisation of assets;
(c) the grant of real or personal security interests including hypothecs, mortgages, privileges, pledges and guarantees;
(d) collective investment schemes;
(e) employee benefit or retirement schemes or arrangements;
(f) syndicated loan agreements and other multi-creditor banking facilities;
(g) insurance policies and the payment of proceeds thereunder;
(h) timeshare and multi-property structures, and
(i) such other commercial transactions as may be prescribed in a Notice issued by the Minister;
"company" means a limited liability company duly formed and registered under any law for the time being in force in Malta,
and includes a similar body corp orate incorporated or registered abroad;
"the C o nvention” me ans the H a gu e Con v en tio n on t h e law applicable to trusts and on their recognition, which was
adopted by the Hag u e Conference on Private Intern atio nal Law on the 20
October 1984, and which came into force on the 1 January 1992 set out in all material parts in the Schedule;
"cor porat e trust e e" mean s a tr ustee whi c h i s a legal person wherever incorporated;
"Court" means the Civil Court in its voluntary jurisdiction unless otherwise indicated or unless the context refers to any
court seized of a matter in which case it is the court where the matter arises;
"foreign trust" means a trust the proper law of which is not the
law of Malta;
"Malta’ s i n ternatio nal co mm itm ents" m eans Malt a’ s commit men t s, respo n sibi liti es and obli g ation
s ari s i ng o u t of membership of, or af filiation to, or relationship with, any int e rnat io nal , gl ob al or regi ona l o
rgan i sati on s o r grou pin g of countries or out of any treaty, convention or other international agreement, however called,
whether bilateral or multilateral, to which Malta is a party;
"Mal tese tru st " means a trust whose pr oper law i s the l aw of
Malta;
"Minister" means the Minister responsible for finance;
"operating in Malta" means the existence of an office, branch, or other centre of professional or commercial activities
of a regular nature in Malta and does not include one or more unconnected and sporadic acts;
"person" includes a body of persons;
"prescribed" means prescribed by regulations made under this
Act;
"property" means property of any kind or description, whether movable or immovable, personal or real, and wherever situated,
and in relation to rights and interests whether vested, contingent, voidable or future;
"register" includes any kind of record;
"regulated market" shall have the same meaning assigned to it by the Financial Markets Act;
"remuneration" means any compensation or reward for acting as a trustee to be paid out of trust property in accordance
with the t e rms of trust, or otherwise, ot her t h an the reimbu r sement of expenses of the trustee or the indemnification in
favour of the trustee for expenses, liabilities and other claims;
"resident in Malta" shall mean, in case of an individual, a person whose habitual residence is in Malta and in case of a
company, a company registered in Malta;
"settlor" means the person who makes the trust and includes a person who provides trust property or makes a disposition
on trust or to a trust;
"term s of a tr ust" means the wr itten or oral terms of a trust, expressed or implied, and any other terms made applicable
by the proper law;
"trust" has the meaning described in article 3, and includes the trust property, the rights, powers, duties, interests,
relationships and obligations under a trust;
"trustee" in relation to property, means the person or persons holding or in whom the propert y is vested on term s of
trust in accordance with the provisions of this Act or is otherwise deemed to be a trustee under this Act;
Cap. 345.
Cap. 370.
"trust instrument " means th e in strume nt whereby the trust is created and includes any instrument varying the terms of
the trust and also a unilateral declaration of trust;
"trust property" means the property for the time being held on trust;
"unilateral declaration of trust" has the meaning assigned to it by subsection of article 7(3);
"unit trust" means any trust established for the purpose of, or having the effect, or providing, for persons having funds
available for investm e nt, facilities for the participation by them as beneficiaries under the trust, in any profits or income
arising from the acquisition, holding, management or disposal of any property whatsoever, being a collective investment scheme as
defined in the Investment Services Act.
(2) Any reference in this Act to any law, or provision thereof, shall be construed as a reference to that law or provision as from
time to time in force, and shall include a reference to any enactment replacing such law or provision, and to any subsidiary legislation
made thereunder.
(3) Words and expressions used in this Act with reference to any other law shall, so far as necessary to give effect to this Act
and consistently with the provisions thereof, have the same meaning as they have in the law with reference to which they are used
in the Act.
(4) In this Act and in any regulations made thereunder, if there is any conflict between the English and Maltese text, the English
text shall prevail.
Amended by; XX. 1994.4.
Meaning of trust. Amended by: XIII. 2004.4.
TRUSTS
(2) The trust property shall constitute a separate fund owned by the trustee, distinct and separate from the personal property
of the trustee and from other property held by the trustee under any other trust.
(3) The trust property is held by or in the name or under the control of the trustee who shall have full power as well as the duty
for which he is accountable, to administer, employ or dispose of the trust property in accordance with the terms of the trust and
any special duties imposed on the trustee by any law applicable thereto, to sue and be sued in respect of the trust and otherwise
to act in all matters concerning the trust.
(4) The holding of property under trusts shall have the
following legal effects:
(a) that personal creditors of the trustee shall have no recourse against the trust property;
(b) that the trust property shall not form part of the trustee’s personal estate upon his insolvency or bankruptcy;
and
(c) that the trust property shall not form part of the matrimonial property of the trustee or his spouse nor part of the
trustee’s estate upon his death.
(5) A trustee shall be entitled to appear or act in his capacity as trustee before a ny cou rt , any n otary or an y person acti
ng in an official capacity. Where the trustee desires to register property, movable or immovable, or documents of title to them,
he shall be entitled to do so in his capacity as trustee or in such other way that the existence of the trust is disclosed.
(6) Trusts create fiduciary obligations upon the trustee in favour of the beneficiary of the trusts. The settlor of trusts
shall have no rights in relation to trust property except as provided by this Act.
(2) The proper law of the trust shad be determined in accordance with this Act.
(3) The terms of a trust may provide for the proper law of the trust to be changed to the law of another jurisdiction.
Breach of trust.
Proper law of trusts. Amended by: XX. 1994.4; XIII. 2004.5.
(2) Those provisions shall, so far as applicable, have effect not only in rel atio n to th e trusts described in arti cle 2 and
3 of th e Convent ion b u t al so in relation to an y ot her trusts of pro p erty arising under the law of another country.
(3) In article 17 of the Convention, the reference to a State includes a reference to any country or territory (whether or not
a party to the Convention) which has its own system of law.
(4) Article 22 of the Convention shall not be construed as affect ing the l a w t o be appli e d in rel a tion to anyt
hing don e or omitted before the coming into force of the Recognition of Trusts Act.
(5) Nothing in the Convention shall have any effect on the
Applicability of Convention. Added by:
XIII. 2004.6.
interpretation of the laws of Malta relating to fiscal matters.
Validity and recognition of trusts. Amended by: XX.1994.4. Substituted by: XIII. 2004.7.
Cap. 16.
(2) When the proper law of a trust is a foreign law as the chosen applicable law of the trust or as determined in accordance
with article 7 of the Convention, notwithstanding the provisions of any other law, the validity of the trust, its construction, its
effects an d t h e admin istrati on of t h e tr ust sh al l b e gov ern e d by such foreign law and shall be recognised and given
effect to in Malta in accordance with the Convention and this Act.
(3) The administration of a trust may be regulated by a law different from the proper law of the trust.
(4) Trusts created or recognised in accordance with this Act are not prohibited by articles 331, 757 to 761 and 1776 of the Civil Code.
Cap. 16. (5) Article 586 of the Civil Code shall not affect any term of a trust because it relates to the inheritance of the settlor or because a disposition relating to property
under trusts is to take effect after the death of the settlor.
(6) Subject to the provisions of article 11 and article 21(7), wh en a co mmerci a l transacti on includ es the app o intm ent
of a trustee to hold property under trusts in relation to such transaction, the trust shall operate in accordance with the express
terms of the trust instrument.
Mandatory rules to prevail.
Added by: XIII. 2004.7.
(i) the protection of minors or incapable parties;
(ii) the personal and proprietary effects of marriage; (iii) succession rights, testate and intestate,
especially the indefeasible shares of spouses,
ascendants and descendants;
(iv) the transfer of title to property and security interests in property;
(v) the protection of creditors in matters of insolvency;
(vi) the protection, in other respects, of third parties acting in good faith,
which cannot be derogated from by voluntary act, such laws shall prevail over the terms of the t r ust un less oth e rw ise exp r
essly p r ov ided in this A c t o r i n ot her pro v isio ns of app licabl e law relating to trusts and related matters.
(2) To the extent that there exist rules of mandatory application
the cour ts shall app l y such m a ndatory rules subject to the provisions of article 6B.
(3) When a trust is governed by Maltese law and has no connection to Malta by reason of the domicile of the settlor at
the t i m e of set tlement of the prop erty on trust or the situs of the property, when imm ovable, the trust shall be governed by
the provisions of this Act except that the provisions of subarticle (1) shall not apply in any manner. In such cases no regard shall
be had to:
(i) the domicile, habitual residence, registration, authorisation or place of business in Malta of the trustee or any protector
or any person rendering administration, accounting or other services to the trustee, or
(ii) the fact that the proper law of the trust is
Maltese Law; or
(iii) the situs of property in Malta, when movable; or
(iv) the place of execution of the deed of trust, any documents relating to the trusts or the trust property or other
transaction documents is Malta.
(4) In the case of a foreign trust, the provisions of subarticle (1) shall only apply to such trust when the settlor is domiciled
in Malta at the time of creation of the trust, subject always to the rules stated in article 6B.
(5) In the case of a foreign trust, when the settlor of such a trust is not domiciled in Malta at the time of the creation of the
trust, the provisions of this Act shall apply only in so far as they regulate the recognition or otherwise in Malta of the effects
of such trust.
(6) To the extent that there exist rules of mandatory application in the law applicable in the circumstances in terms of Maltese
pri v ate int e rnat ion a l l a w, th e courts o f Malta may appl y such mandatory rules subject to the provisions of article 6B.
(7) When a court is requested to recognise a foreign judgement which enforces any rules of mandatory application as referred to
in subarticle (6), the court may accede to such request subject to the provisions of article 6B.
(a) the application of the mandatory rules shall not produce the failure or invalidity of the trust, and where possible,
the trust shall continue under the same terms in relation to property which is unaffected by such mandatory laws. Subject
to any order of the court, the affected property shall be held by the trustee in trust for the settlor absolutely, or if he is dead,
for his heirs;
(b) the trustee shall be empowered to -
Management of conflict provisions. Added by:
XIII. 2004.7.
(i) vary the terms of the trust in so far as relates to the nature or the extent of benefit, or
(ii) do such acts as are necessary and legally permissible,
so that the beneficiary derives the benefits in accordance with the intentions expressed by the settlor in the trust
instrument in a manner compatible with the mandatory rules and any property which becomes free from trusts for any reason shall be
held by the trustee in trust for the settlor absolutely, or if he is dead, for his heirs;
(c) for the purposes of resolving conflicts between the trust relationship and any mandatory provisions and to enable the
continuance of the trust as specified in paragraphs (a) and (b), the terms of the trust, where silent, shall be deemed to include:
(i) the power, without any obligation to do so, of the trustee to reduce the trust assets and return all or part of them to
the settlor or the estate of the settlor so as to achieve compliance with such provisions of law;
(ii) the power of the trustee to enter into arbitration and mediation agreements and to reach a compromise to disputes
and claims by third parties; and
(iii) the power to seek directions from the Court on such matters;
such powers being exercisable notwithstanding any contrary provisions of the trust and, provided the trustee acts honestly,
in good faith and reasonably, such acts shall not constitute a breach of trust.
(d) the property of the settlor which is not settled in trust should first be utilised, to the extent possible, to meet the claims
of any person seeking to invalidate or reduce a trust;
(e) notwithstanding any other applicable law, the trustee may meet a valid claim being made against the trust property, whether
voluntarily or as a result of a court direction, order or judgement, by a payment of value in money and shall not be obliged
to return property settled in trust in kind;
(f) any person who succeeds in reducing the property under trusts or obtains a court order to invalidate a trust in
part or who enjoys the benefits of an arrangement with the trustee as provided in paragraph (c)(i), shall forfeit the benefits under the trusts, unless the terms of the trust expressly state otherwise or the trustee considers
it unreasonable in the circumstances and obtains the consent of the Court to maintain in force trusts in favour of such person
subject to such
conditions as the Court may consider appropriate;
(g) in any event and notwithstanding any provision of law, a trustee shall not be subject to an obligation to pay or return more than
the trust property held by him under trust, after deducting any fees and costs, and he shall not be subject to any obligation
to account for any distributions made by him in good faith prior to having written notice of any claim.
(2) Without prejudice to the generality of subarticle (1), a trust may com e int o existence uni laterally or o t herwi s e b
y or al declaration, or by an instrument in writing including by a will, by operation of law or by a judicial decision:
Provided that where assets are held, acquired or received by a person for another on the basis of oral arrangements of a fiduciary
nature, express or implied, there shall be presumed to be a mandate regulated by Title XVIII of Book Second of the Civil Code or a deposit regulated by Title XIX of Book Second of the Civil Code, as the case may be, unless there is evidence of an intention to create an oral trust.
(3) A unilateral declaration of trust is a declaration in writing made by a trustee stating that it is the trustee of a trust,
containing all the terms of the trust as well as the names or the information enabling the identification of all the beneficiaries.
(4) A unit trust shall be created by a written instrument.
Creation of trust.
Amended by:
XX. 1994.4.
Substituted by:
XIII. 2004.8.
Cap. 16.
8. (1) The Courts of Malta shall have jurisdiction where - (a) the trust is a Maltese trust; or
(b) the trustee is resident in Malta or is a trustee
authorised by the Authority, or is otherwise constituted
in terms of Maltese law; or
(c) any trust property is situated in Malta; or
(d) administration of any trust property is carried on in
Malta.
(2) Notwithstanding the provisions of the Code of Organization and Civil Procedure, when the trust instrument contains a provision granting jurisdiction to the courts of the country the law of which expressly governs
the trust, the Courts in Malta shall, on demand of any party to the proceedings, provided it is made in limine litis, stay proceedings which may be instituted in Malta in favour of the chosen forum:
Provided that the court may in any case issue such interim orders for th e protectio n of an y interested party as it co nsi ders
app r opr iat e , an d pr ovid e d fur t her t h at th e co urt sh al l enjo y a discretion on whether to stay the proceedings if
the trust property consists of immovable prop erty in Malta or t h e settlor or the beneficiaries are domiciled and resident in Malta.
Jurisdiction of the Maltese courts. Substituted by: XX. 1994.4;
XIII. 2004.9.
Cap. 12.
Cap. 12.
(3) Subject to the above, the provisions of Sub-title III of Title II of Book Third of the Code of Organization and Civil Procedure (Of Pleas to the Jurisdiction) shall apply.
Rights of beneficiaries. Amended by: XX. 1994.4. Substituted by: XIII. 2004.10. Amended by: XIII. 2007.18.
(2) Rights of a beneficiary are personal to him and, subject to any applicable laws and only as stated in the terms of the trust,
creditors, spouses, heirs or legatees of the beneficiary may have rights only to the extent of the beneficiary’s entitlements under
the trusts and have no other rights in relation to the trust property or the trustee.
(3) The interest of a beneficiary under a trust shall be deemed to be m ovable property, even if the trust p r o p erty includes
immovable property.
(4) A person shall not be entitled to benefit under a trust unless he is -
(a) identifiable by name; or
(b) ascertainable by reference to a class or to a relationship to some person, whether or not living at the time
which under the terms of the trust is the time by reference to which members of a class are to be determined;
and if there are no benefic iaries identifiable or ascertainable as aforesaid the trust shall, unles s t h e pu rpo s e of the tru
s t is a charitable purpose, fail.
(5) Persons who are not yet conceived at the time of the settlement of property under trusts may be named as beneficiaries
or form part of a class of beneficiaries but their rights arise only once they are born viable.
(6) A settlor of a trust may also be a beneficiary under the trust. (7) The terms of the trust may provide for the addition
of a
person as a beneficiary, the exclusion of a beneficiary from benefit, or the imposition on a beneficiary of an obligation as a condition
for benefit.
(8) When the trustee is granted the power to add a person as a beneficiary such power shall be valid on condition that such person
i s id enti fi abl e by n a me or f o rm s par t of a cl ass of p e rso n s t h e members of which are reasonably individually identifiable,
such identification to be given either in the trust instrument or in any other written instrument, signed by the settlor, whether
binding or not on the trustee.
(9) A person who may be added as a beneficiary in terms of a power granted to the trustee shall not enjoy any rights in relation
to the trust property or against the trustee and shall not be considered a beneficiary in any manner until appointed as a beneficiary
by the
trustee.
(10) It shall be lawful for a trustee to be granted the discretion as to which beneficiaries are to benefit, the quantity of any
benefit, at what time and in what manner beneficiaries are to benefit and such o t her pow ers relating to t h e ap point ment
, ap plicat ion or advancement of trust property.
(11) A beneficiary in whose favour a discretion to appoint or advance property may be exercised shall have no rights in or to sp
ecifi c tr ust p r op erty unt il su ch t ime as such d i screti on is exercised by the appointment, application or advancement
of such trust property in favour of such beneficiary:
Provided that nothing in this subarticle shall be construed as excluding the duty of the trustee to properly and fairly consider all
such beneficiaries in the exercise of his discretion.
(12) A beneficiary may, by instrument in writing, disclaim his whole interest and such a disclaimer shall be irrevocable.
(13) Subject to the terms of the trust, a beneficiary may disclaim part of his interest, whether or not he has received some benefit
from his interest; in any such case, but subject to the terms of the trust, a disclaimer may, by the instrument by which the interest
is d i sclaimed, b e made revocab le, an d shall t h en be cap a bl e of revocation in th e manner and un der the cir c umstances
therei n mentioned or referred to.
(14) Subject to the terms of the trust, a beneficiary may, by instrument in writing, sell, charge, transfer or otherwise
deal with his interest in any manner.
(15) (a) The provisions of this article shall apply to disp osi tio ns in wi ll s i n fav our o f trust ees w h et her
appointed inter vivos or by testamentary disposition notwithstanding the provisions of articles 688, 693 and
695 and other provisions of the Civil Code.
(b) A disposition in a will in favour of - (i) a named trust, or
(ii) the trustee of a named trust, or
(iii) a named trustee or in his stead the pro tempore
trustee in relation to a named trust,
whether created inter vivos or by means of a will, shall be valid whether the trustee is in office or yet to be appointed in accordance with the terms of a trust.
(c) Any disposition in a will shall be valid even if, at the time of the opening of succession -
(i) the named trustee is no longer the trustee of the trust indicated in the will; or
(ii) there is no trustee in office,
and any such disposition shall be construed as referring to the trustee pro tempore of the trust indicated in the will.
Cap. 16.
Additional trust property. Amended by: XX. 1994.4. Substituted by: XIII. 2004.11.
(d) Without prejudice to the right of a trustee to accept an inheritance with the benefit of inventory, a trustee may not renounce
to a benefit under a will pursuant to a disposition in his favour as trustee or in favour of the trust except with the consent
of all the beneficiaries or the Court.
(e) The refusal to accept to act as a trustee under a trust or the resignation of a trustee from office shall not in any way affect
the operation of a testamentary disposition in favour of a trust and, in such case, the provisions of articles 19 and 20 shall apply.
(2) The trust property shall be such property as is settled in trust by the settlor, that subsequently added, all fruits therefrom and property which represents the original or added property.
Failure of a trust.
Amended by:
XX. 1994.4;
XIII. 2004.12.
(2) Trusts shall fail if any court declares that their purpose or the terms of trust are not possible, or illegal, immoral or contrary
to public policy, or otherwise tainted by error, fraud or violence, or any other reason which invalidates legal acts according to
the laws of Malta.
(3) The Court may declare the failure of all or of only one or more purposes or terms of the trust and shall have the power to
direct that the purposes or terms which can be properly separated from th e fail ed pu rposes or terms cont inue to b e valid and
enforceable subject to any directive it may give.
(4) Where the trustee of a trust is of the opinion that the trust is or may be wholly or in part invalid he shall seek directives
from the court as to the validity or otherwise of the trust and as to any matter concerning the property subject to that trust and
his obligations in relation thereto.
(5) Directives as provided in subarticle (4) may also be requested by the settlor, and by any of the beneficiaries.
(6) Property as to which a trust has wholly or partially failed shall , sub ject to any o rder of any co urt or a direct ion issued
in terms of article 38C, be held by the trustee in trust for the settlor absolutely, or if he is dead, for his heirs.
(2) Subarticle (1) shall not apply to a trust for a charitable purpose, to a unit trust or to a retirement scheme registered in terms of the Special Funds (Regulation) Act and set up as a trust.
Duration of trusts.
Amended by:
XIII. 2004.13;
XII. 2006.59.
Cap. 450.
(a) liable to termination; or
(b) subject to restriction on alienation or dealing; or
(c) subject to diminution or termination in the event of the beneficiary becoming bankrupt, or insolvent, or any of his property becoming
liable to seizure for the benefit of his creditors; or
(d) not liable to attachment under a garnishee order issued against the trustee or to termination without the prior consent of the
Court, when the interest is expressed to be for the maintenance of the beneficiary or as a pension.
(2) In the case of a testamentary trust and where the benefit to the beneficiary consists in an annuity or pension or the use
and enjoyment of property and the enjoyment of fruits therefrom, the terms of the trust may make the interests of the beneficiary
-
(a) subject to restriction on alienation or dealing;
(b) not liable to attachment under a garnishee order served on the trustee as garnishee; or
(c) not liable to termination without the prior consent of the Court.
Protective trust. Substituted by: XX .1994.4. Amended by: XIII. 2004.14.
(a) revocable, whether wholly or in part; or
(b) capable of variation,
no such revocation or variation shall prejudice anything lawfully done by a trustee in relation to a trust before he receives notice
of such revocation or variation.
(2) Subject to the terms of the trust, if a trust is revoked the t r u s t e e shall h o l d the tru s t pro p ert y in tr ust
fo r t h e sett lo r absolutely.
(3) Where a trust is partly revoked subarticle (2) shall apply to the property affected by the revocation.
(4) Where trusts have been settled by more than one settlor and
Variation of terms of a trust.
Revocation of a trust.
Amended by: XIII. 2004.15.
are expressed to be revocable, such trusts may only be revoked with the express consent of all settlors.
(5) Unless the terms of a trust expressly provide that the trust is revocable or capable of variation, the settlor may not revoke
or amend the trust instrument.
Lapse of interest or termination. Amended by:
XIII. 2004.16.
(a) an interest under a trust lapses; or
(b) a trust terminates; or
(c) there is no beneficiary and no person who can become a beneficiary in accordance with the terms of the trust,
the interest of the property affected by such lapse, termination or lack of beneficiary shall be held by the trustee in
trust for the settlor absolutely or, if he is dead, for his heirs.
(2) Where an interest or property is held by a trustee for a charitable purpose whic h has ceased to exist or is no longer
applicable, that interest or property shall be held for such charitable purposes as the court may declare to be consistent with the
original intention of the settlor, or as the court may otherwise determine.
(3) In this section "settlor" means the particular person who provided the interest or property af fected as mentioned
in subarticle (1).
(4) An application to the court under this section may be made by any of the persons mentioned in article 37(3).
Termination of a trust.
Amended by: XX. 1994.4.
(2) Notwithstanding the provisions of subarticle (1), the trustee may require to be provided with reasonable security for liabilities
whether existing, futu re, co ntingent or o t herw ise befo re distributing trust property.
(3) Subject to the provisions of this section and notwith- standing the terms of the trust, where all the beneficiaries
are in existence and have been ascertained and no one of them is interdicted or a minor, they may require the trustee to terminate
the trust and distribute the trust property among them.
(4) The court may, on the termination of a trust, or at any other time -
(a) require the trustee to distribute trust property;
(b) direct the trustee not to distribute trust property; or
(c) make such other order as it thinks fit.
(5) In this section "liabilities" includes contingent liabilities.
(6) An application to the court under this section may be made by any of the persons mentioned in article 37(3).
TRUSTEES
The fact that there may not be a trustee in office at any time shall not ope rate as a cause of in v ali di ty o r ter m in ati on
o f any trusts and in such cases the matter shall be determined by the terms of the trust and the provisions of this article.
(2) A trustee may be a natural person provided he is of full age and legal capacity and not under any legal impediment to so act.
A trustee may also be a juridical person the objects of which include acting as a trustee.
(3) Where there is no trustee or there is a vacancy among the trustees which cannot otherwise be filled, the last former trustee
or any trustee, or any beneficiary or the Attorney General may apply to the court for the appointment of a new trustee.
(4) The court -
(a) upon being satisfied that an application made by beneficiary has been served on the last former trustee or on at least
one of the other trustees, if any; and
(b) having heard the representations made by the said trustee or trustees, or by any beneficiary; and
(c) having ascertained that the trustee indicated for the purpose in the application or otherwise intended for appointment as
the new trustee is willing to act,
may make an order appointing a new trustee.
(5) Subject to the terms of the trust, a trustee appointed as a n e w t r ustee under this section shall have the same po wers,
discret i ons and d u ti es as if he had or igi n ally been appo inted trustee.
(6) On the appointment of a new trustee anything requisite for vesting the trust property in or under the control of the trustee
for the time being shall be, and may be required by the trustee or any beneficiary to be, done.
(7) In the case of death of a trustee, his heirs or testamentary executor shall be bound to immediately transfer all trust property
to a successor trustee appointed in terms of the trust instrument or by the Court. In the case of the insolvency, dissolution or
winding up of a corporate trustee, such obligation shall be performed by any person having authority to bind the corp orate trustee
being , a director, liquidator, provisional administrator or similar functionary and this irrespective of any proceedings or formalities
applicable upon such events. Until such time as such obligation is performed, all persons in control of trust property shall be obliged
to preserve the trust assets and shall be bound by fiduciary obligations towards the beneficiaries.
Appointment of trustees. Amended by: XIV. 1989.3; XIII. 2004.17.
Acceptance of trust.
Amended by:
XIII. 2004.18;
XIII. 2007.18.
(2) A trustee who has not accepted and is not deemed to have accepted appointment as trustee may disclaim such appointment within
a reasonable period of time after becoming aware of it by notice in writing to the settlor or to the other trustees.
(3) If the settlor is dead or cannot be found and there are no other trustees, the trustee to which subarticle (2) applies may
apply to the court for relief from the appointment and the court may make such order as it thinks fit.
(4) In the case of a trust created in a will, when the trustee does not act either in terms of subarticle (2) or in terms of subarticle
(3) within three months of the date of the death of the settlor, the heirs may, and the notary who published the will, or the Notary
keeper of his deeds shall, apply to the Court for the appointment of a trustee in accordance with the terms of the trust and this
Act.
Resignation and removal of trustees. Amended by: XX. 1994.4; XIII. 2004.19.
(2) A resignation -
(a) given in order to facilitate a breach of trust; or
(b) which would result in there being no trustee, shall have no effect:
Provided that a trustee may resign office notwithstanding the provisions of paragraph (b), if, before the resignation takes effect, appli cat ion is m a de to the court for th e appointmen t of a new trustee and a new
trustee has been so appointed.
(3) A trustee shall cease to be a trustee immediately upon - (a) the removal of the trustee by the court; or
(b) the coming into effect of a provision in the terms of a
trust under which the trustee is removed from office or
otherwise ceases to hold office; or
(c) steps are taken for the winding up of, or declaration of bankruptcy, of the person acting as trustee.
(4) A trustee ceasing to be a trustee shall concur in executing all documents necessary for the vesting of the trust property in
or u nder th e con trol of the new trustee an d su ch o bli gati on of the person ceasing to be a trustee shall be capable of forced
execution by the court.
(2) Subject to the provisions of this Act, trustees shall carry out and administer the trus t according to its terms; and, subject
as aforesaid, the trustees shall ensure that the trust property is vested in them or is under their control and shall, so far as
reasonable and subject to the terms of the trust, safeguard the trust property from loss or damage:
Provided that the granting of security by assignment or pledge as authorised by the terms of the trust is permitted:
Provided further that the transfer by the trustee of trust property to a legal entity wholly owned or controlled, directly
or indirectly, by the trustee or to another trust of which he is the sole trustee or to another trustee under trusts for the sole
benefit of the trustee, shall be permitted and in such case the duties and liabilities of the trustee under this Act or the deed
of trust shall not be diminished or otherwise affected in any manner whatsoever.
(3) Except as permitted by this Act or as expressly provided by the terms of the trust, a trustee shall not, without the authority
of the court -
(a) directly or indirectly profit from the trusteeship; or
(b) cause or permit any other person to profit directly or indirectly from the trusteeship; or
(c) on his own account, with a person related to him by affinity or consanguinity in the direct line or up to the third degree in
the collateral line or with a partner in any partnership, enter into any transaction related to trust property.
(4) Trustees shall keep accurate accounts and records of their trusteeship and shall, upon a request by any beneficiary, disclose
such accounts and records to such beneficiary and shall, subject to the terms of the trust, provide a copy of such accounts within
a reasonable time of a request:
Provided that it shall be lawful for a beneficiary to suspend such rights in favour of an independent third party in cases where the
beneficiary is required to do so by any agreement or by law as a result of any existing or potential conflict of interest, and this
for such time as the said conflict of interest subsists and under such conditions as may be agreed or are otherwise applicable.
(5) Trustees shall keep trust property distinct and separate from their own property as well as from any other property held by
them under any other trust or title, and separately identifiable therefrom:
Provided that trustees may, if expressly permitted by the terms of the trust, or in any case where the trust property consists of
fungible things, place and keep trust property in a common pool of identical assets or in a clients’ or common account.
(6) Trustees shall not enjoy any benefits under any trust of
Duties of trustees.
Amended by:
XIV. 1989.4;
XX. 1994.4;
XIII. 2004.20.
which they are the sole trustee without the prior authority of -
(a) the Authority, in case of a trustee authorised in terms of article 43 or not required to be authorised in terms of article 43(6);
or
(b) the Court, in any other case:
Provided that in case of an express fixed trust in favour of the trustee, only prior notification in writing to the Authority shall
be required:
Provided further that a transfer of property by the trustee to another trust of which he is the sole trustee or sole beneficiary,
shall not be deemed to be a benefit under this subarticle:
Provided further that remuneration for acting as a trustee or indemnification for expenses, liabilities and other claims shall not
be treated as a benefit under a trust:
Provided further that this subarticle shall not apply to a trustee holding property in relation to a commercial transaction.
(7) Notwithstanding the provisions of this Act and other provisions which cannot be derogated from by voluntary act, when
a commercial transaction includes the appointment of a trustee to ho ld pro p e r t y in r e l a ti o n to su ch transaction, the
duties and liabilities of trustees as stated in this Act may be varied by the terms of the trust and shall be regulated exclusively
by the express terms of the trust or any applicable legislation:
Provided that nothing in this subarticle shall permit a trustee to be exonerated from the effects of, or be indemnified for,
his own fraud, wilful misconduct or gross negligence.
Co-trustees. Amended by: XIII. 2004.21.
(a) act jointly in the performance of their duties and the exercise of their powers, unless in urgent cases it is not possible for
any one or more of them so to act;
(b) not exercise any power or discretion unless all the trustees are in agreement;
and where the terms of the trust empower the trustees to act by a majority, a trustee who dissents from a decision of the majority,
shall cause his dissent to be recorded in writing.
(2) Trust property shall at all times vest in the co-trustees in possession between them pro indiviso.
Impartiality of trustees.
(2) A trustee shall exercise his powers in the interest of the beneficiaries and in accordance with the terms of the trust.
Powers of trustees. Amended by: XX.1994.4.
(2) Subject to the terms of the trust, the protector shall have the following powers:
(a) to appoint a new or additional trustee; (b) to remove a trustee;
(c) to require the trustee to obtain his discretion.
(3) In the exercise of his office the protector shall not be deemed to be a trustee.
Protector. Added by: XX. 1994.4.
(2) Except where the terms of the trust specifically provide to the contrary, a trustee -
(a) may delegate management of trust property to and employ investment managers whom the trustee reasonably considers
competent and qualified to manage the investment of trust property;
(b) may employ accountants, advocates, attorneys, bankers, brokers, custodians, investment advisers, nominees,
property agents, solicitors and other professional agents or persons to act in relation to any of the affairs of the
trust or to hold any of the trust property.
(3) A trustee who in good faith and without neglect makes a delegation or an appointment in accordance with the provisions of this
section, shall not be liable for any loss arising to the trust in consequence thereof.
(4) A trustee may authorise a person referred to in subarticle (2) to retain any commission or other payment usually payable in
relation to any transaction.
Delegation by trustees.
(2) Subject to the terms of the trust, and subject to any prior interest or charges affecting the trust property, where a beneficiary
is a minor and whether or not his interest is a vested interest or an interest which will become vested on attaining the age of majority
or a later age or upon the happening of any event, the trustee may -
(a) accumulate the income attributable to the interest of
Accumulation, advancement or appropriation of trust property.
such beneficiary pending the attainment of the age of majority or such later age or the happening of such an event; or
(b) apply such income or part of it to or for the maintenance, education or other benefit of such
beneficiary; or
(c) advance or appropriate to or for the benefit of any such beneficiary such interest or part of such interest.
(3) The receipt given by a parent or the lawful guardian of a beneficiary who is a minor shall be suff ici ent discharg e to the
trustee for a payment made under subarticle (2).
(4) Subject to the terms of the trust, and subject to any prior interest or charges affecting the trust property, the trustee may
advance to, or apply for the benefit of, a beneficiary part of the trust property prior to the date of the happening of the event
upon the happening of which the beneficiary becomes entitled absolutely thereto.
(5) Subject to the terms of the trust, a trustee may appropriate tr ust pro per ty in or t owards the satisfaction o f the i nterest
of a beneficiary in such manner and in accordance with such valuation as the trustee may think fit.
(6) Any part of the trust property advanced, applied or appropriat e d as aforesaid shall be brought into account
in determining from time to time the share of the beneficiary in the trust property.
(7) No part of the trust property advanced, applied or appropriated as provided in this section shall exceed the
presumptive, contingent or vested share of the beneficiary in the trust property.
Appointment or assignment of trust property.
Amended by: XIV. 1989.5.
Remuneration and expenses of trustees.
(2) A trustee may reimburse himself or pay out of the trust all expenses properly incurred by him in connection with the trust.
Duty of trustee to provide information. Amended by:
XIII. 2004.22.
(a) the Court;
(b) subject to the terms of the trust, the settlor; (c) the protector of the trust;
(d) subject to the terms of the trust, any beneficiary of the trust who is of full age and capacity, or if a minor, to his lawful
guardian or representative;
(e) subject to the terms of the trust, any charity referred to by name for the benefit of which the trust was established;
and
(f) in case of a trust established for a charitable purpose, the Attorney General or the relevant authority under applicable law.
(2) Subject to the terms of the trust and to any order of the court given for special reasons, a trustee or any other person shall
no t be requ ired t o d i scl o se t o any person any d o c u m e n t or information which -
(a) discloses the trustee’s deliberations as to the manner in which a power or discretion was exercised, or a duty conferred or
imposed by law or by the terms of the trust was performed;
(b) discloses the reason for any particular exercise of such power or discretion or performance of duty or the material upon
which such reason will be or might have been based;
(c) relates to the exercise or proposed exercise of such power or discretion or the performance or proposed performance of
such duty.
(3) Unless the terms of the trusts expressly determine the time when and the method how beneficiaries are to be informed of their
entitlement under a trust, the trustee shall be obliged to inform any beneficiary of his entitlement, in writing, within a reasonable
time of his accepting to act.
(4) When the terms of the trust grant a discretion in terms of article 9(10), the terms of the trust may suspend until such time
as a discretion is exercised in their favour the duty of the trustee to inform such beneficiaries that they may benefit under the
trust or that they form part of a class of beneficiaries which may so benefit. The terms of the trust may also indicate the time
when and the method of how such beneficiaries are to be informed.
(5) If the trust instrument expressly prohibits notification of information to beneficiaries or to those persons that form part
of a class from among which beneficiaries may be appointed, without reference to any point in time, ascertained or ascertainable,
such term shall be construed as implying a duty of the trustee to inform such beneficiaries within a reasonable time after the death
of the settlor.
(6) Should the trustee consider providing information as required by the preced ing sub a rticles t o be prejudicial
to the beneficiaries of the trust or any of them, the trustee may apply to the Court and the Court may release the trustee from the
obligation
to inform under such conditions as it may consider appropriate.
(7) The duty to inform as above provided shall not arise if the trustee is in p o ssessio n of info rmati on whi c h reasonably
demonstrates that those entitled to such information have already been informed or are already aware of such information.
(8) In the case of a trust established for charitable purposes, the duty to inform either unnamed beneficiaries forming part of
a class or persons forming part of a class of persons who may be appointed as beneficiaries in terms of a power of the trustee, shall
not arise n o t w it hst a nd in g t h e ter m s o f th e t r u s t u n l e ss, in ca se of the unnamed beneficiaries the trustee
establishes that there exist less than ten beneficiaries appertaining to such class of beneficiaries. Furthermore, in the absence
of any indication to the contrary, the un named beneficiaries or persons wh o may be added as beneficiaries in terms of a power
shall be assumed to be persons who carry on relevant charitable activities principally in Malta.
(9) The trustee shall carry out the duty to inform to the best of his abilities and at the expe nse of th e tru s t an d i n the
ev en t it appears to the trustee that such e x ercise will be too costly or burdensome, the trustee may apply to the Court for directions
and the Court shall be empowered to release the trustee from such duty under such conditions as it considers appropriate.
(10) The suspension of the duty of a trustee to inform beneficiaries as provided in this article shall not reduce
the rights of beneficiaries or the duties and liability of the trustee towards such beneficiaries in terms of this Act.
(11) Persons who may be added as beneficiaries in terms of a power referred to in article 9(7) shall have no right of information
until such time as they are appointed beneficiaries by the trustee pursuant to such power.
(12) In the case of a trust to hold property in relation to a commercial transaction, the duties of the trustee relating
to the provision of information and the rights of beneficiaries to such information may be determined by the terms of trust, in which
case the preceding subarticles of this article shall not apply.
Liability for breach of trust.
Amended by: XX.1994.4.
(a) the loss of depreciation in value of the trust property resulting from the breach;
(b) the profit, if any, which would have accrued to the trust if there had been no such breach.
(2) A trustee may not set off a gain from a breach of trust against a loss from the same or some other breach of trust.
(3) A trustee shall not be liable for a breach of trust committed prior to his appointment, if such breach of trust was committed
by some other person. It shall, however, be the duty of the trustee on becom i ng aware of it to take all reasonable steps to have
such breach remedied.
(4) A trustee shall not be liable for breach of trust committed by a co-trustee unless -
(a) he becomes aware or ought to have become aware of the commission of such breach or the intention of the co-trustee to commit
a breach of trust; and
(b) he actively conceals such breach or such intention or fails within a reasonable time to take proper steps to protect or restore
the trust property or prevent such breach.
(5) Nothing in the terms of a trust shall relieve, release or exonerate a trustee from liability for breach of trust
arising from his own fraud, wilful misconduct or gross negligence.
(6) Where two or more trustees are liable in respect of a breach of trust, their liability shall be joint and several.
(7) A beneficiary may, in respect of a liability to him for a breach of trust already committed, relieve a trustee of, or indemnify
him against, such liability, but only if the beneficiary -
(a) has legal capacity; and
(b) has full knowledge of all material facts; and
(c) has not been improperly induced by the trustee to give the relief or indemnity.
(8) The court may relieve the trustee either wholly or in part from liability for a breach of trust wher e it is satisfied that
the trustee has acted honestly and reasonably and ought in fairness to be excused in the circumstances.
(2) A trustee of a trust shall disclose to any co-trustee any interest which he has as trustee of another trust if any transaction in relation to the first mentioned trust is to be entered into with the trustee of such other trust.
Trustees acting in respect of more than one trust.
(2) Where in any such transaction or matter a trustee fails to inform a third party that he is acting as trustee, and that party
is otherwise unaware of it, the trustee -
(a) shall be personally liable to such third party in respect thereof; and
(b) shall have a right of recourse to the trust property by way of indemnity against such liability, unless the trustee acted
in breach of trust.
Dealings with third parties.
Amended by: XX.1994.4.
(3) In this section "third party" means any person not being a settlor, a trustee or a beneficiary of the trust.
Constructive trustees.
(2) Subarticle (1) shall not apply to a person acquiring property under an onerous title in good faith.
(3) A person who is or becomes a constructive trustee shall deliver up the property to or in favour of the beneficiaries thereof.
Position of outgoing trustee. Amended by: XX.1994.4.
(2) A trustee who resigns or is removed or otherwise ceases to be a trustee and has complied with the requirements of subarticle
(1) shall be released from liability to any beneficiary, trustee or person interested under the trust for any act or omission in
relation to the trust property or his duty as a trustee, except in respect of actions arising from breach of trust to which such
trustee was a party or to which he was privy.
(3) A trustee who resigns or is removed or otherwise ceases to be a trustee shall continue to be liable to any beneficiary, trustee
or person interested under the trust for the recovery from such trustee of trust property or the proceeds of trust property in the
possession of the trustee o r converted to the trustee’s own use o r not surrendered as required by subarticle (1).
MISCELLANEOUS PROVISIONS REGARDING TRUSTS
Class interest. 35. (1) Subject to the terms of the trust, the following rules shall apply where a trust, or an interest under a trust, is in favour of a class of persons:
(a) a class closes when it is no longer possible for any other person to become a member of a class;
(b) a woman who is over the age of fifty-five years shall be deemed to be no longer capable of bearing a child;
(c) where any class interest relates to income and for any period there is no member of the class in existence, the income shall be
accumulated and, subject to article 12, shall be retained until there is a member of the class in existence or the class closes.
(2) In this section "class interest" means a trust or an interest under a trust which is in favour of a class of persons.
(a) any person incapacitated at law having directly or indirectly, an interest, whether vested or contingent, under the trust;
or
(b) any person, whether ascertained or not, who may become entitled, directly or indirectly, to an interest under the trust
as being at a future date or on the happening of a future event a person of any specified description or a member of
any specified class of persons; or
(c) any person unborn; or
(d) any person in respect of any interest of his that may arise to him by reason of any discretionary power given to any one
on the failure or determination of any existing interest that has not failed or determined,
any arrangement, by whomsoever proposed and whether or not there is any other person beneficially interested who is capable
of assenting thereto, varying or revoking all or any of the terms of the trust or enlarging the powers of the trustees
of managing or administering any of the trust property.
(2) The court shall not approve an arrangement on behalf of any person coming within subarticle (1)(a), (b) or (c), unless it is satisfied that the carrying out of such arrangement appears to be for the benefit of that person.
(3) Where in the management or administration of a trust, any sale, lease, pledge, charge, surrender, release or other disposition,
or any purchase, investment, acquisit i on, expendit u re or other transaction is in the opinion of the court expedient but the
same cannot be effected by reason of the absence of any power for that purpose vested in the trustee by the terms of the trust or
by law, the court may confer on the trustee, either generally or in any particular circumstance, a power for that purpose on such
terms and subject to such provisions and conditions, if any, as it thinks fit, and may direct in what manner a n d fr om what property
any money authorised to be expended, and the costs of any transaction, are to be borne.
(4) An application to the court under this section may be made by the trustee or by any beneficiary.
Variation of terms of trust by the court and approval of particular transactions.
(2) The court may also, if it thinks fit - (a) make an order concerning -
(i) the execution or the administration of any trust;
or
(ii) the trustee of any trust, including an order
Other powers of the court. Amended by: XIV. 1989.6; XIII. 2004.23.
relating to the exercise of any power, discretion or duty of the trustee, the appointment or removal of a trustee,
the remuneration of a trustee, the submission of accounts, the conduct of the trustee and any payments into court; or
(iii) any beneficiary or any person having any connection with the trust;
(b) make any declaration as to the validity or enforcement of a trust, the existence of any resulting or constructive trust, breach
of trust or failure of a trust;
(c) rescind or vary any order or declaration made under this Act, or make any new or further order or declaration.
(3) An application to the court for an order or declaration under subarticle (2) may be made by the trustee or by any beneficiary
or by the Attorney General or by any other person having a lawful interest:
Provided that in cases where the duty to inform a beneficiary of his interest in a trust has been suspended in terms
of article 29 and until such suspension is in force, and in the absence of a protector of a trust, the settlor of a trust may also
make an application to the Court in terms of this subarticle. Whilst dealing with such application the Court m a y determ ine whether
the suspension of rights to information as aforesaid be maintained in force in full or in part for all or some of the beneficiaries.
(4) Where the court makes an order for the appointment of a trustee it may impose such conditions as it thinks fit, including conditions
as to the vesting of trust property.
(5) Subject to any order of the court, a trustee appointed by the court under this section shall have the same powers, discretions
and duties as if he had been originally appointed a trustee.
Order as a result of bad faith.
Added by:
XIII. 2004.24.
Cap. 16.
(2) When a person domiciled in Malta is obliged to pay maintenance in terms of the Civil Code and is a beneficiary under a d i scret i onar y tru s t, the cour t sh all have su ch p o wer s as are necessary to review the exercise of discretion by the trustee and give due consideration to the rights of persons entitled to claim maintenance.
Applications, enforcement and hearings. Amended by: XIV. 1989.7;
XIII. 2004.25.
(2) Such decrees, orders, declarations or directions shall remain in force until they are substituted or varied by
the Civil
Court in either its voluntary or contentious jurisdiction.
(3) During the hearing of an application before the Court the trustee or applicant shall at the earliest opportunity disclose to
the Court all material facts known to him which may be relevant to the application including the existence of any res judicata or pending judicial action given or commenced in Malta or before a foreign court.
(4) All applications to the Court shall be notified to the trustee an d th e ap plicant sh all furth e rmo r e not ify all perso
n s who he considers having an interest in the subject matter of the application. The Court shall have the power to order notification
to all other persons who it considers may have an interest as it deems fit.
(5) The Court shall hear the trustee and any interested parties as it considers appropriate.
(6) Without prejudice to any other power given to the court by virtue of the foregoing provisions of this section or of any other
law, where a trustee neglects or refuses to perform any duty or to comply with any order of the court, the court may, on such terms
and conditions it may deem appropriate, order that the required action be executed, made or done by such person as the court may
ap point for t he purp ose, at the cost of the trust ee i n default, or otherwise as the court may direct; and anything so executed,
made or done shall operate and have effect for all purposes as if it had been executed, made or done by the trustee.
38A. (1) All proceedings under these articles shall be held in camera and only the parties to the proceedings, the trustees, the beneficiaries, if they prove they have an interest in the proceedings
to the satisfaction of the Court, and their respective advocates and legal procurators shall be allowed in court during the hearings.
(2) Any decree or judgement of the Court shall preserve the confidentiality of the proceedings and shall only reveal such facts
as may be necessary to make the same intelligible and enforceable by the parties and the trustees.
(3) All applications, responses, affidavits, opinions, statements and other documents or evidence shall be kept by the Registrar
of the Court in a confidential manner and no access shall be given thereto except with the written consent of the Court.
(4) The Court may order the notification of any order to the depository notary as is referred to in article 43A if it considers
it appropriate in the circumstances.
Confidentiality.
Added by:
XIII. 2004.26.
38B. The Board established under article 29 of the Code of O r g a nizat io n an d Ci vi l Pro c ed ur e may make Ru les o f Co ur t concerning applications made under or in terms of this Act.
Rules of Court.
Added by:
XIII. 2004.26.
Cap. 12.
Directions from the
Authority.
Added by:
XIII. 2004.26.
prevention of money laundering. Any bona fide communication or disclosure made in terms of this article shall not be treated as a breach of the duty of professional secrecy or any other restriction, whether imposed by statute or otherwise, upon the disclosure of information and any information disclosed in terms of this article shall be used only in connection wi th investigations of money laundering.
Payment of costs. 39. The costs and expenses of and incidental to an application to the court under this Act shall be paid out of the trust property or be borne and paid in such other manner or by such other person as the court may order.
Protection of persons dealing with trustees. Amended by: XIII. 2004.27.
(2) No person paying or advancing money to a trustee shall be concerned to see that such money is required for the purposes of
the trust, or that no more than is required is raised, or otherwise as to the propriety of the transaction or the application of
the money.
(3) A person dealing with a trustee in relation to trust property need not -
(a) enquire into the terms of the trust; or
(b) obtain the consent of the beneficiaries or any other person,
and shall, subj ect to being in good fait h, be entitled to rely on declarations made by the trustee with regard to any matters therein
stated.
(4) The trustee may furnish to any person a certificate containing the following information without being in
breach of any confidentiality obligations:
(a) that the trust exists and the date the trust instrument was executed;
(b) the identity and address of the current trustee;
(c) that the trustee is duly authorised and empowered to carry out the relevant transaction and has obtained all necessary consents,
if any;
(d) the revocability or irrevocability of the trust and, if revocable, that the trust has not been revoked.
(5) When there is more than one trustee, a certificate may be signed and authenticated by any trustee.
(6) Any trustee who issues any certificate containing any statement which he knows or ought to know is false shall be guilty
of an offence and shall on conviction be liable to the punishment of im pr iso n m e nt f o r a ter m no t ex c eedin g tw o y ears
or t o a fine (multa).
40A. (1) Without prejudice to the personal liability of a trustee, trust property which has been alienated or dealt with in
breach of trust, or the property into which it has been converted, may be followed and recovered unless it is in the hands of a bona fide purchaser for value without notice of the breach of trust:
Provided that an alienation of immovable property by the trustee as provided by article 958A of the Civil Code shall not give rise to the rights provided in this article in favour of any person claiming a right of legitim.
(2) Where a trustee becomes bankrupt, or insolvent, or upon his property becoming liable to seizure or similar process of law,
his creditors shall have no right or claim against the trust proper ty except to the extent that the trustee himself has a claim
against the trust.
(3) The court may make an order or directive as it deems fit in the circumstances of the case upon an application made under this
section by any beneficiary or creditor as the case may be.
Following trust property and bankruptcy of trustee.
Added by: XX. 1994.4.
Amended by: XIII. 2004.28.
Cap. 16.
(a) in respect of any fraud to which the trustee was a party or to which he was privy; or
(b) for the recovery from the trustee of trust property in his possession or control or previously received by the trustee and converted
to his use,
shall not be barred by prescription except by the lapse of thirty years.
(2) Without prejudice to the provisions of subarticle (1), no action may be brought against a trustee by a beneficiary for
breach of trust after the lapse of three years -
(a) commencing from the date of the delivery of the final accounts of the trust to the beneficiary; or
(b) commencing from the date on which the beneficiary first had knowledge of the occurrence of the breach of trust,
whichever is the earlier date.
(3) Where the beneficiary is a minor the periods referred to in th is section shall n o t begi n to run until the day on whi c
h the beneficiary ceases to be a minor.
(4) The periods mentioned in this section shall be interrupted if a judicial act or demand is filed in the competent court and
served on the trustee before the expiration of the said period.
Limitation of action.
Added by: XIII. 2004.29.
Trustees. Amended by: XX. 1994.4. Substituted by: XIII. 2004.29.
Requirements for authorisation of trustees.
Amended by: XX. 1994.4. Substituted by:
XIII. 2004.29. Amended by: XII. 2006.60;
L.N. 424 of 2007; L.N. 355 of 2008; III. 2009.12;
XV. 2009.49; X. 2011.10.
REGULATION OF TRUSTEES
(a) receives or is entitled to remuneration for so acting, or
(b) does so on a regular and habitual basis, or (c) holds himself out to be a trustee,
shall require authorisation by the Authority in terms of this Act irrespective of the proper law of the trusts they hold and whether
or not all or part of the trust property is in Malta:
Provided that in the event of reasonable doubt as to what constitutes acting as a trustee on a regular and habitual basis, the matter
shall be conclusively determined by the Authority.
(2) The Authority may issue rules to establish when trustees are considered as receiving remuneration, when activity is done on
a regular or habitual basis and when a person holds himself out as a trustee.
(3) Any person, whether an individual or a company may apply in writing to the Authority to be authorised as a trustee and the
Authority may grant authorisation upon being satisfied that the cond it io ns laid d o wn in t h i s art i cle have been met an
d such authorisation may be general or may be rest ri cted to particular specified activities.
(4) The conditions referred to in the preceding subarticle are that:
(i) in the case an applicant is a company:
(a) its objects include acting as trustee and carrying on activities ancillary or incidental thereto, and does not include
objects which are not compatible with the services of a trustee; and
(b) its actual activities are compatible and connected with the services of a trustee; and
(c) the directors of the company are not less than three in number and are individuals who are approved persons; and
(d) the company has established adequate systems for maintaining proper records of the identity and residence of beneficiaries,
the dealings and the assets in connection with trusts and compliance with applicable law; and
(e) every person who has a direct or indirect interest in the company, is an approved person; and
(f) the name of the company is not inconsistent with its trustee activity; and
(g) where the company is not registered in Malta, that company must be constituted or incorporated in an approved
jurisdiction;
(ii) in the case of an applicant who is an individual that such individual -
(a) is resident in Malta or operating in Malta; (b) is an approved person; and
(c) has established adequate systems for maintaining proper records of the identity and residence of beneficiaries,
and of the dealings and the assets of trusts and compliance with applicable law.
(5) A trustee shall notify the Authority of any change or circumstance which would have a bearing upon his status as
an authorised person and in the case of a corporate trustee, of any chan ge in it s charter , statu t e, memor a n d u m or articles
o f association or other instrument constituting the company, directors or members, and in case of companies registered in Malta
such changes shall not be registered unless and until they are so notified to and approved by the Authority.
(6) (a) The following persons shall not be required to obtain authorisation in terms of this Act to act as a trustee in the course of carrying
on the activities for which they are licenced:
(i) a person who is in possession of a valid licence issued in terms of the Banking Act; or
(ii) a person who is licenced in terms of the Investment Services Act to hold clients’ monies or assets; or
(iii) a person who is authorised in terms of the Insurance Business Act or enrolled in the Brokers List under the Insurance Intermediaries Act to hold clients’ monies or assets; or
(iv) a person with an equivalent licence to (i) to (iii) issued by the relevant regulatory authority in an approved jurisdiction;
or
(v) a person who is in possession of an authorisation to operate a central securities depository in terms of the Financial Markets Act.
(b) A person approved by the Authority for Transport in Malta to act as a trustee of a shipping trust or a shipping foundation
as defined in article 84Z of the Merchant Shipping Act shall not require any further authorisation in terms of this Act;
(c) A person registered in terms of the Special Funds (Regulation) Act to act as a trustee to retirement schemes shall not require further authorisation in
Cap. 371. Cap. 370.
Cap. 403. Cap. 487.
Cap. 345.
Cap. 234.
Cap. 450.
Cap. 370.
terms of this Act provided that such trustee services are limited to retirement schemes.
(7) Without prejudice to the obligation of any person to obtain authorisation in terms of any other law which may be applicable,
the provisions of this article and article 43A shall not apply -
(a) to a person when acting as a trustee under trusts created for the purpose of holding security in the form of hypothecs,
pledges, assignments, mandates or otherwise, granted in relation to any financial transaction for the benefit
of lenders or other creditors in such transaction;
(b) to a person when acting as trustee of any movable property held as security and for the benefit of persons whose entitlement
is conditional or determinable in terms of the trust or the contract in relation to which the holding was created;
(c) to a liquidator, curator in bankruptcy or court appointed administrator acting in the course of the liquidation,
bankruptcy or administration;
(d) to a person in possession of a warrant to carry out the profession of an advocate, notary public, legal procurator
or certified public accountant but only if acting as a trustee is limited to what is necessary and incidental in the course of
carrying out his profession and does not otherwise hold himself out as a trustee to the public; provided he shall be obliged to
maintain proper records of clients’ assets for a period of not less than five years or longer period as established by any other
law governing his profession;
(e) to persons when acting as trustees of a unit trust which is a collective investment scheme which is recognised in terms of the
Investment Services Act or which is exempt from licensing in terms of the said Act and the establishment of which is notified to the Authority;
(f) to an individual acting as a trustee under charitable trusts provided he is not remunerated and does not hold himself
out as providing such services;
(g) any person acting as a co-trustee when another trustee or, if more than one, the majority of the trustees are authorised in terms
of this article;
(h) to companies or other legal entities, established in an approved jurisdiction, the directors of which must be approved persons,
and which are wholly owned, including as trustees, and controlled by authorised trustees in terms of this
article and which are established solely for the purpose of holding trust property and ancillary acts, the details
of which are notified in writing to the Authority by an authorised trustee;
(i) to a party to a contract who agrees to receive or hold
property as trustee in the context of or ancillary to the performance of a contract provided that the trustee does not otherwise
hold himself out as a trustee to the public and is not remunerated therefor;
(j) to a person holding one or more shares in a company registered in Malta when such shares do not have any special voting rights
and their aggregate nominal value does not exceed five euro or its equivalent in any other currency.
(8) A person herein referred to may apply to the Authority and the Authority shall authorise in terms of this article:
(i) a person with a licence or authorisation equivalent to subarticle (6)(a)(i) to (iii) issued by the Authority or the relevant regulatory authority in an approved jurisdiction and who will be acting
as trustee not in the course of its ordinary business for which they are licensed;
(ii) a person having a licence or authorisation to act as a trustee issued by the relevant regulatory authority in an approved
jurisdiction; or
(iii) a person registered under the Special Funds (Regulation) Act as a retirement scheme administrator:
Provided such person whether Maltese or foreign notifies the Authority, in writing, of its intention to act as a trustee in Malta
at least forty-five days prior to commencing activities in Malta, and who receives a confirmation from the Authority that it does
not object thereto.
A notification under this subarticle shall outline the proposed activities and shall be accompanied by such information
as may be required by the Authority from time to time.
To the extent that the Authority lays down any restrictions or conditions for such activities, on initial response to a notification
or at any other time, such restrictions and conditions shall come into effect as stated in the response or by subsequent notice
of the Authority.
(9) (a) The holding upon trust of -
(i) securities or interests in or issued by a Maltese legal entity, other than securities which are listed or traded on a regulated
market or on a multilateral system established in Malta or in a recognised jurisdiction; or
(ii) immovable property in Malta,
(hereafter referred to as "relevant property") by trustees who are not authorised shall be permitted only if
a person -
(aa) authorised in terms of subarticles (3) and
(8), or
Cap. 450.
Cap. 345.
(bb) not required to be authorised under subarticle (6)(a) and (c) and (7)(e), (g) and (h),
(hereafter referred to as a "qualified person") is engaged in writing by the trustee to carry out the
compliance functions referred to in paragraph (b) on an indefinite basis with specific reference to such relevant property and such agreement is notified to the Authority
prior to any acquisition of such relevant property taking place and shall be accompanied by such information as may
be required by the Authority from time to time;
For the purposes of this paragraph:
(i) "recognised jurisdiction" shall mean:
(a) an EEA State, an EU Member State, or
Switzerland;
(b) any country that is a member of the Organisation for Economic Co-operation and Development (OECD);
(c) a country that is a signatory of the IOSCO Multilateral Memorandum of Understanding; or
(d) any other jurisidiction with whom the Authority has a Memorandum of Understanding covering securities;
(ii) "regulated market" and "multilateral system" shall have the same meaning assigned to them by the Financial
Markets Act.
(b) The qualified person shall ensure due compliance with all fiscal, prevention of money laundering and other legal obligations
in connection with relevant property and shall notify the Authority in the event that he resigns, has his engagement terminated
or is otherwise hindered in performing his duties hereunder.
(c) Paragraphs (a) and (b) shall also apply to the holding of relevant property by a mandatory for another person.
(d) If at any time there is no qualified person to carry out the functions as required by this subarticle, the Court may appoint
a qualified person on the application of the Authority or any interested person.
(e) The Authority may issue rules from time to time prescribing the form and conditions of such notification
and functions of qualified persons.
(10) No transactions in relation to relevant property, including assi gnments of beneficial interest s in a trust , shall take p
l ace without the prior written consent of a qualified person:
Provided that nothing in this article shall imply that a q u ali f ied per s o n i s hi mself a t r ust ee or th at
h e is j o in tly and
severally liable for the performance of obligations of the trustee in relation to relevant property or related transactions.
(11) The requirement for a qualified person shall not apply -
(a) to the holding of one or more shares in a company when they do not have any special voting rights and their aggregate nominal
value does not exceed five euro or its equivalent in any other foreign currency; or
(b) to the holding by trustees named and appointed by a will creating the trust in respect of the initial period of six months from
the date of acceptance by the trustee in respect of the estate of the testator unless it is necessary to enter into any
transaction in relation to relevant property, other than the initial transfers or declarations by the trustee to assume
ownership and control of the trust property, in which case a qualified person shall be appointed prior thereto.
(12) Without prejudice to the nature of the legal relationship in an y parti cu lar case, fo r the p urposes of t his article, any
person who -
(a) acts as a mandatory in the holding of property for another person; or
(b) acts as an administrator, a trustee, director or similar functionary, exercising control over the assets, by whatever
name he may be called, of a private foundation,
sh al l, not being a person referre d to i n subarticle (6), require authorisation in terms of this article, irrespective of the extent
of his activities, whether remuneration is payable therefor or whether he holds himself out as providing such services or not.
For the purposes of this subarticle a "private foundation" is a foundation established or operating in Malta for the benefit
of a private interest or purpose which is not charitable.
(13) Every person who acts as a director of a legal entity as referred to in subarticle (7)(h) and (8)(b), who receives property by way of trust from a trustee to retain it on behalf of such trustee, shall be an approved person.
(14) Nothing in this article shall imply that a person held to be a trustee under a constructive or resulting trust or as a result
of any statutory provision or judicial declaration has acted in breach of this Act during any period prior to his becoming aware
of such trusts and in such a case it shall be a defence against prosecution under this Act to prove that the said person was unaware
of his duties hereunder.
Private trustees and notarial procedure. Added by:
XX. 1994.4. Substituted by: XIII. 2004.29.
Amended by:
L.N. 424 of 2007.
Cap. 55.
Notarial Profession and Notarial Archives Act.
(2) An individual who agrees to act as a trustee because -
(a) he is related to the settlor, by consanguinity or affinity in the direct line up to any degree or in the collateral line up to
the fourth degree inclusively, or
(b) he has known the settlor for at least ten years and, in both cases,
(i) is not remunerated, even indirectly, except as permitted by any rules issued by the Authority;
(ii) does not hold himself out as a trustee to the public, and
(iii) does not act habitually as trustee, in any case in relation to more than five settlors at any time,
(hereafter referred to as a "private trustee") may act as a trustee without the need for authorisation in terms of the preceding
article, subject to the conditions stated in subarticle (3).
(3) A private trustee shall be permitted to act as trustee under the following conditions which shall apply as the case may be:
(i) in the case of a testamentary trust, that within six months of accepting to act as trustee, he shall draw up an inventory
by notarial deed in terms of Part IIIA of the Notarial Law and shall declare in the deed that the inventory includes all
the property under the trust and an extract of the will containing all the terms of the said trust shall be annexed to the said notarial
deed;
(ii) in the case of an inter vivos trust, the trust must be created by a notarial trust deed;
(iii) where property, other than immovable property, is added to the trust by a settlor or any other person, in terms of article
10 or by declaration of the trustee, such addition shall be recorded by a notarial trust deed on delivery of the additional property
to the trustee, if practicable, but in any case not later than fourteen working days of receipt of such property by the trustee.
In the case of immovable property the addition of property shall be carried out by a notarial act, an authenticated copy of
which shall be delivered to the depository notary for safekeeping and registration with the trust documents within such
time;
(iv) records of meetings with beneficiaries, advisors or protectors, the exercise of discretion by the trustee in appointing
or removing a beneficiary, in reducing, distributing or advancing trust property, in the termination of the trust for
any reason, or other material events shall be rendered in writing and shall, together with any
annual accounts and Court decrees, orders, declarations or directions which may be issued in relation to trust property,
be delivered to the depositary notary;
(v) in all cases, the trustee shall declare the facts applicable to himself to show that he does not require authorisation to
act as a trustee in terms of this Act and is not disqualified in terms of article 53, after the notary has warned him as to the
importance of the truthfulness of such declarations;
(vi) in the case of a trust relating to relevant property for the purposes of article 43(9), the depositary notary shall ascertain
that the provisions of article 43 are observed by the trustee.
(4) Where the trustee is a private trustee, the notary public who publishe s a will containing a te sta m e n tary trust or receives
a notarial trust deed inter vivos shall be the sole depository of all acts referred to in the preceding subarticle and such notary shall be known as the depository
notary:
Provided that if such notary public is appointed as a trustee in the deed creating the trust and accepts to so act, such notary shall
ensure that the deed of trust names another notary public to carry out the functions of the depositary notary.
(5) Notwithstanding any other law relating to the profession of notaries public, a notary who receives a will or notarial trust
deed shall not be precluded from being appointed as the trustee in such deed but if a notary is a trustee he may not act as the depository
notary or the notary keeper:
Provided that should the depositary notary be appointed trustee subsequent to the creation of a trust, his acceptance to act
shall be conditional on such notary delivering all trust documents to another depositary notary to the satisfaction of the Authority
and as provided in subarticle (9).
(6) All documents relative to a trust shall be submitted to the depository notary within fifteen days of coming into existence
or of com ing into possession of the trustee or of the date of relevant event to which the document refers, as the case may be. On
receipt of any such document the notary shall declare in writing on the document the date, time, and place of receipt. Such declaration
shall, until the contrary is proved, be evidence of its content. All such documents shall be held for safekeeping and registration
in the manner as may be laid down by the Authority from time to time.
(7) The trust deed and all documents relative to a trust filed wit h a depo si tory not ary sh all be co nfiden tial . Th e dep
o sit o ry notary shall not be obliged to provide information on the trust deed or any other document relative thereto except as
provided by this Act and with the written consent of the trustee or upon an order of the Court.
(8) Where in terms of Notarial Law a notary keeper has been
appointed instead of the depository notary, the notary keeper shall be the depository notary relative to the trust and a reference
to the depository notary in thi s o r any oth e r law shall be construed accordingly.
(9) The trustee may, by notice in writing to the notary and to the Authority, substitute the depositary notary or the notary keeper
in his capacity as the depositary notary and the latter shall deliver to the substitute depositary notary all documents in his possession
in the p r eced i ng sub a rticles and, in case of publ ic deeds, authenticated copies thereof and this within thirty days from the
date of the receipt of such notice, unless otherwise ordered not to do so by the Auth ority. The su bst ituted not ary may request
a written receipt and keep copies of the documents delivered to the appointed depository notary but shall keep such copies secure
and in strict confidence and shall not provide access to any person other than the serving depository notary, the trustee or the
Authority.
(10) A notary who fails to observe the provisions of this article shall be guilty of an offence and shall on conviction be liable
to a fine (ammenda) of not less than one hundred and sixteen euro and forty-seve n cents (116 .47) and no t more than tw o hundred and thirty-two euro
and ninety-four cents (232.94):
Provided that no proceedings shall be instituted where the notary, upon a notice in writing by the Authority admits liability to pay
such fine at its maximum amount.
(11) When a trust is created in accordance with the provisions of this article, the trustee shall remain subject to the requirements
set out in relation to the depository notary until the termination of the trust even if the trustee becomes authorised or is substituted
by a trustee authorised or not required to b e aut h or ised in t e rm s o f article 43.
(12) When a trust is not created in accordance with the provisions of this article and a private trustee is subseque
ntly appointed to office, it shall be a condition to his acceptance to act that a notarial deed of acceptance be executed in such
manner that the provisions of this article are observed as far as possible at that stage, reference being made to the settlor for
the purposes of the note of enrollment and a full inventory, of the trust property being transferred to the trustee, being attached.
(13) If any person wishes to create a trust and appoints a trustee other than a private trustee and also wishes that the provisions
of this article apply, such person may choose to do so by notifying the notary public that it is his wish that the provisions of
this article apply and that th e notary act as depository notary u nder the provisions of this article. In such case the notary shall
request the trustee to declare, in lieu of the declaration in subarticle (3)(v), that he is authorised, or not required to be authorised,
in terms of article
43 and is aware of his obligations under this article. In such cases the requirement of article 50 of the Notarial Law to the effect
that
the Notary registers a note of enrollment relating to the creation of the trust shall not apply if the settlor expressly exempts him
from
such duty.
(14) In all cases the Court may exercise the power to appoint, remove, substitute and give directions to a depositary notary on the
application of the depositary notary, any interested person or the Authority.
APPLICATION, GRANT, REVOCATION, ETC., OF AUTHORISATION
(a) contain or be accompanied by such information and particulars, in addition to those required by this article, as the Authority
may require or as may be prescribed;
(b) be verified in the manner and to the extent required by the Authority, or as may be prescribed;
(c) contain the address in Malta for service on the applicant of any notice or other document required or authorised
to be served on him by or under this Act;
(d) be accompanied by such fee as may be prescribed in respect of the authorisation applied for.
Substituted by: XIII. 2004.29.
Application for authorisation. Amended by: XIV. 1989.8; XX. 1994.4. Substituted by: XIII. 2004.29.
(2) In granting authorisation the Authority may subject it to such conditions as it may deem appropriate, and having granted
authorisation it m a y, from time to time, vary or revoke any condition so imposed or impose new conditions.
(3) When considering whether to grant or refuse authorisation the Authority shall, in particular, have regard to:
(a) the protection of settlors and beneficiaries; and
(b) the protection of the reputation of Malta taking into account Malta’s international commitments; and
(c) the promotion of competition and choice.
(4) Without prejudice to the provisions of article 43(8), the Authority shall notify any applicant of its decision whether
to grant or refuse to grant the licence applied for within three months from the receipt of a complete application made in compliance
with the applicable provisions of this Act.
(5) Any requirement in this Act that a person be an approved person to carry out certain activities or functi ons shall be interpreted
as a requirement that, in the case of a legal entity, any director or officer of such person, and, in the case of a trust, each o
n e of its t r ustees, be an app r oved person t o carry out such activities or functions.
Power to refuse or grant authorisation. Amended by:
XX. 1994.4. Substituted by:
XIII. 2004.29.
Power to cancel or suspend authorisation. Amended by:
XIV. 1989.9. Substituted by:
XIII. 2004.29.
(a) if it considers that the holder thereof is not or is no longer an approved person to act as a trustee; or
(b) if it considers that the holder thereof does not fulfil the requirements of, or has contravened, any of the provisions
of this Act or of any rules or regulations made thereunder, or has failed to satisfy or comply with any obligation or condition
to which he or the authorisation is subject by virtue of or under this Act; or
(c) if the Authority has been furnished by or on behalf of the authorised trustee with information which is false, inaccurate or misleading;
or
(d) if the authorised trustee has not commenced activities within the term which may be provided for in the authorisation
or has ceased to provide such service; or
(e) if it considers it desirable to cancel or suspend the authorisation for the protection of the general public or the reputation
of Malta taking into account Malta’s international commitments; or
(f) at the request of the authorised trustee; or
(g) in any other circumstances under which the Authority would have been precluded from issuing an authorisation
under this Act or where it would have been entitled to refuse the grant of such authorisation.
Notification of proposed refusal, variation, cancellation or suspension of an authorisation. Added by:
XX. 1994.4. Substituted by:
XIII. 2004.29.
(a) to vary any condition to which the authorisation is subject or to impose a condition thereon; or
(b) to refuse an application for an authorisation or to cancel or suspend an authorisation,
it shall give the applicant or, as the case may be, the authorised trustee notice in writing of its intention to do so, setting out
the reasons for the decision it proposes to take.
(2) Every notice given under subarticle (1) shall state that the recipient of the notice may, within such reasonable period after
the service thereof as may be stated in the notice, being a period of not less than forty-eight hours and not longer than thirty
days, make representations in writing to the Authority giving reasons why the p ropo sed decisio n shou ld not be tak en , and t
he Au thority shall co nsi d er an y represent a tio n so m a d e befo re arr i v i ng at a fi nal decision.
(3) The Authority shall as soon as practicable notify its final decision in writing to the applicant or the authorised trustee,
as the case may be.
(a) to furnish to the Authority, at such time and place and in such form as it may specify, such information and documentation as
it may require with respect to any such activities as aforesaid;
(b) to furnish to the Authority any information or documentation aforesaid verified in such manner as it may specify;
(c) to attend before the Authority, or before a person appointed by it, at such time and place as it may specify,
to answer questions and provide information and documentation with respect to any such activities as aforesaid.
(2) The Authority may take copies of any documents furnished or provided under this article.
(3) Where the person required to provide information or d o cumentat ion und er thi s article do es not h a ve the relevan
t information or documentation, he shall disclose to the Authority w h ere, to the b e st of h i s k now ledge, th at in formati
on o r d o cu ment ati on is, and t h e Auth ority may requ ire an y person, whether indicated as aforesaid or not, who appears
to it to be in possession of that information or documentation, to provide it.
(4) A statement made and documentation provided in pursuance of any requirement under this article may be used
in evidence against the person making the statement or providing the documentation as well as against any person to whom they relate.
(5) Except as provided for in article 642(1) of the Criminal Code and of article 588(1) of the Code of Organization and Civil Procedure, th e pr ov i s io n s of t h is article shall apply to all information or documentation notwithstanding the provisions of the
Professional Secrecy Act.
(6) The power to require the production of documentation under the provisions of this article shall be without prejudice
to any l i en or char ge claimed by an y person in r e latio n to such documentation.
(7) Where the Authority has appointed a person under subarticle (1)(c), such person shall, for the purposes of carrying out his functions under his appointment, have all the powers conferred on the Authority
by this article and a requirement made by him sh all be deemed to be and have the same force and effect as a requirement of the
Authority.
XIII. 2004.29.
Power to require information. Amended by: XIV. 1989.10; XX. 1994.4. Substituted by: XIII. 2004.29.
Cap. 9. Cap. 12.
Cap. 377.
Power to issue directives. Amended by: XIV. 1989.11; XX. 1994.4. Substituted by: XIII. 2004.29.
(2) Without prejudice to the generality of the foregoing provisions of this article, a directive under this article
may -
(a) require anything to be done or be omitted to be done, or impose any prohibition, restriction or limitation, or any other requirement,
and confer powers, with respect to any transaction or other act, or to any assets, or to any other thing whatsoever;
(b) require that any person having functions of a trustee be removed or replaced by another person acceptable to the Authority;
(c) require a trustee to cease operations and to wind up its affairs, in accordance with such procedures and directions
as may be specified in the directive, which may provide for the appointment of a person to take possession and control of all
documents, records, assets and property belonging to or in the possession or control of the trustee.
(3) The power to give directives under this article shall include the power to vary, alter, add to or withdraw any directive, as
well as the power to issue new or further directives.
(4) Where the Authority is satisfied that the circumstances so warrant, it may at any time make public any directive it has given
under any of the provisions of this article.
Exchange of information and collaboration. Added by:
XIII. 2004.31.
Cap. 330.
49. (1) In relation to trustees, the provisions of article 17 of th e Malta Financial Services Authorit y Act shal l apply muta tis mutandis.
(2) The Authority may exercise the powers granted to it by virtue of this Act at the request of or for the purposes of assisting
an overseas regulatory authority:
(a) where the assistance is required by the overseas regulatory authority for the purposes of the exercise of one or more of
its regulatory functions; or
(b) where so required within the terms of Malta’s international commitments; or
(c) where so required within the terms of undertakings assumed in bilateral or multilateral agreements for the exchange
of information and other forms of collaboration with overseas regulatory authorities including a request
under a memorandum of understanding concluded with the Authority.
p r odu ci ng, i f requi red , ev idence of h i s auth ority, may enter premises occupied by a person on whom a notice has been served
under thi s Act for the p u rp ose of obtai ning the inform ation or documents required by that notice, or otherwise for the purpose
of the investigation, and of exercising any of the powers conferred upon it.
(2) Where any officer, employee or agent of the Authority has reasonable cause to believe that if such notice as is referred to
in subarticle (1) were served it would not be complied with or that any documents to which it could relate would be removed, tampered
wi th o r de stroy ed , su ch pe rso n m ay, on prod uci n g, i f req ui re d, evidence of his authority, ente r any premises referred
to in su barti c l e (1) fo r th e purpose of obtai ning fro m t h ere any info rmati on or docum ents specified in the au thori
t y, being information or documents that could have been required under such notice as is referred to in subarticle (1).
(3) For the purposes of any action taken under the provisions of t h is article, the Au thori t y may requ est t h e assistance
of the Commissioner of Police, who may for such purpose exercise such powers as are vested in him for the prevention of offences
and the enforcement of law and order.
Amended by: XX. 1994.4. Substituted by: XIII. 2004.32.
SANCTIONS
(2) Any person who for the purposes of, or pursuant to, any of t h e pro v isi ons of this Act or of any ru les or regulat ions
made thereunder, or any condition, obligation, requirement, directive or order made or given as aforesaid, furnishes information
or makes a statement or declaration which he knows to be inaccurate, false or misleading in any m a t e ri al resp ect, or recklessly
furn ishes in formation or makes a statement which is inaccurate, false or misleading in any material respect, shall be guilty of
an offence.
(3) Any person who with intent to avoid detection of the com missio n of an offence under this Act, rem oves, destroys,
conceals or fraudulently alters any book, document or other paper, shall be guilty of an offence.
(4) Any person who intentionally obstructs a person exercising rights conferred by this Act shall be guilty of an offence.
(5) Any person who acts or purports to act as a trustee in Malta w ith out bein g aut hori s ed to do so b y t h e Au tho r ity,
when so required in terms of this Act, shall be guilty of an offence.
(6) Any person who is guilty of an offence under subarticles
Added by: XIII. 2004.32.
Offences. Amended by: XIV. 1989.12. Substituted by: XIII. 2004.32. Amended by:
L.N. 424 of 2007; X. 2011.11.
(1), (2), (3), (4) and (5) and, saving any higher punishment which may be provided under any other law, shall be liable, on conviction,
to a fine (multa) not exceeding four hundred and sixty-six thousand euro (€466,000) or to a term of imprisonment not exceeding four years, or to
both such fine and imprisonment.
(7) Where a trustee contravenes or fails to comply with any of the conditions imposed in an authorisation issued under article
43, or the conditions imposed in article 43A, or contravenes or fails to comply with any directive, obligations or other requirement
made o r giv e n b y t h e A u th ority, th e Au tho r i t y may im po se an administrative penalty which may not exceed
one hundred and fifty thousand euro (€150,000) for each infringement or failure to comply, as the case may be.
(8) A breach or non-observance by any person of any provision of this Act relating to the authorisation of such person to act as
a trustee or otherwise shall not in any manner prejudice the validity or enforceability of a trust or affect the duties and responsibilities
of such person in terms of this Act.
Added by: XIII. 2004.32.
Power to issue rules.
Amended by: XX. 1994.4.
Substituted by: XIII. 2004.32.
Disqualification orders.
Added by: XX. 1994.4. Substituted by:
XIII. 2004.32. Amended by: X. 2011.12.
RULES
(2) The Authority may also issue rules to establish which activities constitute administrative services in relation to trusts and to establish the criteria for the conduct of these activities.
(2) The court, upon the application of the Authority or any interested person, may also make a disqualification order against
any person if it is satisfied that his conduct as a trustee of a trust, either taken alone or taken together with his conduct as
a trustee of any other trust or trusts, makes him unfit to be a trustee.
(3) A disqualification order made under this article may be for a minimum period of one year and a maximum period of fifteen
years.
(4) For the purposes of this article, a disqualification order is
an order whereby a person shall not, without leave of the court - (a) be a trustee of a trust or a private foundation; or
(b) be delegated any functions, duties or powers of a
trustee; or
(c) perform or exercise any functions or otherwise act in a fiduciary capacity in relation to a mandate, trust or a private foundation.
(5) A notice of a disqualification order made under this article shall -
(a) be delivered by the Registrar of Courts to the
Authority;
(b) be furthermore recorded in a register to be kept for this purpose by the Authority and which shall be open for public inspection.
(6) Any person who, while being subject to a disqualification order, acts in contravention thereof, shall be guilty of an offence
and liable on conviction to a fine (multa) of not more than forty- seven thousand euro (€47,000) o r i m p r i s o n m e n t f o r a t e r m n o t exceeding three years
or to both such fine and imprisonment.
(7) The provisions of this article shall be without prejudice to any other offences or remedies which may exist under any other
law.
(a) he is interdicted or incapacitated or is an undischarged bankrupt;
(b) he has been convicted of any of the crimes affecting public trust or of theft or of fraud or of knowingly receiving property
obtained by theft or fraud;
(c) he is a minor; or
(d) he is subject to a disqualification order under article
53.
Persons not qualified to act as trustees.
Added by: XIII. 2004.33.
APPEALS
55. (1) In this article, the "Financial Services Tribunal" means the Tr ibu n al est a b lished in t e r m s of article 21
of t h e Malta Financial Services Authority Act, and the term "Tribunal" shall be construed accordingly; and the provisions of the said article 21 shall , except in so
far as any of them i s i n compatib le with t h e provisions of this article, apply to appeals made to the Financial Services Tribunal
under this Act.
(2) Any person who is aggrieved by a decision of the
Authority -
Added by: XIII. 2004.33.
Appeals. Added by: XIII. 2004.33. Cap. 330.
Cap. 330.
(a) to refuse the issue of an authorisation;
(b) to impose or vary any condition of an authorisation; (c) to impose or vary any restriction;
(d) to revoke an authorisation;
(e) to make any order under this Act,
may appeal against the decision to the Financial Services Tribunal within such period and under such conditions as are established
under the Malta Financial Services Authority Act.
(3) An appeal against a decision of the Authority shall not suspend the operation of that decision.
Meaning of term trustee.
Added by: XIII. 2004.33.
43(12).
Power to make regulations or rules.
Amended by: XX. 1994.4;
XIII. 2004.30.
Cap. 12.
GENERAL PROVISIONS
(a) provide for the returns, statements, and notices to be made or given for any of the purposes of this Act, and the form and contents
thereof;
(b) regulate the conduct, duties and other obligations of trustees, including the returns, statements and other information they
are to submit to the Authority, and establish the maximum amount which, notwithstanding any provision
of this Act, may be charged as fees by such trustees;
(c) alter any fees established by any provision of this Act, and amend any such provision accordingly to reflect changes in the
cost of living or in the value of currencies, and establish such other fees as may be deemed appropriate in respect
of any matter for which a fee is not provided by this Act:
Provided that no alteration of any fees shall have effect before the expiration of one year from the publication of such
alteration in the Gazette;
(d) make rules of court for any purpose of this Act and of proceedings thereunder, providing by such rules for any matter referred
to in section 29 of the Code of Organization and Civil Procedure;
(e) to further regulate the activities of trustees as well as the services provided and activities carried on or in conjunction therewith
or in relation thereto, providing for any matter he may deem expedient including the
creation and exercise of rights by or for the benefit of the beneficiaries or settlors and the imposition of duties and obligations
on persons authorised to act as trustees;
(f) to establish the requirements relating to the books of account to be maintained by trustees, the form and content of
accounts which trustees are obliged to prepare, which accounts have to give a true and fair view of the assets under
trusts, the requirements of review or audit on such accounts, the duties of auditors who may be engaged and related matters;
(g) to exempt any activities or classes of persons from the requirements of articles 43 and 43A and to impose conditions
he may deem fit for eligibility for exemption;
(h) without prejudice to any rules which may apply in terms of the Investment Services Act, to establish rules applicable to the responsibilities of trustees of unit trusts under this Act, the issue of units, the rights
and responsibilities of unit holders and any other matters which may need to be regulated relating to unit trusts;
(i) to regulate any matters in connection with the use of trusts in commercial transactions, to establish conditions
for such use including the prohibition of such use, and to amend the definition of commercial transactions in the Act;
(j) to regulate any matter in relation to security trustees and security trusts, including the definition of what constitutes
fair and reasonable actions in relation to enforcement of security trustees;
(k) to regulate trusts which provide for maintenance of persons or for the provision of annuities or pensions;
(l) to regulate the accumulation of income and distribution of income and capital by trustees and ancillary
matters;
(m) to regulate the duties of private trustees and the duties and functions of depository notaries, procedures to be adopted for
the safekeeping and registration of all documents filed with such notary in relation to a trust and all ancillary matters;
(n) to regulate matters in relation to trusts created by holders of public office and such other persons as may be prescribed,
including the qualifications of the trustees, the powers of appointment of such trustees, the powers and duties of such trustees,
the rights of beneficiaries and third parties in such cases and all ancillary matters;
(o) prescribe any matter that may or is to be prescribed.
(2) Regulations made under any of the provisions of this Act may be made in the English language only.
Cap. 370.
Transitory provisions.
Transitory provisions - Act XIII of 2004:
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 (C ap. 331) as in force imme diately 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 r e gist er ed in ter m s of t h e principal Act as i n for c e immediately before the coming into force of this Part.
(3) All trusts registered prior to the coming into force of this Part shall continue to be regulated by the principal Act as in
force im med i at el y b e fo re t h e com i n g i n to fo rce of thi s P a rt fo r a maximum period of ten years from the date of
their registration and they shall continue to enjoy the rights and exemptions and other 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 period of ten years has expired prior to the coming into force of
this Part shall amend the tr ust deed in consul tation with the settlor, any protector or other interested parties so as to achieve
compliance 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 said period of ten years is due to expire on or after the coming into
force of th is Pa rt shall amend the tr ust deed in consultati on with the settlor, any prot ecto r or other interested pa rt y so
as to achie ve compliance with the principal Act as amended by this Part within a maximum period of two years from the expiry of
the said period of ten years.
(6) Notwithstanding the provisions of subarticles (4) and (5), a trustee of a registered trust may at any time prior to the lapse
of said period of ten years am end the trust deed as aforesaid to achieve compliance with the principal Act as amended by this Part
and such am endmen t sh all i m p l y a waiver of all right s and exemptions and other privileges contemplated by the provisions
of the principal Act as in force immediately before the coming into force of this Part.
Trustees of unregistered trusts.
(7) The trustee of any trust, other than a registered trust, which is in existence on the date of the coming into force of this
Part, and to which the pr ov isions of article 43(1) of the principal Act a s amended by this Part applies, shall, within two years
of such date, do all such acts as may be necessary to comply with the provisions 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 amended 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) Nothing validly done in relation to a trust prior to the 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 the prov isi on s o f th e Reco gn it io n of Tr u sts Act , no rel ati on shi p in existence prior to the coming into force
of this Part shall be treated as a trust relationship unless it unambiguously appears from the relationship that it was intended
to create a trust relationship.
(9) On the coming into force of this Part, no further licences to act as a licensed nominee shall be issued in terms of the applicable
law and all exis ting valid lice nc es issued up to such date sha ll expire upon the lapse of two years from the coming into force
of 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 business activities:
Provided that if such licensed nominee does not obtain authorisation to act as a trustee 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 licensed nominee company in terms 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 of 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
act as a trustee in terms of article 43 of the said Act, any licence issued pursuant to the applicable law shall expire and be cancelled
and shall be surrendered to the Authority.
(13) Upon the coming into force of this Part no further warrants to act as a n o mi nee compan y shall b e issu ed in term s o f
t h e
Licensed nominees.
Nominee companies.
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
o f su ch of fshore comp anies, whereup on th e nom inee company shall immediately surrender its modified warrant to the Authority
for cancellation.
(b) A nominee company solely performing the functions of liquidator as aforesaid shall not act as trustee in any mann er and sh al
l not be en titled t o 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 regulated by the principal 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, p r io r 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 principal Act as amended 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 offshore
companies and also the functions of trustee of registered trusts, the provisions of subarticle (12) shall mutatis mutandis apply to such nominee company in respec t of its fu nc ti on s o f trust ee and t he 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 lapse
of two years from the coming into force of this Part, during which 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 of assoc iat io n of any l ic ensed
no m i nee or any nominee compa ny applying for authorisation, including a change in name to the extent considered necessary, so
as to more suitably ref l ect i t s stat us, prov ided th at an y 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 or the functions as liquidator of a nominee company under
the applicable law.
Nota bene: in furtherance of the above transitory provision, note is to be taken of regulation 1(2) and regulation 3 of the Trusts 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 shall apply to fees falling due on or after
the said date. Nothing in these regulations shall be deemed to affect the liability in respect of any fees due under the Trusts Act
prior to the coming into force of these regulations."; and
"3. In article 43(7) of the Act (the reference is to the Trusts Act before its amendment by A ct 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".".
Amended by: XIV. 1989.13; XX. 1994.4. Substituted by: XIII. 2004.34.
SCHEDULE
(Articles 2 and 5A)
CONVENTION ON THE LAW APPLICABLE TO TRUSTS AND ON THEIR RECOGNITION
Article 1
CHAPTER 1- SCOPE
Th is Conv entio n specif i es th e law ap plicab le to tru s t s and g over n s thei r recognition.
Article 2
For the purpo ses of th is Con v en tion, t h e term "trust" refers to the leg a l 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 following characteristics:
(a) the assets constitute a separate fund and are not a part of the 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 is accountable, to manage, employ or dispose of the assets in accordance with the terms of the trust and the special duties imposed upon him by law. The reservation by the settlor of certain rights and powers, and the fact that the trustee may himself have rights as a beneficiary, are not necessarily inconsistent with the existence of a trust.
Article 3
The Convention applies o n ly to trusts created voluntarily and evidenced in writing.
Article 4
The Convention does not apply to preliminary issues relating to the validity of wills or of other acts by virtue of which assets are
transferred 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 the 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 t h e terms o f the inst rument
creating o r the writing evidencing the trust, interpreted, if necessary, in the light of the circumstances of the case.
Where the law chosen under the previous paragraph does not provide for trusts or the category of trust involved, the choice shall
not be effective and the law specified in Article 7 shall apply.
Article 7
Where no applicable law has been chosen, a trust shall be governed by the law with which it is most closely connected. In ascertaining
the law with which a trust is most closely connected reference shall be made in particular to:
(a) the place of administration of the trust designated by the settlor; (b) the situs of the assets of the trust;
(c) the place of residence or business of the trustee;
(d) the objects of the trust and the places where they are to be fulfilled. Article 8
The law specified by Article 6 or 7 shall govern th e vali dity of the trust, it s construction, its effects, and the administration
of the trust.
In particular that law shall govern -
(a) the appointment, resignation and removal of trustees, the capacity 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 delegate in whole or in part the discharge of their duties or the exercise of their powers;
(d) the power of trustees to administer or to dispose of trust assets, to create security interests in the trust assets, or to acquire
new assets;
(e) the powers of investment of trustees;
(f) restrictions upon the duration of the trust, and upon the power to accumulate the income of the trust;
(g) the relationships between the trustees and the beneficiaries including the personal liability of the trustees to the beneficiaries;
(h) the variation or termination of the trust; (i) the distribution of the trust assets;
(j) the duty of trustees to account for their administration. Article 9
In applying this Chapter a severable aspect of the trust, particularly matters of administration, may be governed 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 aspect of the trust
may be replaced by another law.
CHAPTER III – RECOGNITION
Article 11
A trust created in accordance with the law specified by the preceding Chapter shall be recognised as a trust. Such recognition shall
imply, as a minimum, that the trust property constitutes a separate fund, that the trustee may sue and be sued in his capacity as
trustee, and that he may appear or act in this capacity 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 recognition shall imply, in particular -
(a) that personal creditors of the trustee shall have no recourse against the trust assets;
(b) that the trust assets shall not form part of the trustee’s estate upon his insolvency or bankruptcy;
(c) that the trust assets shall not form part of the matrimonial property of the trustee or his spouse nor part of the trustee’s
estate upon his death;
(d) that the trust assets may be recovered when the trustee, in breach of trust, has mingled trust assets with his own property
or has alienated 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 immovable, or documents of t itle to th em , he shall be enti tled, in so
far as this is not pr ohibited b y or inconsistent with the law of the State where registration is sought, to do so in his capacity
as trustee or in such other way that 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 Conv en tion do es n o t prevent the appl icat ion of prov ision s of t h e law designated by the conflicts rules of the forum,
in so far as those 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 proprietary effects of marriage;
(c) succession rights, testate and intestate, especially the indefeasible shares of spouses and relatives;
(d) the transfer of title to property and security interests in property; (e) the protection of creditors in matters of insolvency;
(f) the protection, in other respects, of third parties acting in good faith.
If recognition of a trust is prevented by application of the preceding paragraph, the court shall try to give effect to the objects
of the trust by other means.
Article 16
The Convention does not prevent the application of those provisions of the law of the forum which must be applied even to international
situations, 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 provi sions of the Conven tion may be disregarded when their appl ication would be manifestly incompatible with public policy
(ordre public).
Article 22
The Conv ent i on appli e s to trusts regard less o f the date on whi c h they were
created.
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