Globally, it has been highlighted the importance and the need for extended transparency, in business and corporate entities, to combat money laundering, terrorist financing and more generally, the abuse of the financial systems by criminals.
The European Union, in the aftermath of Panama Papers and Terrorist attacks, introduced, with the 4th AML Directive (EU) 2015/849, significant changes to the regulatory framework of prevention of money laundering, terrorist financing and organised crime, in order to protect “the integrity, proper functioning, reputation and stability of the financial system”. The European Union has taken steps to ensure the transparency of the beneficial ownership, the “key-factor in tracing criminals”, by requiring from the member states to establish Central Registers and from the corporate entities to disclose the information of their Ultimate Beneficial Owners (“UBOs”).
The 4th AML Directive was transposed into Cyprus Law on the 3rd of April 2018, by amending the Prevention and Suppression of Money Laundering Activities Law of 2007 (188(1)/2007). Consequently, the Council of Ministers, with its decision on the 16th of December 2020, appointed the Registrar of Companies and Official Recipient, as the competent authority for the maintenance of the central Register of UBOs and collection of all the necessary information.
The start date for data collection has been set on the 16th of March 2021. The companies will be granted a period of 6 months (i.e. until 16/09/2021) for registration in the system that has been developed, of the information concerning the real beneficiaries of their legal entity. The obligation to register and submit the information lies with the officials of the legal entity. The officials of the company are obliged to disclose the name and surname of the UBO, nationality, date of birth, ID or passport number and issuing country, address, nature and extent of beneficial interest and type of UBO (e.g. UBO, senior managing official etc).
Furthermore, the 5th AML Directive (ΕU) 2018/843, which has not been transposed into the national law of Cyprus so far, requires that the information maintained in the Register of UBOs will be available to the general public, upon registration and payment of a small fee. The legal entity will be informed of any access to its data, unless it is from an Authority. The public will have access to the following information of the UBO: name and surname, month and year of birth, nationality, country of residence, nature and extent of beneficial interest.
