The Cyprus Parliament has passed the new amendment to the Law for the Prevention and Combating of Legalization of Income from Illegal Activities (amendment Law N.141(I)/2024), which introduces the following main amendments to the Law relating to the obligation imposed for the filing of the Ultimate Beneficial Owners (UBO) of each Cyprus Company with the Registrar of Companies:
- Going forward, fines will be imposed only on the company or other legal entity that refuses or fails or neglects to fulfil the reporting obligations for beneficial owners, as these obligations arise under the provisions of Law 188(I)/2007 and the Directives issued thereunder. That is, no monetary fines will be imposed on each director and secretary.
- A director or manager of a company which refuses or fails or neglects to fulfil the reporting obligations for beneficial owners shall be jointly and/or severally liable with the company for the repayment of the financial penalty imposed on the company.
- The fines have been revised. In particular, a fine of one hundred euros (€100) will be imposed on the first day of the infringement and a further fine of fifty euros (€50) for each day of continued infringement, up to a maximum total fine of five thousand euros (€5,000) per company or other legal entity.
- The Law has introduced a provision empowering the Registrar of Companies to issue a Directive to establish the procedure for administrative review and/or submission and consideration of an appeal against a decision to impose a financial penalty.
- The Law has introduced a provision giving the Registrar of Companies the power to remove from the register of business entities a company or other legal entity that refuses or fails or neglects to comply with its obligations to update beneficial ownership information, by analogy with the procedure for removing a company under section 327 of the Companies Act or subsection (5) of section 57 of the Partnerships and Trade Names Act.
- A new provision was introduced, empowering the Registrar of Companies to apply to the Court for an injunction ordering any person to comply with the obligations arising from section 61A of Law 188(I)/2007 and the Directives issued thereunder.
Extension and withdrawal of Fines
In the context of the review of the practical implementation of the legislation and taking into account the high financial burdens, the size of the companies in the Republic of Cyprus, the majority of which are SMEs, the high compliance rate achieved, as well as the compensatory measures included in the aforementioned amendment of the Law, the executive authority, in consultation with the House of Representatives, decided to grant an additional extension of the deadline for the submission of information on the actual rights and obligations of companies in the Republic of Cyprus.
In order to implement the above decision, the Registrar of Companies issued on 16/12/2024 the amending Directive KDP423/2024. At the same time, the referenced KDP also provides for an extension of the stipulated time for processing the confirmation procedure for the year 2024 until 31 March 2025.
It is stressed that as of February 1, 2025, non-compliance with the reporting of beneficial ownership data will result in the imposition of administrative and other sanctions, in accordance with the provisions of Law 188(I)/2007 on the Prevention and Combating of Money Laundering, as amended and passed by the Chamber of Deputies and implemented on 16/12/2024 and of the KDP112/21, as amended and in force.
In accordance with the above regulations, the Department of the Registrar of Companies has proceeded to revoke the financial charges imposed as of 01/04/2024 and refund the relevant amounts of money paid.
The reimbursement of the funds will be carried out as follows:
- For online payments made via JCC, the amount will be refunded directly to the card with which the payment was made, without any further action on the part of the affected person.
- For payments made at the Cashier’s Office of the Registrar of Companies and Intellectual Property Department, the amount will be refunded to the applicant’s Bank Account upon presentation to the Department’s Cashier’s Office of the CE1 form, accompanied by the FIMAS Payment Authorization Form and a photocopy of the payment document and the International Bank Account Number (IBAN) to be credited, as described in the Authorization Form.
It is noted that the Register of Beneficiaries is electronic and can only be updated at the following link: https://ubo.meci.gov.cy
For any further guidance regarding this procedure or if you require an initial consultation, please do not hesitate to contact our Law Firm at [email protected], +357 22 251 777 or +357 25 261 777 or please visit our office in Nicosia or Limassol.