Cyprus has activated the beneficial owners register, thus completing the transposition of the 4th AML Directive (Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing) into national law.
The Cypriot Government appointed the Registrar of Companies and Official Receiver (the RoC) as the competent authority to keep the beneficial owners register concerning companies and other legal persons.
Companies and other legal persons have 6 months as of 18 January 2021 to file with the RoC the information concerning their beneficial owners. For the time being, the beneficial owners register will be accessible to competent authorities, following a request to the RoC.
While the creation of the beneficial owners register was provided for under section 61Α(4)(a) of the Prevention and Suppression of Money Laundering Activities Law of 2007, as amended (the AML Law), it is only now that the Government issued subsidiary legislation activating the beneficial owners register.
The 4th AML Directive required Member States to allow access to beneficial ownership information on corporate and other legal entities in a sufficiently coherent and coordinated way, through the central registers in which beneficial ownership information is set out, by establishing a clear rule of public access, so that third parties are able to ascertain, throughout the Union, who are the beneficial owners of corporate and other legal entities.
A ‘beneficial owner’ means any natural person(s) who ultimately owns or controls the customer and/or the natural person(s) on whose behalf a transaction or activity is being conducted and includes at least:
(a) in the case of corporate entities:
(i) the natural person(s) who ultimately owns or controls a legal entity through direct or indirect ownership of a sufficient percentage of the shares (typically 25%) or voting rights or ownership interest in that entity, or through control via other means, other than a company listed on a regulated market that is subject to disclosure requirements consistent with Union law or subject to equivalent international standards which ensure adequate transparency of ownership information
(ii) if, after having exhausted all possible means and provided there are no grounds for suspicion, no person under point (i) is identified, or if there is any doubt that the person(s) identified are the beneficial owner(s), the natural person(s) who hold the position of senior managing official(s), the obliged entities shall keep records of the actions taken in order to identify the beneficial ownership under point (i) and this point;
(b) in the case of trusts:
(i) the settlor
(ii) the trustee(s)
(iii) the protector, if any
(iv) the beneficiaries, or where the individuals benefiting from the legal arrangement or entity have yet to be determined, the class of persons in whose main interest the legal arrangement or entity is set up or operates
(v) any other natural person exercising ultimate control over the trust by means of direct or indirect ownership or by other means.
During the second half of 2021, it is envisaged that the beneficial owners register will be in full operational form and will become accessible in accordance with the requirements of the 5th AML Directive (Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing).
The beneficial owners register will be accessible (once in full operation) by competent authorities (such as the Tax Department, the Customs & Excise Department and the Police), obliged entities in the context of performing their due diligence obligations and any person or organisation that can demonstrate a legitimate interest.
The AML Law defines 'legitimate interest' as meaning solely the interest of a person with respect to the suppression of money laundering activities and the offences prescribed under applicable legislation.