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The Prevention and Suppression of Money Laundering Activities Laws of 2021 (hereinafter the “Law”) was passed in the Republic of Cyprus in order to enhance the framework on the prevention and suppression of money laundering and terrorist financing. The provisions of the Law were based exclusively on the Fifth Anti-Money Laundering European Directive 2018/843, of 30th of May 2018 (hereinafter the “5th Directive”), which was passed so as to create a new portal in which the beneficial ownership of each company would be publicly available at any time and to any person.
As a consequence of the new Law, the Registrar of Companies and Official Receiver (hereinafter the “Registrar”) acts as the keystone of regulating the provisions of the Law, by creating the Beneficial Owner Register (hereinafter the “BO Register”) through which, each company and/or any other legal entity incorporated in the Republic of Cyprus has to take all the relevant actions in order to submit the requested information regarding its beneficial ownership. Consequentially as soon as an entity complied with the law and submitted the relevant information in the BO Register, thereafter it has the responsibility to regularly update the BO Register in the case of a change in the beneficial ownership and ensure that each information submitted in the Register is complete and punctual.
In accordance with The Prevention and Suppression of Money Laundering Activities Laws of 2007 (188(Ι)/2007), a ‘beneficial owner’ means a natural person(s) who ultimately owns or controls the customer and/or the natural person(s) on whose behalf a transaction or activity is being conducted and includes at least the following persons:
(a) in the case of corporate entities, the natural persons who ultimately own or control the company through direct or indirect ownership of a sufficient percentage of shares, namely shareholder of 25 % plus one share, or voting rights or ownership interest of more than 25% in that entity, or through control via other means.
(b) in the occasion where it is impossible to identify a person having direct or indirect ownership or where there is a doubt as to who the beneficial owners are, the natural person(s) who hold the position of senior managing official(s), the obliged entities shall keep records of the actions taken in order to identify the beneficial ownership.
(c) in the case of trusts:
• the settlor
• the trustees
• the protector, if any
• the beneficiaries, or where the individuals benefiting from the legal arrangement or entity have yet to be determined, the class of persons in whose main interest the legal arrangement or entity is set up or operates.
• any other natural person exercising ultimate control over the trust by means of direct or indirect ownership or by other means.
(d) In the case of legal entities such as foundations and legal arrangements similar to trusts, the natural person(s) holding equivalent or similar positions to those referred above.
The Registrar declared the 16th of March 2021 as the first day for the operation of the BO Register. Moreover, in order for the BO Register to operate properly, the Registrar issued the First Directive for the Prevention and Suppression of Money Laundering Activities (Beneficial Owners Registry) of 2021.
The responsibility for the filing to the BO Register fells to the Companies incorporated or registered under the Companies Law Cap.113 and to European Public limited liability Companies only. It is, also, important to highlight that as per the term 3 of the Registrar’s Directive, such responsibility is not applicable to:
• Companies listed on a regulated market that is subject to disclosure requirements consistent with Union Law,
• Companies which are subject to equivalent international standards which ensure adequate transparency of ownership information,
• Companies who filed a strike off in accordance with the Article 327 (2A) (a) of the Companies Law, prior to the commencement of the Registrar’s Directive,
• Companies whose liquidation commenced before the enforcement of the Registrar’s Directive
For the procedure of filing to take place, each company must firstly create an account with the Ariadni Portal and then to visit the e-filing system of the Registrar in order to file the BO’s details.
For further clarification, the information to be filed in the BO Register where a beneficial owner is a natural persona are the following:
• Name, surname, date of birth, nationality and residential address
• Nature and extent of the beneficial interest held directly or indirectly by each beneficial owner, including through percentage of shares, voting rights, or the nature and extent of the Significant influence or control with other means exercised by each controlling person
• Identification document number indicating the type of document and the country of document issuance (Identity card or passport).
• Date on which the natural person was entered in the register as beneficial owner and
• Date on there were changes in the particulars of the natural person or the date on which the natural person ceased to be a beneficial owner.
On the other hand, the information to be filed in the BO Register where there is a Trust, Foundation, other similar legal arrangements or listed companies are the following:
• Registration number (if any)
• Country of Jurisdiction
• Business address (not applicable to trust)
• Nature and extent of the beneficial interest held directly or indirectly by each beneficial owner, including through percentage of shares, voting rights or the nature and extent of the Significant influence or control with other means exercised by each controlling person,
• Date on which the Trust, Foundation, Other similar legal arrangements and listed company was entered in the register as beneficial owner and
• Date on which there were changes in the particulars of a Trust, Foundation, Other similar legal arrangements and listed company or the date on which it ceased to be a beneficial owner for BO register purposes.
It is also of high importance to distinguish the timeframe for each filing:
• For entities registered after the 16th of March 2021, the filing should take place within thirty (30) days from the date of registration.
• For entities registered before the 16th of March 2021, the filing should take place within six (6) months from the 16th of March 2021.
• For a change of BO, the filing should take place within fourteen (14) days from the date of change.
Additionally, each entity must confirm electronically the BO Register every December to ensure that the proper records are kept in the BO Register. Both the entity and its officers are responsible to maintain correct and accurate records in the Register, otherwise a penalty may be imposed in accordance with the provisions of the Law. Irrespective from a criminal liability or prosecution, the entity or its officers may be burdened with a financial penalty.
Taking into consideration that the provisions of the Law must be strictly adhered to, each company must ensure that it duly complies with such provisions and update regularly the BO Register.