Cyprus has recently proceeded with the full transposition of the 4th European Directive (EU 2015/849) of the European Parliament (4th AML Directive) into domestic law and activated the implementation of the Ultimate Beneficial Owner (UBO) Register of Companies and other legal entities in Cyprus.
On 16 December 2020, the Council of Ministers of Cyprus has resolved to:
- Appoint the Registrar of Companies and Official Receiver of the Ministry of Energy, Trade, and Industry, as the competent authority for the maintenance of the central Register of UBO of companies and other legal entities and,
- Authorise the Registrar of Companies and Official Receiver, to collect information about the UBOs of companies and other legal entities through the intermediate system solution that has been developed.
The Registrar of Companies announced that data collection for companies shall commence on 16 March 2021 (the initial deadline was 18th of January 2021 but then postponed to the 22nd of February 2021). As from this date, a grace period of 6 months has been given for such submission. It is important to note that access to the intermediate system is only available to competent authorities, the Cyprus Bar Association, the Central Bank and the Cyprus Securities and Exchange Commission (CySEC). Moreover, the Unit for Combating Money Laundering and Terrorist Financing, the police, the customs department and the tax department are eligible for access. In addition, any person or organisation that can prove a legitimate interest and provide sufficient evidence will have access to information held by the UBO register.
The UBO information collected will be then transferred to the final platform solution to be developed in the second half of 2021 and access to it will be based on the provisions of the 5th European Directive (5th AMLD). The 5th AMLD, which entered into force on 19 June 2018 and was meant to be transposed into Cyprus law by 10 January 2020, will extend this access by making the Company Register available to the general public.
Companies are urged to commence collecting the above-mentioned information which have already been in their possession, based on the provisions of article 61(A) of the Prevention and Combating of Money Laundering and Terrorist Financing Law of 2007, as amended.
With respect to the Trusts and other types of legal arrangements, the UBO Register will be maintained and supervised by Cyprus Securities and Exchange Commision (CySEC). The information will be accessible to the competent authorities. However, 5th AMLD expands on the accessibility of the Trust Register by recommending access to obliged entities in the context of customer due diligence, natural or legal persons that can demonstrate a legitimate interest and natural or legal persons that hold or own a controlling interest in certain defined corporate or other legal entities.
The department of the Registrar of Companies and CySEC will provide more guidance in due course as regards to the UBO registration process, penalties for non-compliance and other matters connected with this topic.
For further information on this topic please contact Stelios Spiliotis or Marios Panayides at Sagehill Partners. Sagehill Partners website can be accessed at https://sagehillpartners.co/.