The 5th Anti-Money Laundering EU Directive was transposed into Cyprus legislation through the Prevention and Suppression of Money Laundering Activities Laws of 2017-2021 (the “Law”) on 23 February 2021.
According to the Law, companies and any other legal entities incorporated in Cyprus must obtain and maintain accurate and up-to-date information concerning the beneficial owner(s) of the company or legal entity. This information is registered, kept, stored and updated by the company or legal entity and its officers in its registered office.
The Law provides for the establishment of a central beneficial owner register of the companies or other legal entities. The beneficial owner register (the “BO Register”) is a centralized register that contains information about the beneficial owners of entities that fall under the Law. Cyprus entities, are obliged to identify and record electronically on the BO register, all relevant information of the beneficial owner who owns or controls them. Entities are also required to always keep the BO register updated.
Definition of Beneficial Owner
According to the Law, Beneficial Owner (the “BO”) means, any natural person who ultimately owns or controls the customer and/or the natural person on whose behalf a transaction or activity is being conducted and includes, cases of corporate entities, trusts or legal entities such as foundations and legal arrangements similar to trusts.
As per the definition of the Law, a BO is defined as a natural person who has the ultimate control or ultimate ownership in a company. In the case of corporate entities, a BO is
The Registrar of Companies will be authorized to collect all necessary information about the ultimate beneficial owners and other legal entities through the interim system that has been developed. The date of implementation of such data insertion had been set to the 18.01.2021, but then postponed to the 16.03.2021. A grace period of 12 months, starting from the 16th of March will be given to all existing entities to submit their BO’s data onto the system. The responsibility for the true and accurate submission of the BO information lies with the entity itself and any of its officers.
Fines and penalties shall be imposed to entities and their officers that do not comply with the Registrar’s directives and the provisions of the Law regarding the recording of all requested BO data to the BO Register but during the interim solution, no penalties will be imposed.
The information of the BO Register in its current form (the interim solution) will be accessible only by the competent supervisory authorities/regulators. This means that for the interim solution the search facility will not be available to obliged entities and any member of the general public.
All information regarding Beneficial Ownership is protected by strict data protection regulations and will only be accessed if it is deemed appropriate, judging by the merits of each case.
Discrepancies
A discrepancy exists in case where the information provided in the BO is inconsistent with the information the competent authorities and/or obliged entities have at their disposal. In these case, the aforementioned authorities and/or entities must submit relevant documents and information evidencing such discrepancy. For the interim solution, the discrepancy report will be implemented only for Competent Supervisory Authorities, the Financial Intelligence Units, the Customs Department, the Tax Department and the Police, upon written request to the Registrar of Companies.
The implementation of these regulations is a sign that Cyprus is aiming to create a reliable business environment by strengthening and harmonizing the framework with regards to the prevention and suppression of money laundering.
N. Pirilides & Associates LLC is in a position to provide guidance and advice in relation to all the specifics above. For any enquiries please contact us at info@pirilides.com.
