2 - 8 August 2001

Trading Licences Act and commission agents

Early this month, the Malta Chamber of Commerce held a meeting with Edwin Vassallo, parliamentary secretary for Economic Services who is responsible for the new Trading licences Act. This law was circulated to the Chamber in its Draft Bill form for comments in late June.
At this meeting, Mr Vassallo explained the background behind the changes being made to the legislation governing all trading licences were aimed at increasing the compatibility of our law with modern day requirements.
These changes have been long overdue and the Chamber had frequently gone on record urging government to address certain anomalies in the area of trading licences including Sunday trading and more particularly commission agents’ licences.
In fact, for several years the Chamber,
mainly through its commission agents trade section had urged government to introduce the necessary enforcement and safeguard procedures in favour of local commission agents. The latter had complained that the Commercial Code and other relevant legislation did not protect the local commission agent in the event that a foreign principal unilaterally broke all commercial ties with the local agent. Similar protection, with a wider scope to cover commercial agents is offered in Europe. In particular commission agents complain more fervently about a number of commission agents who were known to operate illegally in Malta because they were not duly licensed with the Chamber of Commerce according to Section 71 of the Commercial Code. This is of great concern because on one hand, it discriminates against law abiding citizens. The latter must compete on an uneven playing field with persons who do not carry a fair tax burden and can therefore operate on lower costs.
The Chamber has since carefully reviewed the Trading licences Act in its proposed format. A principal concern has consequently emerged in that the new law intends to repeal Articles 71-73 of the Commercial Code empowering the Malta Chamber of Commerce as the exclusive regulatory institution for the issuing of commission agents licences, a responsibility which the Chamber has enjoyed since 1939. The Chamber also
objected to unclear wording in Section 34 of the Bill wherein it is stated that the present provisions would continue to apply “until the Minister by Order establishes that the provisions of this Act shall commence to apply to such agents and brokers”. Finally, it is also pertinent to note that Sections 16 and 17 of the draft Bill make no specific mention of the Chamber of Commerce as a “Regulatory Authority” thereby further compromising the Chamber’s position.
The Chamber strongly objects to the possibility of having its internal structures such as the Commission Agents Screening Committee set up to administer its responsibilities in this field replaced by the new Licencing Appeals Board contemplated by the Act (Section 9). The Chamber is not in favour of replacing its independent structures and commissions, which have proven themselves with an excellent track record for so many years, with something which falls under the direct responsibility of a minister. The Chamber has requested for many years that similar
safeguards are introduced for all trading licences and the Chamber expects to nominate a representative to sit on the relative board appointed for this purpose.
The Chamber’s position in this regard has been rendered clear by the Commercial Code for more than six decades but throughout this time it has had to endure several similar attempts made to hamper its influence in respect of commission agents. All such attempts were resisted successfully in the past and it is convinced that this record will be maintained in the future.
There are other matters of concern emanating from the new Trading Licences Act. These include issues related to Sunday trading, the roles of the minister and local councils, the applicability of the Act and the composition of the Licencing Advisory Committee. However, such is the importance of the issues related to the Chamber’s traditional responsibilities vis-à-vis commission agents that the Chamber would seek to address them with foremost priority while also commenting on the other issues.

This is the editorial in the latest issue of the Commercial Courier, published by the Chamber of Commerce