Don’t rule out legitimate interest on BO registries, says Caruana Galizia

A European court ruling on public access to beneficial owner (BO) information should not shut door on access for people who can demonstrate a legitimate interest, the journalist and transparency activist Matthew Caruana Galizia argued.

The Malta Business Registry removed all public access to its BO registry last month, limiting the information to competent authorities and subject persons only on the strength of a European Court of Justice ruling that the provision of the EU’s anti-money-laundering directive for access to BO registries is invalid as it interferes with the fundamental rights of beneficial owners themselves.

But Caruana Galizia argued that the law still allows those with a legitimate interest in information to access the registry of beneficial owners. “Both the Malta Financial Services Authority (MFSA) and the Financial Intelligence Analysis Unit (FIAU) rely on independent investigations as an open source. At a minimum that means journalists and organisations with an anti-corruption mandate should be able to access the Register of Beneficial Owners on par with subject persons,” he told MaltaToday.

MBR closes registry

The MBR took the decision to close off access three days after the ruling delivered by the CJEU, with online access to BO information removed immediately. Other countries were just as quick to take down their registers, including Austria and the Netherlands.

MBR CEO Geraldine-Ann Spiteri Lucas told MaltaToday the registry is following the developments closely from the European Commission and other member states. “The MBR is committed to continue promoting transparency while adhering to all rules and obligations,” she said.

She said the MBR will follow the Commission’s directives.

Caruana Galizia challenged whether this should be the go-to approach for registries, local and foreign. “Contrary to the approach taken by the Malta Business Registry to immediately shut off beneficial ownership access and limit it to ‘subject persons’ under AML laws, I would invite MBR to adhere to their obligations to ensure that other persons who can demonstrate a legitimate interest are able to access such beneficial ownership information without undue hinderance.”

He added that the Commissioner for Revenue should also be open and transparent about its administrative fines for non-compliance, possibly by adopting the model used by the FIAU. Their approach has been to publish statements whenever such fines are issued. “That would allow the tax-paying public to see the the benefits of open access to beneficial ownership information. Presently, the Commissioner is using information published by journalists, including from Swiss Leaks and the Panama Papers, but not being transparent about the deals it’s reaching with evaders.”

In reaction to the registry’s closure, the Nationalist Party insisted that the information must remain accessible to journalists and civil societies. It pointed to the part of the ruling which emphasised that the information should be accessible to those who have a legitimate interest. “The decision of the Malta Business Registry means that journalists and civil society will be deprived of an essential tool in the search for the truth and the disclosure of abuses with the aim of strengthening democracy and good governance in our country,” the party said.