The Prevention and Suppression of Money Laundering and Terrorist Financing Law has been amended by the Amending Law 13(I)/2018 (the “Amending Law”), which was published in the official government Gazette of the Republic of Cyprus on the 3rd April, 2018.
One of the most noteworthy amendments introduced by the Amending Law are the numerous new definitions, two of the most fundamental ones being the definition of the term “PEP” (politically exposed persons), which has been broken down to include in detail the predominant functions of a PEP as well as a list of a PEP’s relatives and associates who fall under the definition and the definition of the term “beneficial owner” which is now considered to be a natural person who holds 25% + 1 in the issued share capital of a company, abolishing the previous percentage requirement of 10% + 1. Importantly, the Amending Law provides that in the event that the beneficial owner is not possible to be identified and no reasonable suspicions as to his identity exist, then the director of the company should be identified as the beneficial owner of such legal entity. Consequently, the Amending Law provides that any breach in regards to obligations relating to disclosure of information, shall result in a criminal offence punishable with up to 2 years of imprisonment or a fine not exceeding the amount of EUR 50,000.
The cornerstone of the Amending Law, is the implementation of a new obligation which requires all legal entities established in the Republic of Cyprus to acquire and keep adequate and accurate information in relation to their beneficial owners, including details of the rights held by each beneficial owner, in a central registry of beneficial owners and other legal entities, in which several authorities, such as the tax department and the police, have unlimited access to.
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The author of the article is Sophia Stylianou.
Sophia is a legal consultant at Royal Pine & Associates. She is a qualified lawyer with experience in the corporate field and an admitted member at the Cyprus Bar. She holds an LL.B from the University of Surrey and has completed the LPC with BPP University.
* This publication has been prepared as a general guide and for information purposes only. It does not purport to be comprehensive or to render legal advice.
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