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Other Institutions During the course of the year, the Directorate together with the Central Bank of Malta held meetings with foreign banking institutions, during which emerging issues in the global and domestic Sovereign Bond and Bills Markets were discussed. In April, the Directorate took part in a meeting of the DG – ECFIN held at the Ministry of Finance. DEBT MANAGEMENT OPERATIONS
Treasury Bills
The statutory basis for the issuance of Treasury bills is set out under Malta Treasury Bills Act, Cap.133. The maximum amount of outstanding Treasury bills is established by Parliamentary Resolution. In 2002, the maximum amount was set at Lm300 million, equivalent to €698.80 million. The issuance of Treasury bills serves a dual role - primarily to cover for temporary revenue shortfalls incurred by the Government and secondly, to maintain liquidity in the domestic Treasury bills market. Treasury bills are offered by public auction on a weekly basis, normally on Tuesday of the auction week and are issued in denominations of €1,000 with tenors ranging from 28 days, 91 days, 182 days, 273 days and 364 days. A mix of different tenors can be offered in any auction. As from 1 April 2007, Treasury bills were dematerialised and were admitted to listing and trading on the Malta Stock Exchange. Yields on Treasury bills started to be computed on an ‘Actual/360 days' basis. Chart 1 illustrates the maturity profile of the outstanding balance of Treasury bills as at end of 2010. The outstanding stock balance of €377.76 million at end of 2010 represents a decrease of €96.38 million over the amount outstanding at end of 2009. Chart 1 - Level of T-bill stocks in market hands as at end 2010 Treasury Bills Issuance Programme The issuances focused mainly on the 91-day and the 182-day tenor (representing 42.5% and 34.3% of total volume issued respectively). The primary market yields for the 91-day T-bill fluctuated between a maximum of 1.319% (on 8 January 2010) and a minimum of 0.531% (on 28 May 2010). The primary market yield of the 182-day T-bill peaked at 1.399% (on 8 January 2010) and was lowest at 0.667% (on 28 May 2010). Such interest rates for temporary borrowing are determined by the money market which in turn is influenced by the repo market rates. Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment The total offers accepted by the Treasury throughout the year 2010 amounted to €1,245.19 million, categorised by tenor and volume as shown in Table 1 below: Table 1 – Gross Issuance of T-Bills in 2010
Tenor (days) Share of total Issuance (%) Nominal Amount (€ 000) Weighted Average Yield (%)
The cost of borrowing in respect of T-Bills issued during 2010 amounted to €4.51 million, equal to a weighted average yield of 0.926% and a weighted average maturity of 141.5 days. Chart 2 shows the weighted average cost of borrowing on 3-month and 6-month T-Bills vis-à-vis the corresponding Euribor throughout the year. On average over the year, the yields of accepted Treasury bills for three month and six month tenor outperformed the average of the respective Euribor rates. Chart 2 – 3 Month and 6 Month T-Bill vs Euribor 3M T‐Bill vs Euribor
3M Rate (Accepted) 6M T‐Bill vs Euribor
6M Rate (Accepted) Redemptions on Maturity Throughout the year, the Treasury redeemed €1,341.56 million worth of Treasury bills, carrying a cost of borrowing equal to €6.03 million equivalent to a weighted average yield of 1.221%. Monthly movements in gross issuance and redemptions of Treasury bills show an increase in net issuance during the first six months of the year. This trend was however reversed in the second half of the year with the result that the total outstanding level of Treasury Bills decreased by €96.38 million by the end of the year. Malta Government Stocks
Authority to raise loans on behalf of the central government is set out in an annual budget law which authorises the Minister of Finance to raise loans for an established amount during the financial year by the issuing of securities and provides also the main purposes for which Government can apply such borrowing. For the financial year 2010, the Budget Measures Implementation Act (Act No I of 2010) established a maximum borrowing limit of €550 million in Malta Government Stock. The issuance programme was applied for the purpose of: − Financing the Central Government borrowing requirements for 2010; − Redeeming Malta Government Stocks (MGSs) maturing during the year; and − Effecting changes in Central Government debt portfolio as and when required in line with Government's debt management policies. Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment Issuance of MGS In line with the strategy announced at the beginning of the year, issuance in 2010 focused mainly on the fixed-rate euro denominated stocks with maturity horizon biased towards the longer end of the curve. As in recent years, the Directorate continued to issue fungible MGS with the aim to contribute towards further deepening in the liquidity of current benchmark issues. In each issue the price offered for members of the public is usually announced three days in advance of the opening of the applications and the results of the bids by auction are announced within two hours from closing time of auction. The total sum raised through the MGS issuance programme during 2010 reached €547.96 million. There were four MGS issues during the year, having a medium to long term maturity horizon as shown in Table 2 below. All the issues of Malta Government Stocks in the primary market attracted strong demand both from members of the public as well as from financial institutions. The November issue was over-subscribed by members of the public and was closed before the announced closing dates as there was no balance available to be auctioned through the bidding system. The last time an MGS issue was oversubscribed by members of the public dates back to November 2004. Table 2 - MGS Issued in 2010
Issuance Strategy (€ Millions) Selling Retail Wholesale In addition to the above issuances, a placement of one MGS amounting to €0.43 million towards the partial settlement of ex-church property was issued in June 2010. Distribution by investor type Securities on the market are distributed among a diverse range of investors from private investors to institutions of different groups. As at end of December 2010, securities were principally held by financial institutions and resident individuals (holding 36.1% and 27.9% respectively). Chart 3 below explains the distribution of all MGS securities on the market. Chart 3 – Distribution of securities by investor type MGS HOLDER CLASSIFICATION Resident Individuals Resident Credit Institutions AS AT DECEMBER 2010 Resident Coll. Inv. Schemes Resident Insurance Company Resident Non‐profit entitiesNon‐residents Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment Loan Facility Agreement (Hellenic Republic) Pursuant to a decision taken by the Council of EU in May 2010, the Government entered into a loan agreement with the Hellenic Republic to lend €74.54 million in tranches over a period of three years. Following discussions at ministerial level, the Directorate prepared draft legislation for vetting by the Office of the Attorney General. Subsequently, an act entitled Government Borrowing and Granting of Loans to the Hellenic Republic Act 2010 (ACT III of 2010) was enacted by Parliament in May, 2010. Under the said Act, the Treasury raised a further €30 million by issuing a 3-Year Floating Rate MGS tied to the 6-month Euribor plus a spread of 45bps. The issuance of this security was intended for the financial institutions and was fully subscribed. During 2010, two tranches amounting to €19.77 million were disbursed to the Hellenic Republic under the above-mentioned agreement. Debt Servicing During the year, four MGS with a nominal value of €191.11 million were redeemed. The outstanding nominal value of MGS as at year end reached € 3,611.46 million. Chart 4 indicates that the distribution of the MGSs maturity profile lies skewed to the left, to the extent that 40.47% (compared with 44.18% at end of 2009) of total outstanding debt matures during the period 2012-2014. In order to continue improving in this direction and obtain a relatively smooth redemption profile, strategic measures by the issuance of stocks in the 9-year to 20-year maturity bucket have been initiated. As a result of such strategic measures, the weighted average maturity (WAM) of MGSs has now reached nearly seven years compared with nearly six years for end of year 2009. Chart 4 - Outstanding MGS Profile as at 31 December 2010 MGS Maturity Profile
MALTA GOVERNMENT STOCK OUTSTANDINGPER YEAR (IN MILLIONS) Cost of Borrowing The Directorate services the half-yearly interest payments to existing stockholders which during 2010 amounted to €186.21 million. Payments of interest throughout the year were spread as illustrated in Chart 5 below: Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment Chart 5 - Monthly Distribution of Interest Payments on MGS INTEREST PAID EVERY MONTH ONOUTSTANDING MGS (IN MILLIONS) AS AT END OF 2010 Chart 6 shows that during 2010 the spreads between the 5-year and 10-year maturity period fluctuated between a high of 130 basis points (26 May) and a low of 79 basis points at the beginning of the year. The average spread for the entire year stood at 112 basis points. The spread for the 10-year to 20-year maturity remained stable from mid-June until end of October with values around 104 basis points, and then flattened in the last two months. Chart 6 – 5yr, 10yr & 20yr MGS yield performance in 2010 MGS YIELDS & SPREADS
Foreign Loans
Bilateral loans with foreign entities are specifically undertaken to finance large capital projects. A total of €13.12 million was repaid throughout the year according to the repayment schedule, resulting in an end-of-year balance of €87.70 million. Staff Training and Development
The Directorate continued to invest in the training of its human resources, both through in-house programmes and through external courses organised by local and foreign institutions. During 2010, a number of initiatives were undertaken and various opportunities were offered to its staff to attend training courses, seminars and annual conferences organised by institutions both locally and abroad. These included: − Derivatives Course, hosted by Barclays Capital; − Pan-Commonwealth Workshop on Domestic Debt Management, hosted by Commonwealth; − Managing with Leadership, organised by the CDRT; and − Anti Fraud and Corruption Train the Trainers Course organised by the Internal Audit Directorate. Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment Support Services
As in previous years, the Directorate continued to offer guidance and provide the necessary service to the heirs of deceased stockholders so that the heirs can have any inherited stocks transferred in their name by a procedure initiated through the heirs' own legal adviser. During the course of the year, the Directorate received 373 new claims from the heirs' legal advisers requesting the transmission of MGS from deceased stockholders to their clients. The Directorate settled 269 claims, out of which 214 were lodged during 2010 and 55 related to claims which were pending from previous years. Online Services
During the year, the Directorate contributed towards the revamping of the Debt Management section within the Treasury's website, making available upgraded and new information in an effort to better meet the needs of the clients. Among other things these include: − the publication of Treasury bills weekly auction results; − weekly bid analysis of Treasury bills; − tender forms for Treasury bills; − Malta Government Stocks auction results; − monthly issuance calendar for Treasury bills; − the yearly indicative issuance calendar of Malta Government Securities. Such new section was launched on 1 February 2011. Moreover, new guidelines intended for the heirs of deceased stockholders in respect of causa mortis claims will be launched later on during 2011. GOVERNMENT ACCOUNTS DIRECTORATE
Functions
The main functions of the Government Accounts Directorate of the Treasury are to maintain an effective accounting methodology and accounting systems across Government; exercise a monitoring role on the disbursements of public funds and report fairly and truthfully the financial position of Government. The Government Accounts Directorate is composed of the following two main branches: Accounting Operations; and Accounting Methodology & Control. Accounting Operations
Accounts Section The Consolidated Accounts Section of the Directorate is considered to be the executive arm of the Accountant General. The main functions of this Section are to ensure that ministries and departments adopt and maintain uniformity in the accounting system. The Section is guided in this exercise by the Financial Regulations 1966 and the Financial Administration and Audit Act 1962 as well as by circulars issued from time to time to help in the interpretation of financial policy and legislation. During the year, the Accounts Section processed local payments cheques as shown below: Cheque type
Batches Cheques Value
Energy Supp. Meas. 302,802,335
Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment As can be noted from the above table, during 2010 the Section was entrusted with the printing of the Energy Support Measures subsidies cheques. Apart from its day-to-day business, the Section also carried out additional assignments during the year including the issue of ad hoc reports requested by the Ministry of Finance, the Economy and Investment, the National Statistics Office and the Central Bank of Malta. Other reporting as required by legislation was also carried out by this Section within the established time-frames. Of particular relevance were the Section 65 Statements, the Annual Financial Report, the monthly Comparative Return of Expenditure and Revenue, and the publication on a quarterly basis of the Consolidated Fund Account. The Section also carried out other duties relating to the Public Credit, Government Loans and Investments, Investments through MGI, Trust Funds and their related Investments, Warrants and Advances, collected returns from departments on their respective Arrears of Revenue, collected and verified returns on Stores Written off/Cash Losses, and monitored Other Deposit Accounts. Cash Office As in previous years, the bank reconciliation of the Public Account was undertaken by the Cash Office. Manual reconciliation for 2010 by end of year was 67% complete. Liaison and co-ordination with MITA and departments was maintained to ensure that the process progressed smoothly. More tests on developments in the bank reconciliation system are currently being carried out. At the beginning of the year under review, Treasury launched a new data collection program to facilitate the collation of ministerial/departmental bank accounts held at the Central Bank of Malta and local commercial banks. Briefing sessions were held to the officers-in-charge from all ministries/departments. During 2010, a total of 934 stop payments and 510 Garnishee Orders were handled. Bank Transactions Unit The Bank Transactions Unit is responsible for effecting overseas and local payments. The following table illustrates the number of transactions by category effected by the Unit. Transaction Type
Value (€)
Debit Advice (Local)* Debit advice (Foreign) Letter of Credit *Debit advices issued by salaries and public debt are not included Verifications Unit The Verifications Unit was set up in 2008. The main objective of this Unit is to carry out the verification of payments being processed and other payments already processed and paid by government departments, as defined in Legal Notice 185 of 2007. The aim of the verification process is to ensure proper spending of public funds and to ensure that payments are effected according to standing financial regulations. Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment Verifications of post travel documentation on visits abroad are undertaken by the Verifications Unit. During 2010, checking of pre-travel and post-travel documentation was carried out and departments instructed, wherever omissions were noted, to abide by established procedures. A system of close co-ordination between Treasury and the Ministry was strengthened, ensuring that departments strictly followed regulations. During the year, Treasury continued with the maintenance of the 2005-2009 travel databases and enhanced the 2010 database. Verification of documents was performed on overseas travel undertaken in 2009 and 2010. A total of 4,040 visits abroad have been recorded for 2010 (374 in respect of training courses and 3,666 on official business). EU Funds Management Unit (EUFMU) The role of the EU Funds Management Unit is to ensure the efficient management and control of the EU Funds allocations. In 2010, the EU funds falling under the direct responsibility of the unit comprised the: − Transition Facility; − Structural Funds and Cohesion Fund 2004-2006 (including Cohesion Fund 2004 – 2006 and EQUAL); − ERDF, ESF and Cohesion Fund falling under Cohesion Policy 2007-2013; − External Borders, European Refugee and Return Fund falling under EU Migration Policy 2007-2013; − European Fisheries Fund (EFF); − EEA and Norwegian Financial Mechanism; − Migration Flow Funds. During the period under review, the Unit transferred payments amounting to €137,115,300, an average of €11,426,275 per monthly. The table below summarises the payments made throughout the year by respective Fund. The total figure indicated hereunder refers to bank payments processed. Total Value (€)
Transition Facility Structural Funds 2004-2006 Cohesion Policy 2007-2013 EEA & Norwegian Financial Mechanism European Fisheries Fund Migration Flow Funds The EUFMU has, during the year under review, co-operated with all the stakeholders involved with the above-mentioned funds. This co-operation included the participation in numerous meetings held both in a holistic and in bilateral circumstances. During 2010, the final payments with regard to the Structural Funds 2004-2006 Programme were processed. Following reconciliation, all the residual balance in the bank account was passed to revenue and the said bank account was closed. Accounting Methodology & Control
Accounting Methodology & Compliance Unit The Accounting Methodology & Compliance Unit is primarily responsible for collecting and checking accrual accounting returns submitted by government departments on a quarterly basis. It continuously monitors the data submitted by the departments so that if any irregularities are noted in the reporting the Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment officers concerned are contacted to clarify the issues in question. Moreover, this Unit provides continuous support when the departments contact this Unit for support while compiling the accrual accounting data. Thus, the primary objective is to obtain an accurate picture of the financial position and performance as the data collated will be used to prepare the financial statements under the accrual accounting methodology. In 2008 an Accrual Accounting Working Group (AAWG) was formed through the mandate of the Permanent Secretary MFEI. This Working Group is chaired by Treasury and other members include representatives from MITA and the Internal Audit and Investigations Department as observers. The purpose of this working group is to meet with all Directors (Corporate Services) in the ministries to scrutinise the accrual based information submitted during the year. Within this forum Directors Corporate Services and Directors Financial Management as well as other representatives from the respective ministries/departments are called to discuss and scrutinise their accrual based financial statements. Up to the timing of writing of this report, meetings were held with the Office of the Prime Minister, the Ministry for Infrastructure, Transport and Communications, the Ministry of Education, Employment and the Family, the Ministry of Finance, the Economy and Investment, the Ministry for Justice and Home Affairs and the Ministry for Health, the Elderly and Community Care. The ultimate objective of the AAWG is to ensure that the accrual accounting information submitted by the departments is correct and provide an accurate picture of the central government's financial performance and position. Another function of this Unit is the collation of the yearly End of Year Stores Written Off and Cash Losses Return and End of Year Statements of Account Arrears of Revenue Return from the ministries and departments. PENSIONS SECTION
An ancillary function that the Treasury still performs to date is the award of the pension and gratuity in terms of the Pensions Ordinance (Chapter 93). Whilst the front office is housed within the Treasury premises in Floriana, all back-office work is carried out at the Treasury branch in Gozo. The main responsibility of the section is to issue Treasury pension and gratuity to government employees who have been in continuous service since 15 January 1979, including the Armed Forces of Malta, the Correctional Services and the Malta Police Force employees. The Section is also responsible for the issuing of bonus and income supplements to eligible ex-civil service employees who are not receiving a bonus from the Department of Social Security. Treasury Pensions and Gratuities in 2010
During the year, 566 public service employees attained retirement age and were eligible for Treasury Pensions including Widows Pension. Of these, 400 were male and 166 were female. The total of deceased pensioners was 476, of whom 316 were male and 160 were female as indicated below: In 2010, the total Treasury pensions issued amounted to €70,513,152.08 and the total amount of gratuities paid was €15,033,352.18. NOEL CAMILLERI Director General (Treasury) Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment Economic Policy Department
BACKGROUND
The Economic Policy Department (EPD) provides the Government with expert advice and assistance in the formulation of economic policy and the management of economic activity, with the aim of attaining the Government's overall objectives of economic growth and development, high employment and low inflation. Attention is devoted towards the achievement of a stable macroeconomic framework, also by attaining an appropriate fiscal policy. Furthermore, the EPD assists in the formulation of policy in areas which are crucial to Malta's economic developments including competitiveness, labour market, investment, tourism, education, creativity, innovation and the environment. Within this context, the EPD provides the Government with the relevant technical input, so that the implementation of policy measures is done within the framework of Malta's economic developmental goals. The Department also provides technical advice and assistance to the Government on international economic/trade issues. Through its participation in Commission Working Parties and Trade Policy Committee formations, the Department monitors and advises on the economic/financial impact of issues and strategies concerning the EU's common commercial policy. Furthermore, the Department assists Government by providing economic analysis of policy issues emanating from Malta's participation in a host of international, regional, bilateral and multilateral institutions. The EPD also provides support to other government entities whose area of activity may be affected by EU initiatives with third countries in the area of international trade and investment. ECONOMIC STRATEGY DIRECTORATE
Budgetary Process
The EPD participates in the budgetary process by providing information on the domestic and international economic situation, the macroeconomic outlook and the EU's fiscal surveillance process. This information acts as an important input in the budgetary process ensuring that the fiscal policy stance is appropriate to the macroeconomic conditions and targets and also in compliance with EU fiscal requirements. During 2010, the Department participated in the preparation of the Pre-Budget Document 2011 Ideas, Vision, Discussion. This Directorate's work comprised detailed studies on the general macro-economic conditions, competitiveness, as well as an analysis of public finances. Throughout the year, the Department also provided an important input to the analysis of the fiscal situation and projections within the context of the EU's fiscal surveillance mechanism and the obligations of the Stability and Growth Pact. EU Economic Policy Co-ordination
The Department continued to participate actively in the EU's economic policy co-ordination processes. In particular, the Department participated in the Economic and Financial Committee (Alternates) and the Economic Policy Committee, including the Eurogroup composition of the respective committees. In Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment addition, the Department also provided support for the preparations of the Economic and Financial Committee meetings. The Department also participated in a number of working groups attached to the EPC. In particular, the EPD is actively involved in the Working Group on Ageing Populations (AWG) which examines the economic and budgetary consequences of ageing. Moreover, it also participates in other working groups of the EPC, namely the Output Gaps Working Group, the Joint EFC-EPC Working Group on the Economic and Financial Aspects of Climate Change and the Lisbon Methodology Working Group. It also monitors closely developments in the Labour Market Working Group and the Quality of Public Finances Working Group. The EPD is also engaged in the preparation of briefings for the ECOFIN and Eurogroup meetings as well as for meetings of other Council formations and for the European Council meetings, as requested. In this context, it is noteworthy that during 2010 the Department provided feedback towards and within various Committee formations contributing towards the European Council conclusions that were endorsed on 29 October which sought to reinforce economic governance in the EU. Moreover, the Department provided feedback during the still-ongoing consultation process regarding the Commission's legislative proposals to strengthen economic governance. This legislative package is set to come into force by summer 2011 so as to ensure the effective implementation of the new economic and fiscal surveillance arrangements. Finally, the Department also provided feedback on a number of reports drawn up by various EU committees having Maltese representation as well as the EU Parliament, as requested. The Department provides such feedback from an economic perspective in line and coherent with Malta's position taken in the various EU Committee meetings and Council formations mentioned earlier. During 2010, the Department continued to provide information on the domestic economic situation and on the economic policies and measures that are being pursued by Government to the EU and other relevant parties. In particular, the Department co-ordinates closely with commission officials from DG ECFIN and provides the requested information in connection with the EU's fiscal surveillance process. Bilateral meetings were held both in Malta as well as in Brussels with commission officials from DG ECFIN. In 2010, the EPD was also actively engaged in the technical economic analysis related to the EU2020 strategy and the National Reform Programme (NRP) co-ordinated by the Planning and Priorities Co-ordination Division (PPCD) with the line ministries. The EPD assisted the PPD to ensure proper co-ordination between the thematic aspects of the draft NRP and the macroeconomic aspects. The EPD was also involved in the formulation of the draft NRP submitted to the European Commission in November 2010. Due to the unfolding of the most extensive financial and economic crisis since the Great Depression, financial stability issues have increasingly featured in the EU economic policy co-ordination framework. This necessitated the strengthening of the required institutional capacity and knowledge of EPD in this area, facilitated through the undertaking of research and development by the Department. The accumulation of this knowledge helped EPD to participate effectively in discussions conducted within the EU economic policy co-ordination processes relating to financial stability. The Department also provided support for the preparations of the Financial Stability Table composition of the Economic and Financial Committee meetings, while also following discussions within the EU Financial Services Committee. Representation on the Malta Council for Economic and Social Development
The Department is represented in the Malta Council for Economic and Social Development and during 2010 it continued to participate actively in its proceedings, providing technical analysis and helping Government to adopt positions on issues which are discussed in the Council. Furthermore, as in previous years, the Economic Policy Department computed and presented the relevant cost-of-living adjustment for 2010 as stipulated in the Incomes Policy Agreement of 1990. In December, the Department presented the members of the MCESD with an update of the Inflation Report published in July. Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment During 2010, the Department also gave presentations to the Malta-EU Steering Action Committee. A second presentation (together with the Department of Social Security) dealt with the Green Paper on Pensions published by the European Commission. National Econometric Modelling
The Department has two econometric models of the domestic economy. One model is used to produce short-term forecasts for the main macroeconomic indicators. The purpose of the second model is to undertake economic policy simulation exercises and to provide a framework for medium-term forecasts. During 2010, the Department pursued work related to strengthening its econometric modelling capability. The short-term model (STEMM) was used to produce economic forecasts for spring and autumn, which were presented during the Economic Forecasts Meetings held between the Commission and the EU Member States. Discussions on these forecasts were held with Malta's desk officer in DG ECFIN. Such forecasts were also used for the preparations for the Budget. The second disaggregated model (SAMM) is being further fine-tuned in order to reflect better the realities of the Maltese economy and to modify the way in which a number of important relationships within the model are calibrated. International Institutions
The Economic Policy Department provides information on the performance of the Maltese economy as well as on Government's economic strategy to representatives of international organisations. As in previous years, the Department contributed in meetings with representatives from credit rating agencies such as Standard and Poor's, Moody's and Fitch. As the credit ratings assigned to Malta bear a direct influence on the interest rate charged on loans raised by Government, the Department assigns significant importance to its interaction with these agencies. During these meetings, the performance of the domestic economy and the policies and measures pursued by Government to address the economic challenges faced by the Maltese economy were discussed. In addition, the Economic Policy Department was an important focal point in the extensive discussions held with representatives from the International Monetary Fund (IMF) who visited Malta in November for the procedural Article IV consultation. Such visits are followed by published reports on the local economic scenario. As part of the preparations for the mission, the Department prepared a series of analysis covering various aspects of the domestic economy. Financial Stability
The EPD continued its work in monitoring developments in economic and financial conditions. In particular, this included research and regular monitoring with respect to international sovereign debt markets, the EU's and local legislative frameworks related to financial stability and the financial sector in general, studies and reports conducted by other institutions on financial stability issues, as well as developments in the local financial sector. In addition the Department also provided feedback to a number of EU Committee meetings. Pension Modelling
The EPD is represented in the Pensions Working Group set up by the Ministry of Education, Employment and the Family. During 2010, the EPD has actively provided technical input on the role of second and third pillar pensions. Work included two World Bank missions during August and September. Such visits had the objective of advising the Government on the strengths and weaknesses of the various pension reform options and in relation to that, the modelling of such reform options through the use of the World Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment Bank's PROST (Pensions Reform Simulation Toolkit) model. Furthermore, in 2010, the EPD together with the other members of the PWG visited the Pension authorities in Sweden to explore further the Swedish pension system specifically in the context of the reform proposals by World Bank Staff concerning both the first pillar and the second pillar pension. In this context, the Department contributed to the work of this working group, especially with respect to the report reviewing the pension system in Malta, tabled in the House of Representatives in December 2010. The Economic Policy Department also provided technical assistance in relation to the estimation of the updates of the Theoretical Pension Replacement Rates 2008-2048 for Malta in an exercise co-ordinated by the Indicators Sub-Group of the Social Protection Committee. Sectoral Analysis
The EPD participated in the Creative Economy working group within the MFEI providing technical input. In particular, EPD was responsible for the formulation of an Economic Report on the culture and creative industry in Malta, which is the first of its kind in Malta. EPD also participated in a number of workshops and seminars on the subject and was also active as a member in the working group in the discussions held with operators and interested bodies related to the culture and creative economy. EU Budget
EPD is represented in the Malta Group on Financial Perspectives and provides regular feedback, including briefing notes and technical papers in relation to the EU Budget issues, specifically on its financial aspects. The Economic Policy Department representatives participated in the meetings of the Core Group on the Review and Modernisation of the EU Budget which was set up with the aim to draw up a Malta Position on the new EU Budget framework which will replace the present framework. The representatives drew up and presented policy papers to this Core Group in relation to the EU Budget Reform. Research and Publications
The professional staff at the Department carries out research work on various economic, fiscal and financial topics. The Department published the Economic Bulletin in May 2010. This document provided an outline of the developments in the Maltese economy during 2009. Furthermore, during July 2010 the Department published the Inflation Report. This report detailed price developments in Malta, outlining trends in inflation, an analysis of inflation from the macroeconomic perspective as well as providing an outlook for inflation in Malta. In addition, the Department published the Economic Survey in November 2010. This document, which was presented to the House of Representatives at the beginning of discussions on Government's budgetary estimates, provides a comprehensive analysis of Malta's recent economic performance and emerging economic trends, as well as an overview of international economic developments. The Department has also participated in discussion with the Central Bank of Malta on the co-ordination of economic policy with the aim of securing an appropriate environment for economic growth. The Department regularly collaborates with the Central Bank of Malta in areas of mutual interest, as well as to discuss local economic developments and prospects. Furthermore, the Department continued to engage with similar organisations abroad. During the year the Department launched its own website, which can be accessed on www.economicpolicy.gov.mt, where detailed information about the structure, functions, and workings of the Department are available. Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment INTERNATIONAL ECONOMIC RELATIONS DIRECTORATE
Common Commercial Policy
The International Economic Relations Directorate participated, monitored and continuously analysed the developments taking place within the framework of the Trade Policy Committee to ensure that the interests of Malta are fully represented in the field of international trade policy. Trade Policy Committee
The Trade policy Committee is a trade co-ordination and advisory committee to the European Union concerning all aspects of trade policy. The Department participates actively in various formations of this Committee including the Full Members, the Services and Investment Committee, the Committee on anti-dumping/anti-subsidy, the General System of Preferences Committee and the Steel, Textiles and Other Industrial Sectors Committee and follows the developments made. The Department also shadows other specific committees including the Trade Policy Committee Deputies and ad hoc Trade Policy Committees experts meetings. The Department consults with the ministries and other government entities as well as the wider civil society to formulate Malta's positions on topics concerning international commercial policy. Trade Policy Committee - Full Members and Deputies This Committee discussed the multilateral and bilateral aspects of international trade relations that included the World Trade Organisation's Doha Development Agenda; the negotiations on a number Free Trade Agreements, most notably with Canada, India and Korea and other trade relations with other countries including the US, China and Russia. Other topics that have been discussed in this Committee included the implications of the Lisbon Treaty on EU External Trade Policy; the Regulation establishing transitional arrangements for bilateral investment treaties between Member States and third countries, the Communication towards a comprehensive European international investment policy and thematic issues such as the negotiations on Anti Counterfeiting Trade Agreement and a number of sectoral fiches. Trade Policy Committee – Services and Investment Following the entry into force of the Lisbon Treaty, some additional responsibilities were entrusted to the Services and Investment committee. In fact, the Investment aspects of international trade are now being discussed under the said consultative Committee. The Committee also continues to monitor and engage in various aspects related to international trade in services, including the analysis of services liberalisation with third countries, third country market access in services for European companies, transparency of international markets and other related issues. In particular, the Committee was involved in the negotiation of offers in services with South Korea, Canada and India. This Committee also follows developments in the World Trade Organisation on the aspect of the services negotiations of the Doha Development Agenda. Steel, Textiles and other Industrial Sectors Committee (STIS) The Department followed discussions and prepared Malta's positions on a number of sectors that have been discussed in this Committee. Topics such as chemicals, rare earths, automotive parts and ceramics were the subject of discussion during 2010. The Committee had the task to draw conclusions and policy action on EU trade in these sectors with the aim of securing EU access to raw materials and the competitiveness of EU industries. In this process the Department has sought feedback of other government entities and pertinent stakeholders as necessary. Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment Market Access Committee The Market Access Committee intensified its work to remove or reduce barriers to European exporters of goods, services and investment in third countries. As a consequence of the financial crisis, third countries have increased trade barriers with the aim of protecting their local markets. The European Commission, together with the Member States, worked to eliminate barriers to trade in third countries that may have been imposed on EU exports. About 37 barriers to trade that were introduced by third countries following the financial crisis were removed. The work of the Market Access Committee also reflects the interests of small and medium enterprises which are an important pillar of the Maltese economy. Multilateral Trade Relations
At the multilateral level, the Department continued to follow the developments taking place at the World Trade Organisation in Geneva with respect to the Doha Development Agenda negotiations. Bilateral Trade Relations
In the area of bilateral and regional trade relations, the Department consulted and co-ordinated with the competent government authorities to be in a position to formulate a policy on a number of bilateral commercial agreements that the European Union is negotiating with third countries. Some of the most important free trade agreements negotiated during 2010 included Korea, Canada, India, Malaysia, Singapore and Ukraine. EU-Korea Free Trade Agreement The negotiations for an EU-South Korea FTA were launched in May 2007 in Seoul. After eight rounds of talks, the FTA was initialled by both sides on 15 October 2009. On 16 September 2010, the European Council approved the FTA and the Agreement was officially signed on 6 October 2010 in the margin of the EU-South Korea Summit in Brussels. This Agreement is the most comprehensive free trade agreement that the EU has negotiated with third countries. This Agreement offers better access to markets, in particular for processed products and manufacturing and services. The Department has followed up the negotiations and provided Malta's positions on the various aspects of this agreement. EU-Canada Comprehensive Economic and Trade Agreement The Department followed the start of negotiations of a trade agreement between the European Union and its Member States, and Canada and its provinces. The agreement is being negotiated within the framework of the Comprehensive Economic and Trade Agreement (CETA). Negotiations intensified during 2010 with successive negotiation rounds in the months of January, April, July and October of 2010. Negotiations are moving forward in a progressive fashion and the areas that are covered as well as the approach adopted in the negotiations are particularly unique in this free trade agreement. The Department has analysed the texts of the negotiations and provided Malta's positions where necessary, particularly in the area of services. EU-India Free Trade Agreement The Department has been monitoring and providing Malta's positions based on economic analysis and consultations with stakeholders with respect to the free trade agreement that is being negotiated between the European Union and its Member States, and India. These negotiations were launched in June 2007. Significant progress has been made in most areas of the negotiations and closure has been achieved in several areas. Engagement has been intensified in all areas requiring additional work. The EU-India Free Trade Agreement covers a number of areas including trade in goods, trade facilitation and customs cooperation, trade defence instruments, trade in services and establishment, government procurement, Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment competition policy, Intellectual Property Rights (IPR), capital movement and payments, trade and sustainable development, transparency and dispute settlement and mediation mechanism. EU-Euromed Agreements During 2010, the Economic Policy Department has been engaged in providing Malta's positions with respect to the Euromed FTA negotiations which are being held bilaterally between the European Union and its Member States and each individual Euromed country. At the bilateral level, major developments in 2010 related mostly to the fact that each Euromed country has concluded an Association Agreement with the European Union. Collectively, the association agreements replace the previous non-reciprocal co-operation agreements signed in the 1970s and constitute the foundation on which free trade is developing in the Mediterranean region. All association agreements provide for reciprocal trade liberalisation of manufactured goods with duty free access for Mediterranean exports and gradual tariff dismantling over a transitional period for EU exports. Ongoing negotiations to deepen trade liberalisation in agriculture, on services and investment are ongoing. Ninth Union for the Mediterranean Trade Ministerial Conference On 11 November 2010, the annual Ninth Union for the Mediterranean Trade Ministerial Conference was held in Brussels, whereby Trade Ministers discussed and endorsed two major documents relating to a package of measures to facilitate the trade of Palestinian products with other Euro-Mediterranean partners on a bilateral and regional basis in 2010. Another document related to the working priorities to strengthen Euro-Mediterranean trade relations during 2011. Since November 2008, the EU and Libya have been negotiating a Deep and Comprehensive FTA (DCFTA) with negotiations in a number of areas. During 2010, this agreement took the form of a Partnership and Co-operation Agreement. In view of Malta's bilateral trade relations with Libya, the Department has monitored developments and provided positions based on an economic analysis with respect to these negotiations. EU-Pakistan Following the floods that occurred in Pakistan, on 16 September 2010, the Member States of the European Union agreed to provide support intended to help Pakistan's economic recovery and development. The Department has been involved in providing the necessary analysis and subsequent positions with respect to the European Commission's proposal in this respect. Generalised System of Preferences
The Department followed the issues that have been discussed in the Generalised System of Preferences Committee and the GSP Working Party, which included the granting of preferential access to the EU market for developing countries, withdrawals from GSP and the granting of an additional transitional period under the ‘Everything but Arms' arrangement to a beneficiary country. The GSP Committee discussed also the next GSP Regulation. It was agreed to maintain the current Regulation beyond 31 December 2011, with minimum changes until the successor Regulation is agreed and enters into force. Trade Defence Instruments
The Department monitored and analysed the ongoing developments on antidumping, anti-subsidy and safeguard mechanisms. Advice was provided on a number of trade defence issues, this being based primarily on an economic analysis whilst taking into consideration the European Commission's investigation findings and the objectives, interests and priorities of the various government entities and Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment stakeholders. Some of the cases that were discussed during 2010 included the imposition of duties on imports of polyethylene terephthalate from Iran, Pakistan and the UAE and the cases concerning cargo scanners, wireless wide area networking modems and aluminium road wheels originating in the People's Republic of China. Regular consultations with local and Community stakeholders have been maintained. Investment Promotion and Protection Agreements
During 2010, Investment Promotion and Protection Agreements were signed with Montenegro (April) and Serbia (July). In consultation and co-ordination with the Ministry of Foreign Affairs, the Office of the Attorney General and other pertinent government entities, the Department continued negotiations on a number of draft bilateral Investment Promotion and Protection Agreements with a number of countries, including Morocco, Georgia, Albania, Bahrain, Bosnia Herzegovina, Ukraine, Vietnam., Azerbaijan and Qatar. The Treaty on the Functioning of the European Union and EU Trade Policy
The adoption of the Lisbon Treaty has had a significant effect on EU trade policy. This includes the increased role of the European Parliament and the extension of EU exclusive competence on Foreign Direct Investment (FDI). To date, investment has been Member State or mixed competence. Individual EU Member States have negotiated their own bilateral investment treaties (BITs) to provide protection to investors. However, this has now fallen under EU competence. In light of the above, in 2010, the Commission released a Communication concerning a Comprehensive European international investment policy and also a proposal for a Regulation establishing transitional arrangements for Bilateral Investments Treaties between Member States and third countries. The purpose of the Communication is to formulate a comprehensive common Union policy on investment and thus it has identified the geographical focus of the short to medium term agenda for investment negotiations. The Council also adopted Conclusions on the Commission Communication. The aim of the proposed Regulation is to establish the terms, conditions and procedure under which Member States will be authorised to maintain in force, amend of conclude bilateral agreements with third countries relating to investment. Both the Communication and the Regulation are currently being discussed in the TPC (Services and Investment) Committee. Concurrently, the European Parliament is also discussing these documents. The Department has reviewed and analysed these documents, while also participated in the discussions related to investment in the Council. Trade Ministers Dinners
On 21 February 2010, a Trade Ministers Dinner was held under the Spanish Presidency concerning the role that Trade Policy has to play to strengthen EU external competitiveness. On the other hand, the Trade Ministers Dinner held by the Belgian Presidency on 10 November 2010 discussed the Commission's Communication on the external dimension of the EU's 2020 Strategy. The Department provided policy briefings with respect to these meetings. Public Consultations
On 30 June 2010, the Department delivered a presentation to MEUSEC on the future direction of EU Trade Policy. The aim of this presentation was to facilitate Maltese stakeholders to contribute their views for the policy formulation of an EU trade policy. Eventually, the public consultation which was open to all stakeholders within the EU and third countries was launched on 9 November 2010 in the form of an EC Communication entitled Trade, Growth and Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment World Affairs – Trade policy as a core component of the EU's 2020 Strategy. To this effect, EPD delivered another presentation outlining the main feature of this Communication to MEUSEC on 26 November 2010. Meeting between the Minister of Finance, the Economy and Investment and EU
Commissioner for Trade
On 13 July 2010, a meeting was held in Brussels between the new Commissioner responsible for Trade, Mr Karel de Gucht and the Minister. A number of international trade policy issues have been discussed, including bilateral free trade agreements and other commercial agreements that are currently being negotiated by the European Union with third countries or regions. The newly acquired EU exclusive competence on Foreign Direct Investment was also discussed. The Department prepared technical briefings in connection with this meeting. Visit to Malta by the Belgian Trade Policy Committee Titulaire
In preparation of the Belgian Presidency that took place in the second half of 2010, the Belgian Trade Titulaire visited Malta on 15 March 2010 where a meeting was held with the Economic Policy Department. The aim of the meeting was to discuss the current international trade policy issues and to highlight Malta's specific interests and concerns on trade related matters prior to the Belgian Presidency. Research and Publications
Advisory Services The Department continued to provide its services to a number of government entities particularly through the preparation of information briefings and technical advice on Malta's position with respect to issues pertaining to international trade. Research and analysis on international trade and economic issues were also carried out to respond to ad hoc requests by various government entities. JOSEPH RAPA Director General (Economic Policy) Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment Commerce Department
The role of the Commerce Department is to assist business and facilitate trade whilst providing the necessary infrastructure to encourage the securing, utilisation and respect of intellectual property rights. Initiatives aimed at fulfilling this role are undertaken through the concerted efforts of its three directorates namely the Industrial Property Registrations Directorate, the Trade Services Directorate and the Small Businesses and Crafts Directorate assisted by its Support Services arm. OPERATIONS
The Commerce Department performs the following duties: − registration of trademarks, certification marks, collective marks and designs; − patenting of inventions; − issuing of supplementary protection certificates in respect of medicinals and plant protection products; − issuing of trade licences; − recording of transfers, cancellations, amendments and renewals regarding trading licences as well as trademarks, patents and designs; − authorisation of the export and transaction of dual use goods; − issuing of import licences and export licences; − administration of EU import quotas; − administration of temporary state aid for sugar; − licensing of auctioneers; − dissemination of information relevant to the business sectors; − payment of the flour transport subsidy; − provision of first-hand assistance and advice to clients who require any service offered by the Department; − acting as the National Co-ordinator (NIMIC) of the Internal Market Information System (IMI); − running of Crafts Centre in St John Square, Valletta; − providing support to the Malta Crafts Council, the Copyright Board, the Auctioneers Board and the Trading Licence Advisory Committee; − hosting the EU SOLVIT Centre for Malta; − co-ordinating Malta's participation in the European Enterprise Awards − co-ordinating the drafting of legislation relating to trade and intellectual property; − providing input on drafting of related EU directives and regulations as well as international treaties; − participating in international and EU meetings as required. SALIENT STATISTICS FOR 2010
Applications were received, processed and published in the Government Gazette. The list of applications is made up as follows: Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment New applications for premises based activities Reactivation of Licence Transfer of Licence Transfer by Inheritance Buskers 26 Marketing Agents Registration of Freelance Activity Non-premises Based Extension of Time Commercial Fairs Change or Additional Activity Late Night Shopping Substitute Hawkers Furthermore 1,510 applications were received for import licences and 70 for export licences. There were also 95 applications for exports of dual-use goods and military equipment. The Department through the Trade Services Directorate testified 722 times in court cases instituted by different authorities including Civil and Criminal courts, Family Courts, MEPA Appeals Tribunal, Local Councils' Tribunals. Industrial Property
Applications were received as follows: Registration of new trademarks Registration of new designs Patenting of new inventions Validation of European Patents in Malta Renewal of existing trademarks Renewal of existing designs Renewal of existing patents Furthermore, there were 3,300 Industrial Property searches. The Commerce Department through its Industrial Property Registrations Directorate was called to testify in court 54 times on intellectual property related issues. Members registered with the Malta Crafts Council as on 31 December 2010 stood at 887 craftsmen and 432 entrepreneurs. The number of visitors (including locals and tourists) to the local exhibition of crafts at Crafts Centre Valletta was 23,496. During 2010, the Malta Crafts Council participated in several crafts fairs/exhibitions held locally such as Great Spring Show, Festival Nazzjonali tal-Għana, Artisan Fair in Valletta (as part of World Tourism Day), Notte Bianca and others organised by various local councils, such as Festa tar-Rebbiegħa, Ħidma Agrarja u Tradizzjonijiet, Irkotta Fest, Lejl f'Casal Fornaro. Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment A number of proposed projects were drawn up by the Commerce Department in line with the Government's allocation of the fund of €200,000 in the 2010 Budget i.e. Business Support Fund for Crafts and Artisan Work: • National Action Plan on Better Development of the Maltese Crafts Sector and the First Maltese Socio- Economic Survey on Crafts and Craftsmanship: • With the collaboration of NSO, a questionnaire was drawn up and mailed to over 5,000 businesses which were identified from the Business Register to fall into the crafts categories; • Helping Crafts persons registered with the Malta Crafts Council to create attractive websites: • Following discussions with the Information Management Unit of MFEI the process for the development of a new crafts portal was initiated. It was agreed that the new portal would include unlimited number of web pages, a photo gallery and an archiving function amongst other functions. Additional features of the portal will include the e-ID, payment facility and online registration. A call for tender was issued; • Helping Crafts persons registered with the Malta Crafts Council present their products more attractively. A number of courses were organised for crafts persons about the subjects of marketing and packaging, innovation and Intellectual property. Ġieħ l-Artiġjanat Award This scheme was launched to award three sectors involved in crafts, namely: crafts persons; institutions and individuals; and businesses that contribute in the promotion and sale of local crafts products. Internal Market Information (IMI) System
The National IMI Co-ordinator (NIMIC) carried out various activities in relation to the implementation of IMI. • 5 new Competent Authorities (CA) were registered in the System; • 11 training sessions were held, during which users were given an overview of the IMI System or assisted in any difficulty they might have; • In the Professional Qualifications Module, 12 requests were sent by Maltese CAs to their counterparts in other EU Member States; • In the same module, 5 requests were sent by EU CAs to Maltese CAs. On 5 November, the NIMIC organised a seminar for all IMI users in Malta. The seminar focused on the data protection aspects of IMI and on the Services Directive. Nearly all users attended. ASSISTING BUSINESS
Business Care Unit
The Commerce Department through the Business Care Unit of the Small Business and Crafts Directorate continued to give first-hand assistance and advice to clients who required any service offered by the Department. During 2010, circa 2,576 telephone enquiries and 3,788 personal visits were received at the Business Care Unit mainly in relation to services offered by the Commerce Department. Malta SOLVIT Centre
As from 1 May 2004, the Commerce Department began hosting the EU SOLVIT Centre for Malta. SOLVIT is a network of centres throughout the EU and EEA, committed to solve cross-border problems which hinder the rights of citizens and Businesses in the Internal Market. The network works through an online database maintained by the EU Commission. The following is a summary of SOLVIT case activity in relation to 2010: Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment Total Enquiries
Cases entered in database as Home Centre
Non-SOLVIT/Not accepted Accepted ( Solved 6 – Unresolved 2 – Open 4) Awaiting acceptance/Draft Cases received in database as Lead Centre
Non-SOLVIT/Not accepted Accepted (Solved 5 – Unresolved 2 – Open 1) Awareness Activities and meetings with the Business Community
The Commerce Department organised or participated in several seminars or meetings aimed at raising awareness amongst local stakeholders on trade issues, intellectual property, crafts, SOLVIT and the Internal Market Information System. In particular, one may mention the following: • a national seminar with input from Malta Enterprise; the Chamber of Commerce, Enterprise and Industry and the General Retailers and Traders Union on Intellectual Property Enforcement Matters for Maltese SMEs which was co-financed through EU funds and which also saw the participation of the EU-China IPR Helpdesk; • IP awareness raising talks and workshops were undertaken for students, craftsmen and in co-operation with ETC, during which an overview of community trademarks and designs was also provided. In addition, promotional material was also created through funds made available to this office under the Technical Co-operation Agreement entered into with the Office for Harmonisation in the Internal Market (OHIM) – Community Trademarks and Designs. Participation in the 2010 edition of the Malta Trade Fair
The Commerce Department's stand inter alia promoted intellectual property, and also included the exhibition of diverse inventions and crafts. With regard to intellectual property, emphasis on Patenting was also made at this year's stand, with an official from the European Patent Office demonstrating the use of esp@cenet and other Patenting tools for a number of days. The Commerce Department's stand was also dedicated mainly to the local institutions which provide crafts courses, namely, the Institute of Art and Design MCAST, the Malta Society of Arts, Manufactures and Commerce and the Wistin Camilleri Centre for Art and Crafts from Gozo. Students and teachers from these institutions offered live demonstrations of their crafts. The IP Check-Up Diagnostic service was continued with purposely trained officials from the CD visiting the premises of any interested SME and in full confidence advising them through a detailed and methodical report on the SME's IP potential not only for Protection purposes but also, equally important, in order for the SME to strategically exploit its IP potential commercially. LEGISLATION AND BETTER REGULATION
The Department is regulated in its activities by the following main legislations: the Auctioneers Act; the Commercial Code; the Trading Licences Act; the Supplies and Services Act; the Trade Marks Act; the Copyright Act and the Patents and Designs Act. These are complemented with a significant amount of subsidiary legislations. The following legislation was enacted: • Following necessary amendments made to the Copyright Act in 2009, the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty, adopted at Geneva on 20 December 1996, entered into force with respect to the EU on 14 March 2010, and hence this also became applicable to Malta; Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment • Legal Notice 425 of 2003 on the control of the Establishment and Operation of Societies for the collective Administration of Copyright was replaced by Legal Notice 80 of 2010 which takes on board obligations resulting from the Services Directive. INTERNATIONAL AND EU INITIATIVES
International Instruments The ratification by the EU and the EU Member States, including Malta, of the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT) took place on 14 December, 2009 in Geneva. These two treaties entered into force with respect to the EU on 14 March 2010, and also mark the first time that the EU is accorded full contracting party status in the field of copyright and related rights. Participation in EU and International Meetings Officials from the Department participated in EU and international meetings pertaining to its remit or in order to assist other entities. Meetings concerned the following issues: Sanctions Monitoring, Dual Use Goods, the European Charter for SMEs, Trademark Practice and Procedures, Protection of Designs, Trade Related Aspects of Intellectual Property Rights, Patents, Copyright, Patent Libraries, Technical Cooperation, Better Regulation, the Internal Market Information System, European Enterprise Awards, Regulation 2679/98 EC on Disruption to the Internal Market and Crafts. In addition to the above, the Department participated in the General Assembly of the World Intellectual Property Organisation as well as other meetings organised under the auspices of WIPO such as the Standing Committee on Copyright and Related Rights and the Standing Committee on Patents. The Department also participated in the meetings of the Administrative Council of the European Patent Office and of the Administrative Board and Budget Committee of the Office of the Harmonisation of the Internal Market, as well as the EPO's Budget and Finance Committee, the Committee on Patent Law and the EPO's Technical and Operational Support Committee and OHIM's Liaison Meeting on Trademarks, Designs and Technical Cooperation. In addition, national judges were given the opportunity to participate in a series of seminars for judges dealing with trademark and design cases organised by the Office for Harmonisation in the Internal Market (OHIM) – Community Trademarks and Designs BILATERAL CO-OPERATION INITIATIVES
Co-operation with the Office for the Harmonisation of the Internal Market (Trademarks
and Designs)
During 2010, the Commerce Department once more benefited from a co-operation agreement aimed at increasing awareness on intellectual property rights and in particular the Community Trademarks and Community Designs. A similar agreement for 2011 has also been undertaken and it is envisaged that this will be signed in the beginning of January 2011. The Commerce Department is also participating in IT based projects funded by the OHIM for Trademark Classification and Searching services. Co-operation with the European Patent Office
Malta was the first European country member of the European Patent Office to introduce the SOPRANO system for Patents which is gradually replacing the manual system for the application, processing and granting of patents. During 2009, preparations were finalised with the EPO through the assistance of the Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment Ministry's IMU together with MITA for the upgrading of the EPTOS set, including SOPRANO and the implementation of other software tools in the area of patents as well as for the digitisation of all national patent records. These tools which include access to patent databases, documentation management systems, and online filing amongst others, as well as the digitisation process would serve to offer a more overall efficient service in the area of patents. Other projects falling under the EPO-CD National Action Plan for Malta for the years 2008-2011 include the upgrading of national infrastructure for Training and Archiving of IP documentation in addition to other technical training in the area of patents, to better promote the protection of inventions via a patent information dissemination service. In addition, through a specific project under the NAP, the Department has also procured the necessary equipment in order to upgrade the CD's staff development room so that this is equipped as necessary for training purposes. Malta also has a working agreement in place with the EPO whereby the CD is now in a position to request searches from the European Patent Office to determine the level of novelty in patent applications, which has paved the way for legislative amendments in the field of patenting to be discussed with the generic pharmaceutical industry. Co-operation with EU DG Enterprise
Under the Competitiveness and Innovation Framework Programme (CIP), the CD is actively participating in EU's transnational project, known as IPeuropAware, involving 27 partners comprising the EU's main IP Offices to raise awareness of and knowledge of IP rights in particular for SMEs. The project, which commenced in November 2007 and ends in 2011, consists of some 15 Work Packages grouped under three Modules. This office is proactively participating in this project by providing input to seven of the Work Packages (WPs) found under Module 1: Local Level SMEs Services for IPR Awareness and Enforcement. Cooperation with the World Intellectual Property Organisation (WIPO)
The Department has signed a Memorandum of Understanding with WIPO which covers diverse areas of cooperation and assistance between this office and the afore-mentioned organisation. In the 2010 Budget, the Award for Creativity and Innovation was launched, with a fund of €100,000 as an incentive to more investment in creativity and innovation in the education, arts, technology and manufacturing sectors and to give recognition to young creative entrepreneurs. In conjunction with the above, discussions have been held with the WIPO, as a result of which, it has been agreed to integrate the above award with the WIPO Award for Creativity and Innovation. Therefore, in addition to the monetary prize announced in the last Budget, the winners of the Awards will also be receiving a medal and certificate bestowed by this prestigious UN organisation. The Ministry will therefore be awarding the following categories: − Malta/WIPO Award for Creativity; − Malta/WIPO Award for Innovative Enterprise; − Malta/WIPO Award for Best Invention; and − Malta/WIPO Award for Best Young Inventor. TRAINING AND FAMILY FRIENDLY MEASURES
Ongoing exposure was given to the members of the SOLVIT team through participation in workshops partly funded by the EU Commission and two members of the IMI team through training events also organised and partly funded by the EU Commission. Other officials participated in workshops and training sessions organised by the Office for the Harmonisation of the Internal Market, the World Intellectual Property Organisation and by the European Patent Office. Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment During the past year officials from the Department attended several courses organised by CDRT as well as courses organised by the Commerce Department Alternative working hours were introduced at the Commerce Department with a view of assisting staff to cope with their family obligations whilst still maintaining the same service to the clients. GODWIN WARR Director General (Commerce) Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment Office of the Notary to Government
The Office of the Notary to Government comprises two main sections: the Notarial Archives and the Notarial Section. ARCHIVES SECTION
In the Notarial Archives are deposited deeds inter vivos and causa mortis published by Notaries Public who have practised or are practising in Malta. The latter are wills drawn up in the public form; the former are all other deeds relating to property transfers (sales, emphyteusis, partitions and others), loans, powers of attorney and so on. Moreover, in the Archives one finds also all deeds received by the Notaries to Government. All these deeds are deposited for custody and safe-keeping. At the head office in number 2/3, Mikiel Anton Vassalli Street, Valletta, are housed the original deeds, whilst the Registers (copies) are housed at 24, St. Christopher Street, Valletta. All deeds are also accessible to the public for inspection, provided that the person enquiring about a particular deed can indicate the Notary who published same and the date thereof. Legal or informal photocopies thereof are issued on request. Requests are also made by means of e-mail and this system has helped to improve the services. Fees are charged for such inspections and for any copies requested. Assistance was given to a great number of clients who had problems arising from deeds published by a Notary whose warrant was suspended by the Courts. In this respect and where possible, relative notes of enrolment and hypothecation were entered into the Public Registry by the Chief Notary to Government and where necessary forms for payment of taxes to the CIR were signed by same. NOTARIAL SECTION
The Notarial Section publishes deeds to which the Government, any corporate body established by law or any partnership or other body in which the Government of Malta or any such body has a controlling interest or over which they have effective control, is a party. The Notarial Section liaises directly with various government departments to give effect to certain government policies and activities. The Department also receives requests for the publication of deeds relating to courses of study which the Health Division advertises from time to time for the training of medical and paramedical staff. These requests are also received when scholarships are granted by the Education Directorates, the Ministry of Foreign Affairs, MRRA and others. In July, the Chief Notary to Government supervised and aided in the transfer of the volumes in the Notarial Archives in Gozo to another premises. This was held over three days in the weekend to cause least disruption and inconvenience to the public. Two Notaries from the Department were present at the offices of Transport Malta to oversee and record the proceedings of the opening of bids and the granting of 20 new taxi licences. Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment Upgrading of Archives at St Christopher Street
During the period under review, the office with the assistance of the Notarial Archives Resources Council continued working on the project of organising and upgrading the Archives at St Christopher Street, Valletta. The electrical system at the Archives was overhauled and modernised and this project was sponsored by the Rotarians. A number of distinguished visitors were received at these Archives and were impressed with the wealth of its contents. In March, an agreement was signed with the Hill Monastic Manuscript Library of St John's University, Minnesota in the United States for the digitisation of some of the oldest volumes. The equipment was provided by the HMML. This pilot project was initiated and almost complete by end of year. A number of volunteers and university students gave their contribution to this project. In May, members of staff were interviewed for a programme which was aired on Net Television. These Archives are officially open to the public twice a week, however by agreement with the staff they are in actual fact receiving the public every day. Exhibition of Volumes during Notte Bianca
A number of interesting volumes were put on display during Notte Bianca in September with the collaboration of the Parliamentary Secretariat for Small Business and Land. This proved to be a great success and the exhibition was visited by a large number of the public. Notarial Warrant Examination
In March 2010, a Notarial warrant exam was held for 19 students. Fifteen students were successful and obtained their warrant in May. List of Notaries
The Department also prepared the list of deceased Notaries and their keepers, both in Malta and Gozo, as well as the list of practising Notaries, in Malta and Gozo, for publication in the Government Gazette in January 2011. Lotteries
The Notaries from this Department were appointed by the Lotteries and Gaming Authority to be present to supervise the weekly Super Five and Lotto draws held throughout the year. These are being held in a private studio in Birkirkara and transmitted live on television. A Notary from the Department also supervised the Government VAT receipts lottery held monthly. STATISTICS
Notarial Archives Volumes of deeds received in the Archives in terms of the Notarial Profession and Notarial Archives Act (Cap. 55) Volumes of deeds received from the Special Commissioner for Notarial Acts in terms of Act X of 1999 Copies of deeds issued Volumes repaired Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment Notary to Government Office Deeds were published in connection with: Courses of Study and Scholarships Sale of grave sites Other transactions to which Government was a party Notes of Enrolment, Hypothecs, and References entered in the Public Revenue and Expenditure
The revenue collected by the office, during the year under review, amounted to €65,407.98 and the expenditure during the same period totalled €292,065.80. CORA VELLA Chief Notary to Government Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment Government Property Department
Directorate General
The Government Property Department (GPD) is responsible for the management of Government's immovable estate. The mission of the GPD is to promote and maintain the highest and best use of Government's immovable estate and to ensure an equitable process for the acquisition of property that may be required for public purpose. The GPD incorporates the Land Directorate, the Estate Management Directorate, the Joint Office and the newly formed Finance and Administration Directorate. Whereas each of the four directorates has precise objectives to achieve within a specific remit, the GPD acts as the co-ordinator of all operations whilst ensuring smooth management through the provision of the necessary financial and administrative support. Major Projects
The operations of the GPD are instrumental to the carrying out of major projects identified by Government. This is mainly due to the fact that GPD provides ongoing support to other government departments/entities to achieve the projects' objectives. The support service provided includes information on government property, eviction of squatters, termination of leases, acquisition of private property, provision of alternative accommodation, drawing up of property drawings, drafting of deeds and presenting parliamentary resolutions. The major projects in which GPD was heavily involved during 2010 include: − the reorganisation of the Public Transport – several sites identified and allocated; − installation of photovoltaic panels – information given on several sites and roofs of government-owned − Dockyard – emphyteutical grant to Palumbo; − City Gate Project by Renzo Piano including the new site for Parliament at Misrah il-Ħelsien - alternative accommodation granted to 22 shop owners relocated to other sites − Manoel Island Yacht Yard Company Ltd – emphyteutical grant to Manoel Island Yacht Yard Company − Chambray Project – Sale of underground facilities required for the building of a hotel; − Midi/Tigne Project – Allocation of the newly constructed football ground to Sliema Wanderers Football Club and reaching maintenance agreements on common parts located in the area; − Verdala and St Nicholas Bastion areas in Cospicua – evictions and removing of illegal structures in respect of an ERDF 104 project; − preparatory work required in connection with the privatisation of Enemalta's Petroleum Division scheduled for 2011. Tender Committee
One of GPD's main functions is the disposal of government property which generally is made through a call for tenders. During 2010, a change in the tendering procedure for the disposal of government property was effected. This change was intended to achieve transparency, accountability and efficiency in the tender process. To this effect a new Tender Committee, constituted by representatives from the Ministry Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment of Finance, the Economy & Investments, and the Contracts Department and chaired by the Director General Government Property, was formed to cater for all issues of calls for tenders and subsequent adjudication and this without the need of referral to the Contracts Committee. Furthermore, the minimum value expected by Government is now indicated in all call for tenders. Review of Internal Policies and Procedures
GPD in conjunction with the Parliamentary Secretary for Small Business and Land initiated an exercise to review existing policies and procedures. For this purpose, three seminars were organised and it is expected that this important exercise is concluded in the beginning of 2011. Information Technology
In the beginning of 2010, GPD entered into an agreement with LOQUS for the provision of a new, comprehensive IT system to operate the Land Estate Management Information System (LEMIS). Preparatory work was initiated during this period to upload data in the new system to enable the first module, that is, the Rent Generation Module, to be operative during the first months of 2011. This module incorporates the revenue collection system for all government-owned property. It is expected that the other five modules will be completed by the end of 2011, after all the necessary data is uploaded in the system. The sum of €900,000 was allocated for this exercise to commence in 2011. The implementation of the LEMIS system entails also the review of GPD's business processes and reorganisation to enable this new technological system to give the desired results. Proposals on the reorganisation of the Department are being discussed. Other Services
Parliamentary Questions The number of Parliamentary Questions replied by GPD in 2010 amounted to 150 PQ replies; this is 17% more than the PQ replies given in 2009 which amounted to 132. Identification of Vacant Properties During 2010, GPD initiated an exercise to identify all government-owned property within Valletta and Floriana area. This exercise is intended to establish the number of vacant government-owned properties in these two localities which Government can make better use of. This exercise confirmed that there are 2,998 government-owned properties in Valletta and 544 government-owned properties in Floriana. There are 210 vacant properties in Valletta whereas there are 15 premises vacant in Floriana. Government departments occupy 229 properties in Valletta and 110 properties in Floriana. GPD is also drawing up property plans of the vacant premises and the properties occupied by the government departments in both localities for registration purposes. FINANCE AND ADMINISTRATION
In mid-2010, the GPD's finance and administration branch, headed by the Director General, was given a new directorate status, with a new director appointed to administer the Finance and Administration Directorate. Auberge de Bavière
In 2010, the decision was taken to relocate the offices of the Joint Office located at the Ex-Pillar School in Marsamxetto Road, Valletta, to the Auberge de Bavière, to enable all GPD employees to operate from Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment under one roof. This move permitted the amalgamation of the legal office, the cash office and the technical office and avoided duplication of resources, reduced administrative expenses and ensured more accountability. Rehabilitation works In April, GPD issued a call for tenders for the rehabilitation of the central part of the Auberge de Bavière. Four offers were received; however none of these offers were accepted for various reasons. Clearance was obtained from the Contracts Department for GPD to negotiate new terms and conditions with the same four tenderers with the intention of issuing another call; however, not even these negotiations lead to the desired result. It is expected that a new call for tenders be issued in 2011. GPD has also prepared the necessary documentation for the restoration of the façade which is intended to begin once the internal refurbishment of the Auberge is completed. There were a number of offices which were not equipped with air condition units. Air conditioners were installed in these offices and were fully functional during the summer months. Human Resources
During the year, GPD experienced substantial changes in its workforce. Nineteen staff members terminated their employment either due to retirement or else sought new pastures, whereas 13 were newly deployed with the Department including the services of a new architect. This resulted in a decrease of GPD staff complement by six staff members from the previous year. GPD acquired the services of three persons with special needs to perform work related to the reconciliation of ex-church properties. Furthermore, another disabled person was employed as office assistant with GPD. Two calls for applications were issued for the post of directors in the Estate Management Directorate and the new Finance and Administration Directorate; the latter post was filled by an incumbent officer whereas the post of Director Estate Management was not filled. Another three calls for applications for the posts of Assistant Directors were issued and subsequently filled, whereas a call for application for the post of Senior System Administrator was issued and although the result was published the vacancy is still to be filled. Procedures were also initiated to issue calls for the position of managers, one of which to be posted in the Office of the Director General. The management also introduced new working hours for all personnel of the Department to work from 7.00am to 4.15pm or from 7.45am to 5.00pm with a 30-minute break. The majority of personnel opted for the first time-table. Management also gave the facility of a 45-minute break on Wednesday and closing hours to be 15 minutes later then the stipulated time. Overtime hours were allocated for specified jobs and this resulted that only 77% of the allocated funds were used. Training initiatives GPD initiated discussions with the University of Malta on the possibility of introducing a new course on Estate Management. This initiative was accepted and the course on estate management leading to a diploma shall commence in October 2011. GPD shall also sponsor a maximum of 20 GPD personnel who decides to read for this diploma. Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment Conclusion
The Government Property Department's role in ensuring that the use of government property is appropriately controlled is considered to be of utmost importance. This will help in inducing a rationalisation culture that appreciates the true potential value of government property and its possible uses. The other major task, which the Department is tackling seriously, is the acquisition debt problem and the capitalisation of the possession & use/public tenure compensation. In 2010, the Department has successfully concluded the capitalisation of approximately 400 acquired properties under the title of possession and use/public tenure in the Cottonera area and the complete acquisition of land by outright purchase in Santa Lucia and Rabat. The Department shall this year continue with its commitment to conclude past contracts of acquisition for the complete acquisition of areas within housing estates in order to enable HOS beneficiaries to purchase their residences. Other major commitments are the implementation of LEMIS IT Project, the continuation of finalisation of the Agricultural Land Scheme Agreements, the finalisation of the 2001 Residential Scheme contracts and the introduction of a new scheme for the grant of long leases of commercial properties to sitting tenants in order to (a) resolve the irregular occupation of property and (b) increase the revenue potential. ALFRED BEZZINA Director General (Government Property) Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment Government Property Department
Land Directorate
The Land Directorate's role within the Government Property Department is the legal aspect of government property management. This means that after the Estate Management Directorate or Joint Office has decided on the best possible use for a particular property, the issue is taken over by the Land Directorate for the actual disposal of the property under the procedures permitted in the Disposal of Government Land Act. In general terms, the formal disposal of government property requires either the issue of a call for tenders or else an ad hoc Parliamentary Resolution. It is the Land Directorate's task to prepare tender documents, publish them and award the disposal. Likewise ad hoc Parliamentary Resolutions are prepared by the Directorate. Subsequent to the disposal of a property through lease agreements/contracts, the Land Directorate is then responsible for the follow-up and enforcement of any conditions imposed on the transferee. These include the payment of rent and the proper maintenance of the property but may also contain other special conditions such as the development of structural improvements within specified time limits. The finalisation of contracts also includes those related to the acquisition of private property for a public purpose under the auspices of the Land Acquisition (Public Purpose) Ordinance. Indeed the expropriation of private property is a primary task of the Land Directorate, one which enables Government to carry out major infrastructure works and other projects of benefit to Maltese society. The Land Directorate is organisationally split up into two branches, namely the Enforcement Branch and the Contracts Branch; between them these cater for the wide ranging roles entrusted to the directorate. As the names suggest, the former is responsible for all enforcement measures required to better manage government property, whilst the latter takes care of the formal requirements of leasing or selling/purchasing property and finalising related contracts. Enforcement
The enforcement of contractual conditions is essential if property management is to be given any significance. Within this aspect the very small number of Enforcement Officers carries out site checks to ensure that conditions of leases and permits are being honoured. Non-compliance is met by counter measures to ensure that defaulters are brought back on track. These measures include formal warnings, the issuing of prohibitory injunctions and also eviction proceedings. In this regard Chapter 228 of the Laws of Malta - Land (Compulsory Eviction) Act – gives the Commissioner of Land extensive powers to evict persons who occupy government property without title. This power is used with caution but the Land Directorate is committed to ensure that government property is not abused of. The enforcement section incorporates within it the collection of rent due on leased property. The non-payment of rent is monitored through periodical invoices and also through individual demand letters. Persistent non-payment leads to judicial action that may include executive warrants, the termination of leases and, in the more serious cases, eventual eviction. The Revenue Section of the Joint Office is to be amalgamated to the Revenue Section at the Land Directorate. Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment During 2010, over 25,000 payments which represent 54.48 % of the total payments of rent, were effected at local councils, while 1,400 payments, which represent 3.1% of the total payments, were made through the Government Property Department's website (www.gpd.gov.mt). Clients have three options for the payment of rent - at the Department by cheque or bank draft, at local councils by cash, cheque or bank draft and from their homes by credit card through the GPD's website. It is planned to introduce also the 24X7 internet banking and epos services this year. Contracts Branch
The role of this branch is the formalisation of any disposal or acquisition of property. As already indicated, the Disposal of Government Land Act stipulates that government property can generally be disposed of either through tenders or through a Special Resolution of the House of Representatives. The publication of tenders necessitates continual liaison with the Estate Management Directorate and the Joint Office to ensure that the appropriate conditions are set out in the tender. Transparency is ensured by opening all tender documents in public. Government has for decades made use of the provisions of the Land Acquisition (Public Purpose) Ordinance (LAO) to enable it to take over private property without having finalised acquisition proceedings. Since 1994, the Directorate has limited the growth of the acquisition debt by requiring government departments that originate the need for the acquisition, to provide up-front the full estimated value of the effected property. This ensures the payment on demand for any acquired property. Between 2002 and 2010, over €74 million have been paid for expropriated property. In accordance with the provisions of amendments brought into force in 2003, the Department can take action to process past outstanding acquisitions and purchase property under certain conditions set out by law. These are intended to minimise the expropriation debt as well as to enable Government to draw up the long outstanding HOS plots contracts and dispose of residences within housing estates constructed on land still under acquisition. Under these amendments a total of 146 bank accounts were opened in 2010 for a total deposit amounting to €8,755,058.103. In terms of Act XXI of 2009, which came into force on 1 December 2009, the Land Acquisition (Public Purpose) Ordinance was amended further to establish a method of valuation for the expropriation of historical property, allow the owner/s to contest the public purpose, qualify further the role of the architects and appointment of architects sitting on the Land Arbitration Board as experts, make court appointed architects' reports accessible and to the parties who may wish to make questions to members of the Land Arbitration Board and allow persons to appeal on both points of law and facts before the Court of Appeal. 2010 HIGHLIGHTS
Revenue Collection
During the year, no less than 70,500 rent invoices, 149 judicial letters, and over 98 lease termination warnings were issued to ensure timely recovery of rent dues. To these one has to add other efforts such as telephone contacts and customer care assistance. About 120 repayment agreements (90 residential and 30 non-residential) were also negotiated with defaulters. This has resulted in total revenue of €31,380,000 excluding sales. Abuse of government property/evictions
Serious enforcement measures initiated in 2008 continued during 2009 and 2010. Notwithstanding that the Enforcement Branch numbers five persons in all, in 2010, the Directorate can boast that enforcement action has been carried out without break and the Directorate is successfully managing to free public and government land from illegal encroachments. As a result, the Land Directorate has won the support of the Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment public in its commitment to stop abuse of government land. A total of 269 evictions and approximately 778 inspections on illegalities have been carried out during 2010. Tenders, Leases and Sales
During 2010, the Land Department advertised a total of 154 tenders for the lease/sale of government property. A total of 551 lease agreements were concluded in terms of the Agricultural Scheme; 422 encroachment permits were issued. The latter included permits for mobile kiosks and permits for the placing of tables in public areas, one-time permits and permits for structural alterations. The Land Directorate also completed the sale of government land/property, including ex church property resulting in revenue for 2010 of €7,201,200. Acquisition
In 2010, the Directorate finalised a number of acquisition deeds paying a total of €13,683,145 to owners of expropriated property; issued 85 new President's Declarations for the expropriation of land mainly for road formation; and issued 75 President's Declarations of past outstanding acquisitions in order to compensate the owners in accordance with the amendments made to the Land Acquisition (Public Purpose) Ordinance (Cap 88). Releases
In 2010, a total of 8,188 square metres of land in various localities formerly acquired in virtue of the Land Acquisition (Public Purpose) Ordinance (Cap 88) has been released back to the private owners. Free of Charge Services
The Land Directorate has continued to provide, free of charge, agency services to the Housing Authority. Within these services, the total sum collected on behalf of the Housing Authority was €248,425. These services are also provided to Kunsill Malti għall-Isport. Projects
The Land Directorate has worked closely with Enemalta Corporation and the Privatisation Unit in the conclusion of expropriations and other work related to the privatisation of the petroleum division which is envisaged to take place this year. The Land Directorate in conjunction with MIMCOL and other entities has carried out the major work in implementing the following projects: • the reorganisation of the public transport – several sites identified and allocated; • installation of photovoltaic panels – information given on several sites and roofs of government-owned • Dockyard – emphyteutical grant to Palumbo; • City Gate Project by Renzo Piano including the new site for Parliament at Misraħ il-Ħelsien - alternative accommodation granted to 22 shop owners relocated to other sites; • Manoel Island Yacht Yard Company Ltd – emphyteutical grant to Manoel Island Yacht Yard Company • Chambray Project – sale of underground facilities required for the building of a hotel; • Midi/Tigne Project – allocation of the newly constructed football ground to Sliema Wanderers Football Club and reaching maintenance agreements on common parts located in the area; • Verdala and St Nicholas Bastion areas in Cospicua – evictions and removing illegal structures in respect of an ERDF 104 project; • Preparatory work required in connection with the Privatisation of Enemalta's Petroleum Division scheduled for 2011. Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment Conclusion
The Land Directorate's role in ensuring that the use of government property is appropriately controlled is considered to be of utmost importance. This will help in inducing a rationalisation culture that appreciates the true potential value of government property and its possible uses. The other major task, which the Directorate is tackling seriously, is the acquisition debt problem and the capitalisation of the possession and use/public tenure compensation. In 2010, the Directorate has successfully concluded the capitalisation of approximately 400 acquired properties under the title of possession and use/public tenure in the Cottonera area and the complete acquisition of land by outright purchase in Santa Lucia and Rabat. The Directorate shall in 2011 continue with its commitment to conclude past contracts of acquisition for the complete acquisition of areas within housing estates in order to enable HOS beneficiaries to purchase their residences. ALBERT V MAMO Director (Land) Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment Government Property Department
Estate Management Directorate
DEPARTMENTAL OVERVIEW
The EMD's mission is to help the Government Property Department shape and deliver Government's immovable property agenda by providing quality property-related advice and services. EMD helps the Government achieve its policy objectives by contributing to three key outcomes: − Improved and more efficient property operations; − Sustaining Government finances; − Sustaining Government projects and initiatives. PROPERTY OPERATIONS
Property Records
The update and maintenance of government property records is a fundamental task carried out by the EMD. This comprises of several property datasets including a textual database of government-owned property, deed packets as well as a number of map-sets. These records are an important information source for such government projects as Enemalta SPV project, the Grand Harbour project, City Gate project, housing, roads etc. Properties occupied by Government Departments/Entities
In order to consolidate the property terrier, properties occupied by government departments/entities are being investigated and verified; this exercise is being carried out to confirm occupation, type of use, extent and actual occupier. During 2010, EMD continued the task of verification and consolidation of properties occupied by Enemalta and Heritage Malta. Property Information Requests
As part of its role in maintaining the property terrier, the EMD provides property-related information to a varied list of clients that ranges from private individuals and companies to government ministries, departments, agencies and authorities. Information is typically required in connection with the possible disposal of such property and in relation to government projects and initiatives. During 2010, the EMD handled over 5,164 such requests/reports. In addition, the EMD carried out 2,049 property inspections, apart from giving assistance to the Land Directorate in 79 court cases. 784 property status reports were also drawn up. Property Plans
The preparation of property plans and drawings is an essential element in the management of government immovable property and the maintenance of a property terrier. The EMD utilises a custom-developed GIS-based Property Drawing System for the preparation of all property drawings. This system also interfaces with specific off-the-shelf computer aided design software to facilitate layout drawings. During 2010, the EMD put up a total of 1,420 property drawings in connection with leases, sales and permits over Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment government-owned property. In addition, 3,647 copies of plans were provided by the GPD in relation to such matters as Parliamentary Resolutions, land registrations, tenders etc. Protection of Government Title to Property
Under the provisions of the Land Registration Act, the first registration claimant to a property obtains a pre-emptive advantage over other pretenders. To safeguard Government's rights, the EMD checks every single application for property registration made with the Land Registry. During 2010, about 590 such applications were checked and, where applicable, the necessary cautions raised. The Department also investigated and resolved 125 cases of cautions and corrections raised against it by private parties. To further secure Government's title to its real estate, the EMD also undertakes the laborious process of registering Government's title via ad hoc applications to the Land Registry. During 2010, some 1,490 land registration plans were prepared, of which the EMD registered a total land area of 345,658 square metres. SUSTAINING GOVERNMENT FINANCES
Tender Proposals
Tender proposals are prepared for the eventual issue of tenders for the disposal of government property. During this process, EMD analyses and submit proposals for the issuing of tenders, taking into account factors such as demand, location, type of use, property ownership, etc. During 2010, EMD prepared and referred to the Land Directorate 144 tender proposals. In addition, 537 property valuations were carried out. SUSTAINING GOVERNMENT PROJECTS AND INITIATIVES
Devolution of Property to Local Councils
The EMD's task is to assess the devolution proposal, draw up necessary plans and ad hoc conditions and then refer the matter to the Land Directorate for finalisation of contract of transfer. During 2010, the Government Property Department concluded the devolution/leasing agreements for 25 properties as approved by EMD. Property Expropriation Assistance for Infrastructural Projects
The EMD also handles requests made by government departments for the expropriation of private property for public purposes, mainly in connection with infrastructural projects. The EMD collects all relevant technical data, takes corrective measures as appropriate, liaises with the sponsoring department and prepares the necessary plans for the expropriation. The EMD also provides technical assistance to the Land Directorate in acquisition cases taken in front of the Land Arbitration Board. In 2010 the EMD approved the release back to the original owners of 114,417 square metres of land that had been expropriated but never made use of by Government. Special Projects
During 2010, the EMD continued to play an active role in special projects sponsored by central Government including the Enemalta SPV project, Malta Dry Docks, City Gate project, and the Grand Harbour project. EMD's involvement relates to the identification of land boundaries, status and burdens, participation in the preparation of disposal conditions, preparation of plans and in some cases provision of final documentation. Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment Land Transfer to Government Entities
Other major projects that involved the EMD during 2010 were those related to the transfer of government-owned properties to government entities. These included the transfer of several parcels of land to Enemalta, the Malta Environment & Planning Authority (MEPA) and Malta Industrial Parks. Facilitation of the Home Ownership Scheme
As in previous years, the EMD continued to sustain Government's efforts to promote home ownership by authorising the transfer to the Housing Authority of 444 properties for eventual sale to tenants. Agricultural Land Scheme
This scheme was a corporate initiative that enabled cultivators of government-owned agricultural land to register for the possibility of acquiring a new title to the land even where occupation was irregular. During 2010, the EMD processed and approved for leasing 636 applications, of which 551 lease agreements were signed. Support Services
The EMD also provides support services by providing property-related information to such government bodies as MEPA, Project Design & Implementation Department, Land Registry, MIMCOL, Malta Industrial Parks, Transport Malta, and Housing Authority. RAYMOND CAMILLERI Assistant Director, Services Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment Government Property Department
Joint Office
The roles of the Joint Office are: − managing and administering the immovable estate transferred to Government by the ecclesiastical authorities in terms of the Ecclesiastical Entities (Properties) Act, Cap. 358; − validating and verifying the data being transferred to it by the ecclesiastical entities. The scope is to determine the exact value of all the properties transferred so that the necessary adjustments are made to the original amount of Lm28,067,000 which the Government issued in Bonds in terms of the 1991.Agreement with the ecclesiastical authorities; − to register at the Land Registry all the properties which it administers, as well as those retained by the ecclesiastical entities. PROPERTY ADMINISTRATION AND ALIENATIONS
In 2010, the following properties were alienated: As per 2002 Initiative or original deed Perpetual Emphyteusis (not part of 2002 Scheme) As per Tenders/Exchange/Direct Disposal/Conversion Total 455
The Department also received requests for the recognition of emphyteutae and tenants in their respective properties. In 2010, the Department processed 2,948 of these requests. 2002 INITIATIVE
This scheme was a result of Government's announcement in the 2002 Budget Speech, that it was putting on the market all the properties being administered by the Joint Office and which are either resident-occupied or used as a summer residence. By 29 January 2009, when it was decided that the scheme be suspended and no new applications be accepted so that the Department would have time to process and conclude the existing applications within the short term and thereafter issue another scheme (not necessarily with the same conditions), the Joint Office had received about 5,500 applications for the redemption of ground rent and for the purchase of leased premises. With a view to hastening the process, the Joint Office farms out to architects in private practice, the valuation of certain properties and to notaries in private practice the publication of deeds of redemption or sale. AGRICULTURE LEASES SCHEME
The Joint Office liaises with the Estate Management Directorate for processing applications received by February 2001 in terms of a scheme whereby persons occupying government-owned land for agricultural purposes without title were given the opportunity to regularise their position. Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment RECONCILIATION, VERIFICATION AND REGISTRATION
Transfer of Information on Properties
During 2010, the transfer of information from the Church Administrative Offices to the Joint Office regarding properties transferred to the Government by the Church continued at a steady pace. Up to the end of the year, about 25,000 forms concerning properties, listed in Annex 8 of the Church/State Agreement, were forwarded to the Joint Office by the ecclesiastical entities. A large number of correction forms had to be raised or confirmed regarding this information, which corrections have to be approved by the Control Committee in terms of Section 4 (2) of the Agreement. These corrections entail additions of properties inadvertently left out of the Annexes to the Agreement, deletion of others that were erroneously included, and correction to the capitalised amounts of properties. In 2010, the Control Committee approved 518 of these corrections. The Committee also signed 1,210 property forms, thus confirming the final amount due to the ecclesiastical entities in respect of the properties concerned. The Joint Office continued to reconcile the values of properties previously owned by the 99 different ecclesiastical entities. During the year, work on another 10 entities was in hand, out of which four were reconciled; thus by the end of the year the Joint Office has reconciled a total of 57 entities. During 2010, in terms of properties, a total of 1,238 properties were reconciled. Registration of Properties
The Department continued with the registration of property with the Land Registry in terms of Cap 358. During 2010, the Joint Office registered 555 properties. The related work entailed the drawing up of relative plans. This brought the total number of properties registered as of 31 December 2010 to 12,823. The following table shows the number of properties which were registered during the past years: 2007 2008 2009 2010
registered 567 607 542 555 REVENUE COLLECTION
Besides the collection of rent of leased properties, the Joint Office identified properties available for disposal in terms of the Disposal of Government Land Act. The following table shows the comparative figures of revenue collected during the past years: 4,959,101 13,266,255 6,375,602 14,154,683
3,376,723
6,559,418
45% of the amount of rent collected during 2010 consisted of arrears. This was the result of an ongoing enforcement exercise undertaken by the Joint Office in conjunction with the Land Directorate. CONTROL COMMITTEE
The Control Committee is a body set up in terms of Article 17 of the 1991 Agreement between the Holy See and the Government of Malta. Two members of the Committee are nominated by the Holy See and two members are nominated by the Government of Malta. Chairmanship of meetings is by rotation. The Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment present members representing the Government of Malta were nominated in January 2002. During 2010, this Committee met eight times. The functions of the Control Committee are promoting and monitoring the correct and timely application of the provisions of the above-mentioned Agreement with particular reference to the approval of corrections to the Annexes; and the alienation of property and in particular to bonds that have to be issued to the Foundation for Church Schools. By Legal Notice No. 327/2010 the sum of € 430,700 in Government Stock was issued to the Foundation for Church Schools in respect of property alienated in the previous year. CO-ORDINATION WITH THE ESTATE MANAGEMENT DIRECTORATE AND LAND DIRECTORATE
For the further co-ordination and related co-operation of the Joint Office with the other directorates forming the GPD, namely Estate Management Directorate and the Land Directorate, considered to be essential for uniformity in adapting common policies of the Department, it was decided that the Joint Office be moved to the Auberge de Bavière so that now all directorates forming the department are housed under one roof. CONCLUSION
The Government Property Department's role in ensuring that the use of government property is appropriately controlled is considered to be of utmost importance. This will help in inducing a rationalisation culture that appreciates the true potential value of government property and its possible uses. VINCENT GILSON Director (Joint Office) Annual Reports of Government Departments 2010 Ministry of Finance, the Economy & Investment

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