Introduction
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.
Implementation of 4AMLD
The 4AMLD aims to prevent the EU financial system from being used for the purposes of money laundering and terrorist financing activities. In order to combat such activities, the 4AMLD sets out numerous measures to help member states bolster their defences through the identification and mitigation of associated risks. The verification of the UBOs of legal entities is considered to be an essential factor in the pursuit of this aim and will create a system of transparency.
Each member state must establish two central UBO registers in which adequate and accurate information is registered for legal entities within their jurisdiction:
- a Company Register for corporate and other legal entities; and
- a Trust Register for trusts and other types of legal arrangement.
For each register, the 4AMLD establishes certain standards on matters such as:
- the information that is required;
- the accessibility of the registers; and
- the definition of 'beneficial owner'.
The deadline for implementing the 4AMLD into Cypriot law was 26 June 2017.
Publisher: International Law Office
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