Cyprus proceeded with the transposition of the 4th AML Directive (EU 2015/849) and started the implementation of the Ultimate Beneficial Owner (UBO) Register of Companies and other legal entities in Cyprus.
Registrar of Companies (RoC)
The competent authority for the maintenance of the central Register of UBO of companies and other legal entities shall be the Cypriot Registrar of Companies (RoC). The Department of RoC recently announced that the data collection for companies will begin on 22 February 2021 and from this date, all companies will be granted a period of 6 months (until 19 July 2021) for registration of the information about their UBOs. It is noted that the UBO information for Trusts, Express and Constructive, and other legal arrangements shall be maintained by the Cyprus Securities and Exchange Commission (CySec).
Companies Beneficial Owner
In the case of corporate entities, beneficial owner means:
(i)the natural person(s) who ultimately owns or controls a legal entity through direct or indirect ownership of a sufficient percentage of the shares or voting rights or ownership interest in that entity or through control via other means.
A shareholding of 25 % plus one share or ownership interest of more than 25 % in the customer held by a natural person shall be an indication of direct ownership.
A shareholding of 25 % plus one share or ownership interest of more than 25 % in the customer held by a corporate entity, which is under the control of a natural person(s), or by multiple corporate entities, which are under the control of the same natural person(s), shall be an indication of indirect ownership.
Control through other means may be determined, inter alia, in accordance with the criteria in Article 22(1) to (5) of Directive 2013/34/EU;
(ii)if, after having exhausted all possible means and provided there are no grounds for suspicion, no person under point (i) is identified, or if there is any doubt that the person(s) identified are the beneficial owner(s), the natural person(s) who hold the position of the senior managing official(s), the obliged entities shall keep records of the actions taken in order to identify the beneficial ownership under point (i) and this point;
Trusts Beneficial Owner
In the case of trusts, beneficial owner means:
(iii)the protector, if any;
(iv)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;
(v)any other natural person exercising ultimate control over the trust by means of direct or indirect ownership or by other means;
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 above;
Access to Registers
The 4th AML provisions provided for unlimited access to the registers by Competent Authorities and access by obliged entities within the framework of Customer Due Diligence. The 5th AML provides additional access by the public.
In the case of trusts and similar legal arrangements, access to beneficial ownership information should be granted to any natural or legal person that can demonstrate a legitimate interest. Access should also be granted to any person that files a written request in relation to a trust or similar legal arrangement which holds or owns a controlling interest in any corporate or other legal entity incorporated outside the European Union.
What to do now
Companies are invited to start collecting the above-mentioned information which they should already have in their files, based on the provisions of article 61(A) of the Prevention and Combating of Money Laundering and Terrorist Financing Law. We will share more detailed information regarding the Cyprus UBO Register once additional clarifications are provided by the ROC.
How can we help?
We are at your disposal to discuss the effect of the above provisions to your corporate structure and arragements.