Malta Business Registry issues more fines but collects less

The Malta Business Registry has almost doubled the value of fines it is imposing on businesses found in contravention of the Companies Act.

But the department responsible for enforcement, headed by Economy Minister Silvio Schembri’s wife Deandra Schembri, is not managing to collect the fines and arrears and dues owed to the MBR are accumulating.

According to information tabled in Parliament by Schembri, the minister responsible for the MBR, a total of €9.4 million in fines were imposed in 2019 and the amount had increased to €16.2 million by last year.

But despite the increase, the government is pocketing less as most of the fines remain unpaid.

Replying to parliamentary questions tabled by Opposition MP Jerome Caruana Cilia, it results that the MBR managed to collect just 44% of the fines it imposed in 2021 and the percentage dropped to 41 last year.

Sources close to the MBR told The Shift that while businesses are being fined more than ever in a bid to bolster compliance statistics following Malta’s grey-listing by the Financial Action Task Force, the collection of those fines, the real proof of the pudding, is much thinner on the ground.

According to the Companies Act, registered companies are bound to observe certain rules including the timely filing of annual returns and audited accounts and the law obliges the MBR to impose penalties and possible court proceedings against companies that fail to comply.

Most of these rules, however, are not being enforced by the MBR.

“The fact that the head of the MBR’s enforcement unit is the wife of the minister responsible for the MBR is definitely not helping,” a senior registry officer told The Shift.

“You know what usually happens in Malta when a well-connected businessman complains to a minister. Just imagine what happens when the business-friendly Silvio Schembri receives such calls and his wife is the person expected who is expected to crack down on them.”

Deandra Schembri graduated as a lawyer in 2012 and was placed on the MBR’s payroll a few months after her husband was made Parliamentary Secretary.

Shortly after Schembri was promoted to minister in 2019, his wife was also given a promotion at the MBR that saw her take-home pay increase by €14,000 to reach €50,000 a year.

Mrs Schembri was also appointed as a member of the Police Complaints Board, for which she is also remunerated.