It was only a matter of time for the Cyprus government to implement the provisions of the EU Fourth Anti-Money Laundering Directive (4AMLD), EU 2015/849, in relation to a central register of beneficial ownership[1].
AML regulation has been the subject of continuous revision to foster greater transparency around the world, and during its last session for 2020, on 16th December, the Council of Ministers took the long-awaited move to fully transpose the said Directive and appoint the Registrar of Companies (RoC) as the competent authority to maintain this Register.
All companies trusts and other legal entities in Cyprus have six months, from the 18th of January 2021 to the 19th of July 2021, to collect the information in relation to their beneficial ownership and report it to the RoC, which has developed a temporary platform to do so. The information collected will be transferred into a final system solution to be developed in the second half of 2021.
The registry will not be available to the public, but all legal persons and entities must comply and submit their beneficial ownership reports. This is because the implementation that took place was under the 4AMLD and not the EU Fifth Anti-Money Laundering Directive (5AMLD) which came into force on the 01st of January 2020 (EU 2018/843). This situation is unlikely to change until the end of 2021.
So, who will have access to the Registry? Access will be restricted to the competent authorities of the Republic of Cyprus, such as the Tax Department and the Police Department upon submission of a formal request to the Registrar. However, whether it will be accessible to any person or organization that can demonstrate a ‘legitimate interest’ as per the provisions of the 5AMLD, this will most likely be decided in a court of law.
As more details become available regarding compliance with the new directive, as well as potential exceptions to the obligations under the new rules, we will provide further updates and guidance, but all companies registered in Cyprus should begin gathering beneficial ownership data in anticipation of providing it to authorities operating the registry.
If you or your Cyprus entity is impacted by these new requirements, Aliant can help. Please contact us at +357 22000744 or sparparinos@aliantlaw.com.
[1] Beneficial owners of companies are defined as natural persons with a 25 per cent direct or indirect ownership of shares or voting rights, except for publicly listed companies. For trusts, the beneficial owners are the settlor, trustees, protector, beneficiaries and potential beneficiaries, or any other natural person exercising ultimate control over the trust.
