On 16 December 2024, the department of the Registrar of Companies and Intellectual Property (RCIP) published a directive introducing the changes that come into force in the form of the Prevention and Combating of Money Laundering from Illegal Activities (Amendment) (No. 2) Law of 2024, N.141(I)/2024, which was published on 06 December 2024.
Below are the main changes:
Shift of Financial Penalties
- Financial penalties will now apply solely to legal entities that fail to submit ultimate beneficial owner (UBO) information as required by Law 188(I)/2007 and the relevant Directives.
- Directors and secretaries are exempt from direct financial penalties.
Accountability for Non-Compliance
- Directors or managing directors who neglect to ensure the submission of UBO information may be held jointly and/or severally liable alongside the company to cover any penalties imposed.
Revised Penalties
- A fixed penalty of €100 will apply on the first day of non-compliance.
- An additional €50 will accrue for each subsequent day of continued non-compliance.
- The total penalty is capped at €5,000 per legal entity.
Enhanced Authority for the RCIP
- The RCIP can issue directives to establish administrative review procedures and/ or facilitate objections to penalties.
- The RCIP has the power to strike-off from the registry legal entities failing to update UBO information.
- The RCIP may also seek court injunctions to enforce compliance.
Extensions and Withdrawal of Financial Penalties
To address practical challenges and support compliance, several deadlines have been extended:
- Submission of UBO Information
- The deadline for submitting UBO data has been extended to 31 January 2025.
- 2024 Data Confirmation
- The deadline to confirm UBO data for 2024 has been extended to 31 March 2025.
Additionally, financial penalties imposed as of 01 April 2024, will be revoked, and affected legal entities will receive refunds.
However, starting 01 February 2025, non-compliance will result in administrative sanctions in line with the updated law.
Positive Impact:
These amendments demonstrate a balanced approach, recognizing the needs of businesses, particularly SMEs, while upholding anti-money laundering regulations. The extended deadlines offer companies a grace period to ensure accurate UBO information is reported.
What You Should Do:
- Submit or Update UBO Information: Ensure your company’s UBO data is submitted to the registry by 31 January 2025.
- Confirm 2024 Data: Verify the accuracy of your company’s 2024 UBO information by 31 March 2025.
- Seek Professional Guidance: For assistance with UBO reporting or any compliance inquiries, contact our team of experts.
By taking these steps, your company can maintain compliance with Cyprus’ UBO reporting regulations and avoid potential penalties.
Our compliance experts at Mikaella Psillidou LLC are available to assist with these reporting obligations. For guidance, please contact us at info@psillidoulaw.com.