The framework for the prevention of money laundering and terrorist financing activities has been strengthened with the establishment of a Beneficial Owners Register for corporate and other legal entities.
The law for the “Prevention and Suppression of Money Laundering and Terrorist Financing (Amendment) Law of 2021”, was voted yesterday by the House of Representatives.
The Ministry of Energy, Commerce and Industry welcomes the voting of the relevant Amendment Law which harmonizes and strengthens national law with the 5th European Directive (EU 2018/843, 30th May 2018), on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing activities. One of the basic provisions of the Amendment Law regards the establishment, maintenance and operation of a Beneficial Owners Register for corporate and other legal entities, by the Registrar of Companies.
The Registrar of Companies (RoC) has announced on 12 March 2021 that the electronic service for registration of beneficial owner details for companies and other legal entities is now available as from 16 March 2021.
As per an earlier announcement made by the RoC on 19 February 2021, companies and other legal entities could start submitting their beneficial owner’s details into the Intermediate System Solution from 16 March 2021. For all companies and other legal entities incorporated before 12 March 2021 will be granted a period of twelve (12) months to submit their beneficial owners’ details into the system. Therefore, the reporting deadline is on 12 March 2022.
Entities that are registered after 12 March 2021 inclusive (new entities) must submit all required information with respect to each of their beneficial owners to the UBO Registry no later than thirty (30) days after the incorporation date.
The responsibility for the submission of information lies with the company and its directors. It is highlighted that fines and penalties may be imposed to companies and their directors that do not comply with their obligation to submit their UBO data.
The regulation does not apply to the following companies:
- Company listed on a regulated market that is subject to disclosure requirements consistent with Union law;
- Companies whose directors submitted an application for strike off pursuant to Article 327 (2A) (a) of the Companies Law, prior to the commencement of the regulation;
- Companies whose liquidation has been enacted before the commencement of the regulation;
- Overseas companies.
What information should be included in the Registers?
As a minimum, the following information must be kept up to date and communicated for each UBO:
- date of birth
- nature and size of interest
- when she/he became a UBO
It is worth noting that another controversial aspect of the AMLD IV and AMLD V is the introduction of the requirement to disclose the beneficial ownership behind trusts through “Trust Registers”.
In relation to trusts, the beneficiary will be determined pursuant to the provisions of the “Determining the UBO” section of this Article. Once the beneficiary is determined, the following information shall be mandatorily disclosed through the Trust Register:
- the settlor
- the trustee(s)
- the protector, if any
- the beneficiary or class of beneficiaries
- information on any other person exercising control over the trust
It should be noted that in Cyprus, the Trust Register will be supervised and maintained by the Cyprus Securities and Exchange Commission (the “CySEC”).
Access to the UBO Register
The UBO register will be publicly accessible in accordance with the 5th AML EU Directive. It must be stressed that for the interim solution, unrestricted access to information will be provided only to Competent Supervisory Authorities, the FIU, the Customs Department, the Tax Department and the Police, upon written letter to the Registrar. Upon the implementation of the new system which will be in place beginning of 2022, access will be provided in accordance with the EU Directive also to obliged entities. There is no indication that the registry will be open to more persons or entities. However, this may alter.
It is noted that for trusts and other similar legal arrangements, the register will be kept with the Cyprus Securities and Exchange Commission, (CySEC) and the information will not be open to the public unless the interested person can show legitimate interest.
Please contact Elena Kyriacou at [email protected] for further information and clarifications you may require.