Cyprus to Test UBO Registration System for AML Compliance
The government of Cyprus has indicated it will test a system for registering ultimate beneficial owners by September, and eventually link it to an EU-wide electronic platform.
Cyprus has ensured compliance with the anti-money laundering regulation, the ultimate beneficial owner of companies will be tested in September, and by year end, it will be linked to an electronic platform in the EU. National UBO registers should be linked to the EU-wide platform by the end of the fourth quarter of 2023.
According to the Registrar of Companies, Mylona-Chrysostomou, “the Registrar of Companies here is very close to completing the electronic register. The Registrar of Companies has contacted hundreds of companies requesting them to provide their respective UBOs. To date, Chrysostomou said, the compliance rate has reached 98%.”
Upon completion of the final software test, the software will be given to a private IT company for any required adjustments to ensure interoperability. As soon as the online register has gone live, the public will have access to it. The European Union had previously warned Nicosia that it may initiate infringement proceedings against the country if the electronic UBO register was not in place by the deadline.
Chrysostomou commented, “The Registrar of Companies will certainly not let the Republic of Cyprus pay fines for breach of EU directives. The electronic register with the real beneficial owners will be incorporated into the respective European one within the timeframe set by the EU, that is, before the end of this year, and this will be done in practice.”
A further statement by the official indicated that the online platform is financed through the Recovery and Resilience Fund, and failure to complete this action would result in the loss of these funds. All member states are required to maintain a centrally located register of ultimate beneficial owners as part of the relevant EU anti-money laundering (AML) directive. As of 2018, Cyprus has transposed the directive into its legal system.
A UBO registry serves as a source of information about beneficial owners for all companies incorporated in Cyprus, as well as for other legal entities. Generally, UBOs are individuals with ultimate control over businesses. More than 25% of a company’s shares are owned or controlled, individuals who own 25% plus one share, or owning more than 25% of a company.
Registries will be accessible to regulatory and supervisory agencies, most notably the Cyprus Securities and Exchange Commission, the Cyprus Central Bank, and the Cyprus Bar Association. Aside from the police, customs, tax, and the Mokas Unit for combating terrorist financing and money laundering have access to the register.
The Registrar of Companies can grant legitimate interest persons or organisations access to names, dates of birth, nationalities, countries of residence, and types of rights. Upon approval, the UBO will be able to obtain the information.
Suggested Reads:
THE US SECURITIES AND EXCHANGE COMMISSION IDENTIFIES AML FAILURES OF US BROKERAGE FIRMS
CYPRUS MAKES PROGRESS IN IMPLEMENTING AML MEASURES
CYPRUS MAKES STRIDES IN RESTORING ITS REPUTATION BY DEALING WITH AML CONCERNS
