Updated 7.15pm with Business Registry reaction below

Malta has opened up an opportunity for illicit activity by removing all dissolved companies’ records from the online Malta Business Registry, the Daphne Caruana Galizia Foundation and the Institute of Maltese Journalists (IĠM) said on Thursday.

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

But the foundation set up in memory of the slain journalist said 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 for €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, the foundation and the IĠM said.

Police, regulators, others rely on open data 

They also said that 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, they said.

... And so do journalists

Data removal also 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, the organisations said.

They pointed out that 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,” they said.

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, the foundation and the IĠM insisted.

“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,” they said.

PN agrees

A similar statement was issued by the Nationalist Party later. It said it expected Technology Minister Silvio Schembri to give the Malta Business Registry a clear directive to ensure company information is again accessible online as soon as possible. 

Malta Business Register defends its decision

The Malta Business Register defended its decision on Thursday evening.

"The step has been taken by the Registrar due to the fact that these companies may be misused and in fact this was also a MONEYVAL Recommendation (and other international institutions, like OECD) to remove from the Register any inactive companies," the register said in a statement in English.

"These companies have been screened by MBR’s Compliance Unit and any suspicious information was reported to MBR’s MLRO (Money Laundering Reporting Officer)."

It said that before a company is struck off the Registrar publishes a notice on the MBR’s website and on a daily newspaper giving a three-month period for
any objections to the striking off.

It also referred to General Data Protection Regulation (GDPR) saying that company documents include information amounting to personal data.

The name, registered office, date of incorporation, date of striking off and the
status of the company remain visible on the MBR online portal.

All information will remain physically stored in the MBR building and anyone can request company information, as a physical document or by email. 

"We should point out that just because data (personal data) are not published on our website, it does not mean that the activity of companies that have been struck off is no longer monitored or not subject to scrutiny," the Register insisted.