ONLINE ACCESS TO COMPANY DATA SHOULD BE REINSTATED
Malta has opened up an opportunity for illicit activity to occur, by removing all dissolved companies’ records from the online Malta Business Registry. Silvio Schembri, Minister for Economy, Investment and Small Business, announced in July that over 10,000 business records have been removed from the Registry, in an effort to “clean up” the register. Companies acting in an unlawful manner will now be able to complete their business, and dissolve the company with minimal public trace of their activity.
For Malta-registered companies that failed to give official ownership information, or file annual reports, only the name and incorporation date of the company is now visible online. Any inquiries into dissolved or struck off companies now have to be made in person at the Registry head-office,
at a price of €20 per file.
In an attempt to safeguard the UK’s reputation against the misuse of corporate entities, Companies House, the UK’s equivalent to the Malta Business Registry, recently announced that it will no longer remove dissolved company records from its website, while also reinstating all
previously removed records. Malta could look to the UK, in this instance, and similarly enact measures that promote a more transparent system.
Police, regulators and others rely on open data in their investigations
More needs to be done to ensure every trace of illicit activity is visible to national authorities and investigators, combating these crimes at the root, and ensuring they are prevented from occurring again.
Police and regulators, in Malta and other member states of the European Union, rely on open source information to substantiate their investigatory powers.
While the data is still available in-person, this option is only available to those located in Malta, with an ability to visit the head office, or with the financial resources to access the quantity of data.
International investigators wishing to facilitate domestic investigations will be hindered by this decision. As past investigations have shown, cross-border collaborative investigations further the pursuit of justice and, for this reason, should not be restricted. Everyday citizens wanting to
conduct a background check of dissolved companies may be financially hindered in their right to access information.
Journalists rely on open data to do their work
Data removal leaves investigative journalists without the tools to properly investigate the background of a company and report on matters that are of great interest to the public.
Malta Today used these tools in 2016 to report that Manuchehr Ahadpir Khangah, a close associate of the President of Azerbaijan, had set up a series of companies in Malta through Nexia BT , which were swiftly liquidated after just nine months. Without the essential tools of open source data, it is unlikely that this information would have been discovered, or reported on. In 2015, The Malta Independent reported on Malta-registered companies forming part of a web of international companies linked to the ‘ Ndrangheta and used for unlicensed gaming and money laundering. Two of the Malta-registered companies mentioned in the report have been struck off.
Their records are no longer accessible online, making investigative reporting more difficult, particularly for media not based in Malta.
Recently, The Shift News reported that Eximius Business Malta Ltd, one of the companies set up by Nexia BT and now subject to the court asset freeze against Brian Tonna, had acquired control of aviation company Eurojet Ltd from Tumas Group. Eurojet Ltd supplied the private jets former Prime Minister Joseph Muscat used. Eximius Business Malta Ltd has been struck off and its records are no longer accessible online.
Bad actors getting mileage from secrecy
Instantly purging data will incentivise the use of Maltese companies as getaway cars. Illicit activity will be harder to trace and harder to prove. This will work against the objectives set out in the Moneyval recommendations.
A matter of public interest
Public records on struck-off or dissolved companies are a matter of public interest, one that supersedes any right to be forgotten. Journalists, police and regulators, and interested parties, need this information to corroborate their investigations.
Rather than removing data indiscriminately, Malta should increase its capacity to monitor the accuracy and legitimacy of details which companies provide. Greater transparency in the system will also further trust, encouraging more business ventures to occur in Malta.
(This is a joint statement by the Daphne Caruana Galizia Foundation and IĠM)