Introduction
The Republic of Cyprus has embarked on a significant regulatory update with the implementation of the final electronic system for the Register of Beneficial Owners (UBO Register). This move is aligned with the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2021, reinforcing Cyprus’s commitment to financial transparency and anti-money laundering efforts.
Launch of the Final UBO Register Solution
The Registrar of Companies and Intellectual Property announced the commencement of the final UBO Register system, effective from November 14, 2023. This system, accessible via the Government Gateway Portal (Ariadni), marks a pivotal shift towards a comprehensive digital approach in monitoring and managing beneficial ownership information.
Phased Implementation Approach
The implementation is structured into three distinct phases, ensuring a smooth transition for organisations and their officers:
- Phase A (14/11/2023 – 31/12/2023): During this initial phase, all entities registered under the Companies Law, Cap.113, European Public Limited Liability Companies (SE), and Partnerships are required to input and update their UBO information. This phase is crucial as it provides a grace period without fines, encouraging entities to adapt to the new system.
- Phase B (1/1/2024 – 29/2/2024): In this phase, entities that failed to comply during Phase A will face fines. The fines will accrue from January 1, 2024, until the date of submission of the UBO details. It’s noteworthy that compliance in Phase A allows entities to amend and resubmit details without financial burdens.
- Phase C (From 1/3/2024 onwards): This phase marks the full-fledged operation of the system, offering functionalities like updating UBO information, electronic search in the Register, and requests for exemptions. Non-compliance at this stage could result in significant fines, emphasizing the importance of adhering to the updated regulations.
Compliance and Penalties
Entities are mandated to comply with the new system by re-submitting all relevant UBO details by December 31, 2023. Non-compliance will trigger an automatic administrative fine of EUR 200, with additional daily fines of EUR 100 accruing up to a maximum of EUR 20,000, notwithstanding the criminal liability or prosecution of any officer. Notably, officers who have exercised due diligence and are not responsible for the non-compliance may be exempt from fines, subject to providing supporting documentation.
Exemptions and Declarations
Certain entities, such as those listed on regulated markets subject to EU disclosure requirements, may be exempt from disclosing beneficial ownership information. However, these entities must still declare their exemption grounds in the UBO Register by the specified deadline.
Conclusion
The new UBO Register system in Cyprus represents a significant step towards enhanced financial transparency and compliance. Entities operating within Cyprus must heed these changes and ensure timely compliance to avoid penalties. This development not only aligns Cyprus with international anti-money laundering standards but also fortifies its position as a responsible and transparent financial jurisdiction.
