The Department of Company Registration and Intellectual Property imposed fines totalling 13.6 million euro on companies and individuals who failed to submit information to the Register of Final Beneficiaries. It is worth noting that of this amount, only 756 thousand euros were collected from the offenders.
This was announced on Wednesday 31st July by the Head of the Department of Company Registration and Intellectual Property, Irini Milona-Chrysostomou.
She also noted that a total of 500 appeals had been lodged by legal entities and individuals against the imposition of fines. Under the new rules, Milona-Chrysostomou
called on the Cypriot Finance Ministry to halve the fines and to impose sanctions not on secretaries, but on company directors who refuse to provide the required data.
As a reminder, from 1 April 2024, fines will be levied on those legal entities that have not submitted data on ultimate beneficiaries. The first "deadline" for submitting data on the ultimate beneficiaries of companies expired on 31 July 2022. However, on 5 August of the same year, the Ministry announced that it would introduce a transitional period until 30 September 2023, during which companies that were late in submitting data would not be fined. This was subsequently extended for a further 6 months.
The creation and launch of the UBO electronic register was carried out by a private company that won the state tender.
The money for the digital version of the register of beneficial owners was provided by EU funds under the Cyprus Recovery and Development Programme. Note that a beneficial owner or Ultimate Beneficial Owner (UBO) is an individual who ultimately owns or controls a company.
The following types of ownership or control can be distinguished:
- Direct - the beneficiary directly owns more than 25% of the shares (25% + 1 share) or has an interest in the company of more than 25%;
- Indirect - the Beneficiary owns shares/interests in the Company in the above amounts through a legal entity;
- mixed - the beneficiary's direct and indirect shareholdings total more than 25%.
The beneficial owner of a company can be an individual, a trust, a foundation or a listed company. If the beneficial owner of a company is a partnership, the individuals behind the partnership who control the company must be disclosed.
What details of beneficial owners are recorded in the register?
About individuals:
- Full name, date of birth, nationality, current place of residence;
- Passport details, country of issue;
- Level of ownership (direct or indirect);
- Date of entry of the individual's data in the Register as a UBO;
- the date on which the individual's details were changed or the date on which the individual ceased to be the company's UBO.
About trusts, foundations:
- Name, registration number (not applicable to trusts outside Cyprus), country of jurisdiction;
- Legal address (not applicable to trusts);
- Nature and extent of beneficial interest;
- Date of registration of the legal entity as a UBO;
- the date of the change of the legal person or the date on which the legal person ceased to be a UBO of the company.
The penalty for failing to provide the information is a fine of €200 and an additional €100 for each day of delay (the maximum fine may be up to €20,000). If, after receiving the notification, the company fails to provide the information or fails to comply with the time limits for entering the information, or knowingly enters false information in the register, the company and its officers may be held criminally liable (imprisonment for up to one year and a fine of up to 100,000 euros, or no fine).
It should be noted that initially only competent and law enforcement authorities such as MOKAS (Money Laundering Unit), the Cyprus Police and the Central Bank had access to the register. This right was then granted to individuals upon application to the Department and payment of a fee of €3.5. However, the European Court of Justice later ruled in consolidated cases C-37/20 and C-601/20 that public access to the information contained in the register of ultimate beneficial owners was suspended. The Court reasoned that the availability of such access constituted a serious interference with the fundamental right to privacy and infringed personal data protection practices.