Schembri claims data removal of struck-off companies is Moneyval requirement

The ministry for the economy has hit back at criticism over the clearing of online data from companies struck off the register at the Malta Business Registry, saying company information is still physically stored at the MBR offices.

Economy minister Silvio Schembri said it was a requirement of Moneyval that inactive companies be removed from the registry. “However, prior to removal, the MBR performs all necessary verifications and checks and, should there be even a shred of suspicion of any abnormal activity, the case is forwarded to FIAU promptly. Even when a company is removed from the Registry, all necessary monitoring is carried out by the relevant institutions.”

The Daphne Foundation has criticised the clean-up of the registry, saying Malta has opened up an opportunity for illicit activity to occur, by removing all dissolved companies’ records from the online Malta Business Registry.

Schembri announced in July that over 10,000 business records have been removed from the Registry, in an effort to “clean up” the register. 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.

But the Daphne Foundation pointed at the example set by the UK against the misuse of corporate entities, where Companies House 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,” the Daphne Foundation said.

“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.”

Journalists too rely on open data to do their work and 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. MaltaToday 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.