Cyprus on track to meet anti-money laundering measure

Officials have given assurances that by September Cyprus will do a test run of an ultimate beneficial owners (UBO) register for companies, and that by the end of the year the register will link to an EU-wide electronic platform.

The European Commission has advised EU member-states to link their national UBO registers to the EU-wide platform by the fourth quarter of 2023.

Speaking to the Stockwatch news outlet on Tuesday, Registrar of Companies Ιrini Mylona-Chrysostomou said authorities here are “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 per cent.

Once the software undergoes a final test, it will be given to a contracted private IT company to make any necessary tweaks, ensuring interoperability with the EU-level electronic platform. The online register will then go ‘live’.

Earlier, Brussels had warned it may initiate infringement proceedings against Nicosia should the latter not have in place the electronic UBO register in time.

“The Registrar of Companies will certainly not let the Republic of Cyprus pay fines for breach of EU directives,” Chrysostomou commented.

“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.”

The official also recalled that financing for the online platform comes from the Recovery and Resilience Fund, and that failure to implement this action would result in loss of these allocated funds.

The relevant EU anti-money laundering (AML) directive requires all member-states to maintain a register of ultimate beneficial owners which will be centrally held. The directive was transposed into Cyprus’ jurisdiction in 2018.

The purpose of the UBO registry is to provide transparency and a properly updated database, where every company, or any other legal entity incorporated in Cyprus, is required to maintain adequate information on its beneficial owner.

The Cypriot law defines an UBO as a natural person who has ultimate control of the company. This is further explained as an individual who ultimately owns or controls 25 per cent plus one share, or an ownership interest of more than 25 per cent in the customer in a company.

The registry will be accessible to the competent regulators/supervisory authorities – including the Bar Association, the Central Bank of Cyprus and the Cyprus Securities and Exchange Commission

In addition, the police, the customs and tax departments, as well as the Unit for Combating Money Laundering and Terrorist Financing (Mokas) are eligible to have access to the information of the register.

Any person or organisation who can prove a legitimate interest can file an application to the Registrar of Companies and, provided this is approved, will have access to the name, month and year of birth, nationality and country of residence of the UBO, and also to the type of rights he/she holds.