INTRODUCTION
Following the recent trend on enhancing transparency and abiding to the relevant legislative regime imposed by the EU, Cyprus implemented the 5th AML Directive by amending the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2007 (the “Law”).
On 12th of March 2021, the Registrar of Companies (the “ROC”) issued a binding directive (the “Directive”) pertaining to the implementation and operation of a register which will contain information on beneficial owners of Companies and other legal entities registered in the Republic (the “UBO Register”).
In essence, every Company and other legal entity and every Officer thereof, shall take all reasonable measures to obtain and hold adequate, accurate and current information on their beneficial ownership and submit this to the ROC.
1. WHO IS THE BENEFICIAL OWNER?
With respect to corporate entities, a Beneficial Owner is defined as:
a. The natural person who ultimately owns or controls the entity through direct or indirect ownership of a sufficient percentage of shares or voting rights (25% plus one share) or ownership interest (exceeding 25%) including through bearer shareholdings, or through control via other means, excluding companies listed in regulated market or
b. the natural person who holds the position of senior managing official if, after having exhausted all possible means, no other person is identified.
2. WHAT INFORMATION MUST BE COLLECTED AND DISCLOSED?
a. Every Company and other legal entity and every Officer thereof shall collect and disclose to the ROC the following information pertaining to its Beneficial Owner(s) (the “Information”):
i. Name, surname, date of birth, nationality and residential address;
ii. Nature and extent of the beneficial interest held directly or indirectly;
iii. Identity card or passport;
iv. Date on which he became beneficial owner;
v. The date of any change to the beneficial ownership.
b. The responsibility for the collection and submission of the Information lies with the Company and its Officers however, each Beneficial Owner is obliged to provide the Company with all necessary information, including updating the Company within 15 days of any change pertaining to his beneficial ownership.
3. WHO HAS ACCESS TO THE UBO REGISTER?
(a) Access to the UBO Register until the implementation of the final system solution shall be limited to the Competent Supervisory Authorities, the Unit for Combatting Money Laundering and Terrorist Financing (the “Unit”), the Customs and Excise Department, the Inland Revenue and the Police without any restrictions;
(b) After the implementation of the final system solution, which is expected to take place beginning of 2022:
(i) The Competent Supervisory Authorities, the Unit, the Customs and Excise Department, the Inland Revenue and the Police shall have unlimited access to UBO Register;
(ii) The Obliged Entities, within the framework of conducting due diligence shall have fast access to only the name, month and year of birth, nationality and country of residence of the Beneficial Owner as well as to the nature and extent of the beneficial interest held, following payment of €3,50 fee per entity;
(iii) Any member of the general public shall have access only to the name, month and year of birth, nationality and country of residence of the Beneficial Owner as well as to the nature and extent of the beneficial interest held, following payment of €3,50 fee per entity.
4. SUBMISSION DEADLINES
a. Company or other legal entity which was registered prior to 12th of March 2021 must submit the Information electronically by 12th of March 2022.
b. Company or other legal entity which has been registered after 12th of March 2021 must submit the Information electronically within 30 days from the day of its incorporation.
c. Any amendments or changes to the Information must be submitted within 14 days from the day these were brought to the attention of the Company.
d. A Company or other legal entity and every Officer thereof are obliged, during the period from 1st to 31st of December of each year, to confirm to the ROC the Information pertaining to its beneficial owners.
5. PENALTIES
Failure to comply with the submission of Information by the Company and its Officers, may result in:
a. Criminal liability punishable with imprisonment of up to 1 year and/or a fine not exceeding €100,000.
b. Administrative fine of €200 plus €100 for each day the infringement continues, capped at €20,000.
6. HOW CAN BYBLOSERVE HELP?
a. Advise on whether you are affected by the abovementioned regime and assist you in achieving compliance.
b. Review your corporate structure and provide you with solutions to minimize disclosure and protect your confidentiality.
DISCLAIMER: The information contained herein is provided for general information purposes only and does not constitute and neither shall be construed as legal or other professional advice. Neither Bybloserve Management Limited nor any of its employees accept any liability for any loss arising from relying on the information contained herein.