Businesses illegally operating without trading licences are acting without fear of punishment – only three cases have been referred to the police in the last year.
This is less than 10 per cent of those brought to the attention of the authorities.
According to figures provided by the Economy Ministry, 32 reports of unlicensed businesses were received by the Trading Licences Unit since March 2015, before which no records were kept by the authority.
Of those, 12 regularised their position after being officially contacted but, out of the remaining 20, only three cases were referred to the police, who are responsible for enforcement.
Last month, this newspaper reported that Pama Shopping Village, a massive retail centre on the outskirts of Naxxar, had faced no penalties despite operating without a licence for nearly three months.
The complex opened for business in early last November, in time for the Christmas shopping season, but only applied for a licence in late January, after being contacted by the regulatory authority and given a window in which to regularise its position.
Under the Trade Licences Act, businesses must obtain a licence issued by the authority prior to opening to carry out any commercial activity. The penalty for contraventions is a fine of between €116 and €1,164, as well as an additional daily fine of €23 for continuing offences.
By law, most businesses have to apply for a trading licence
Fines, however, are only issued once a court case is brought against the operators, which is only possible after the case is referred to the police by the Trading Licences Unit. An Economy Ministry spokeswoman confirmed to the Times of Malta that the number of cases referred to the police was minimal. “In all cases the approach is the same: the office makes contact with the person involved and explains the legal obligations, forwarding application forms as necessary,” the spokeswoman said.
“Further communications are made as required, with a final letter being sent indicating that the matter will be forwarded to police if rectification is not forthcoming within a period of time.”
By law, most businesses have to submit an application for a trading licence prior to opening, although some categories of retail outlet are simply required to notify the authority up to 30 days after opening.
Nevertheless, members of the business community largely see trading licences as little more than a bureaucratic nuisance.
In the wake of the Pama incident, the president of the Malta Chamber for Small and Medium Enterprises (GRTU), Paul Abela, defended Pama’s decision to open without a trading licence, which he described as “a formality”.
“The trade licence is not a big issue; it’s not a health and safety or a planning matter. We’ve already added so many bureaucratic processes and things that entrepreneurs have to do,” Mr Abela said.
The Trade Licencing Unit has disputed claims that the licence is a formality and insisted it has the right to reject applications or impose certain conditions.
It added, however, that it “rarely” refuses an application because operators are guided on requirements before applying.