Cyprus launches UBO register
Cyprus has elevated its ultimate beneficial owner (UBO) reporting status by implementing all of the mechanisms for the creation, operation and maintenance of a UBO register.
The UBO register is a requirement emanating from the amended Fourth EU Anti-money Laundering Directive (4AMLD).
The 4AMLD was transposed into national legislation on 3 April 2018 by the Prevention and Suppression of Money Laundering and Terrorist Financing Law (13(I)/2018), Article 61A(4)(a) of which specifically provides for the introduction of a UBO register.
According to a 21 December 2020 announcement by the Companies Registrar Department, as amended, relevant entities must submit information on their UBOs for inclusion in a newly created and centralised UBO register within six months of 22 February 2021.
The 4AMLD imposes certain minimum standards for all member states. As part of the European Union's efforts to curtail the flow of illicit funds, these standards were recently enhanced by the Fifth EU Anti-money Laundering Directive (5AMLD).
Similar initiatives are also in the process of being implemented in all Organisation for Economic Cooperation and Development countries and may become accepted practice internationally.
The creation of UBO registers has been protracted, but entities must now prepare for their introduction in Cyprus.
The relevant announcements by the RoC highlight that implementation is imminent and that legal persons will have six months from 22 February 2021 to file the requested information.
Corporate and other legal entities incorporated in Cyprus must review their structures and ascertain which individuals will qualify as their UBOs. This exercise should be undertaken on a case-by-case basis and must be conducted before the imposed deadline.
Guidelines expanding on the UBO registration process, as well as applicable penalties for non-compliance, are expected to follow in due course, but it is suggested that the process of ascertaining and collecting UBO information be commenced without delay.
It is nevertheless important to keep in mind that law firms and other professionals have been legally required to keep such information for many years. The real novelty in this latest step towards transparency will be the eventual public access to UBO registers and how this will intertwine with privacy and data protection concerns.