Minister accused of ‘lust for fines’

Tempers flared in parliament on Tuesday when MPs piled on Commerce Minister George Papanastasiou, berating him for the fact that thousands of companies face hefty fines for not having registered their ultimate beneficial owners on time.

Legislators even coined the phrase “a lust for fines” in describing the government’s policy to penalise non-compliant companies, treating them like “criminals”.

This treatment of corporations harkens to third-world countries, MPs said.

The remarks drew a terse response from Papanastasiou, who sardonically told MPs “not to tell me off, as if we’re in a classroom with a disciplinarian teacher.”

On the comments heard that the treatment of the companies makes Cyprus look bad abroad, the minister quipped: “Cyprus has no credibility in any sector anyway.

“I can testify to that from my experience as a manager in multinational corporations.”

The current administration is striving to change that, he added.

The spat concerned the fines being slapped on companies for failing to register their ultimate beneficial owners (UBOs) by the December 31 deadline, under a directive issued by the Registrar of Companies last December.

Under that directive, all corporate entities should have filed their updated UBO data by that date. Companies not complying would be fined €200 on January 1, 2024, plus €100 per every continuing day of non-compliance.

MPs heard that so far a total of €2 million in fines has been imposed on non-compliant companies.

Papanastasiou said the deadline for registering UBOs would be extended to March 31. From now until then, no new fines would be imposed. It was unclear, however, whether the fines imposed so far would be voided – that was up to the attorney-general.

The minister did concede that errors were made.

In parliament, both the Bar Association and the Institute of Certified Public Accountants demanded that all fines accrued be deleted.

For many small companies, they said, the penalties are too punishing.

Earlier, representatives of business associations had complained that the Registrar’s website wouldn’t allow them to make a UBO filing unless the pending fine is paid first. They also said that frequently the website is offline, meaning they can’t access it. And some claimed that when they call the Registrar’s office, no one picks up the phone.