The risk-based approach adopted by banks towards trusts and foundations was discussed in detail during FinanceMalta's first webinar of 2021, attended by over 200 participants.
"Banks in Malta: Dealing with Trusts and Foundations" was the theme of the event aimed primarily at legal and compliance officers working with banks in Malta. The objective of the event was to provide a better understanding of these structured entities, how they are regulated and accepted by banks as their customers.
The need for the webinar was brought up during the meetings of the Banking Committee, an initiative spearheaded by FinanceMalta in 2020 to address the issues experienced by financial services practitioners when liaising with banks in Malta. The Banking Committee comprises all stakeholders including the Malta Bankers' Association (MBA), the Malta Financial Services Authority (MFSA), the Financial Intelligence Analysis Unit (FIAU), the Institute of Financial Services Practitioners (IFSP), the Central Bank of Malta, Malta Enterprise, the Malta Institute of Accountants, the Chamber of SMEs, and the Ministry for Finance and Employment.
Opening the webinar, the Chairman of FinanceMalta, Rudolph Psaila, said the risk-based approach is central to the discussion on trusts and foundations: "Implementing a risk-based approach means that supervisors, credit and financial institutions, and trust and company service providers identify, assess, and understand the money laundering and terrorist financing risks to which they are exposed, and implement the most appropriate mitigation measures. This approach enables them to focus their resources where the risks are higher."
Following the Chairman's opening speech, a panel discussion focused on the understanding of the banks' position and concerns about trusts and foundations. The panel was moderated by Vanessa Macdonald from the Central Bank of Malta, and included Maruska Buttigieg Gili from BNF, Simon Micallef from APS Bank and Alexandra Sciberras from Sparkasse.
Dr Priscilla Mifsud Parker, Chairperson of STEP – Malta Branch, gave a presentation on what compliance officers at banks need to know about trusts and foundations. She was followed by Petra Camilleri, Senior Manager Trustees & CSPs at MFSA on the authority's risk-based approach towards supervision of trustees and administrators of foundations.
Carmela Loredana Umbro, Senior Officer Guidance and Outreach – Legal Affairs at the FIAU, addressed the money laundering and funding of terrorism risks associated with trusts and foundations. The legislative developments, expectations and enforcement action were presented by Geraldine Spiteri Lucas, Chief Legal Officer at the Malta Business Registry. The last speaker was Andre Toubkin, Director, Wealth Management Switzerland, Schroder & Co Banque SA, who provided an international perspective on the themes previously discussed.
The last part of the webinar featured an interactive Q&A session whereby attendees had the opportunity to actively engage with the speakers, and constructively contribute to the success of the event.
The webinar was supported by the MBA. Karol Gabarretta, Secretary General of the Association, commented: "The MBA is certainly delighted to have partnered up with FinanceMalta in organising and conducting this successful and fruitful webinar. The Association strongly believes in such events as they provide a very good platform for stakeholders from the part of both authorities and the industry, to discuss and share experiences. This dialogue also serves to enhance awareness on the technical and practical nuances which inevitably characterise the activities undertaken by all stakeholders. In this respect the MBA looks forward to further collaboration with FinanceMalta amongst others, to explore other areas of mutual interest."
On a similar note, Rudolph Psaila emphasized: "This initiative is proof that cooperation and information are fundamental. Inclusiveness represents a major part of FinanceMalta's strategy, and I am glad to see that this joint effort helped to shed light on trusts and foundations, two instruments that, if used correctly and according to regulations, are to be encouraged, rather than dissuaded."
Originally Published by Finance Malta, January 2021
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