The Department of Registrar of Companies and Intellectual Property (DRCIP) announces that on 06/12/2024, the Prevention and Suppression of Money Laundering (Amendment) (No. 2) Law of 2024, numbered N.141(I)/2024, was published. The main amendments are as follows:
1. Monetary Penalties: Monetary penalties will now only be imposed on the company or other legal entity that refuses, omits, or neglects to fulfill its obligations to submit information about beneficial owners. These obligations arise under the provisions of Law 188(I)/2007 and its corresponding Directives. Penalties will no longer be imposed on individual directors or secretaries.
2. Liability of Directors or CEOs: A director or CEO of a company that refuses, omits, or neglects to fulfill the obligations for submitting beneficial owner information will be jointly and/or separately liable with the company for paying the penalty imposed on the company.
3. Revised Penalties: Penalties have been revised as follows:
- A €100 fine for the first day of the violation.
- An additional €50 fine for each subsequent day of the violation.
- A maximum total penalty of €5,000 per company or other legal entity.
4. Administrative Review and Appeals: A new provision empowers the Registrar of Companies to issue a Directive (Regulation) establishing procedures for administrative review or appeals against penalty decisions.
5. Deletion from the Register: A new provision authorizes the Registrar of Companies to delete a company or other legal entity from the Register of Business Entities if it refuses, omits, or neglects to fulfill its obligations to update beneficial owner information. This procedure is analogous to the deletion process under Article 327 of the Companies Law or subsection (5) of Article 57 of the Partnerships and Trade Names Law.
6. Court Orders for Compliance: A new provision authorizes the Registrar of Companies to request a court order compelling any person to comply with the obligations arising from Article 61A of Law 188(I)/2007 and its corresponding Directives.
Extension and Reversal of Monetary Penalties
Considering the practical implementation of the legislation, the high penalties, the size of companies in the Republic of Cyprus (mostly SMEs), the high compliance rate achieved, and the mitigating measures included in the recent amendment to the Law, the executive authority, in coordination with the House of Representatives, has decided to extend the deadline for submitting beneficial owner information for all companies and other legal entities until 31 January 2025.
To implement this decision, the Registrar of Companies issued Directive KDP 423/2024 on 16/12/2024. This Directive also extends the deadline for completing the verification process for the year 2024 until 31 March 2025.
From 1 February 2025, non-compliance with the submission of beneficial owner information will result in administrative and other penalties in accordance with the provisions of the Prevention and Suppression of Money Laundering Law 188(I)/2007, as amended and enacted by the House of Representatives, effective 16/12/2024, and Directive KDP 112/21, as amended and in force.
Reversal of Penalties and Refund of Paid Amounts
Following the above measures, DRCIP will reverse penalties imposed since 1 April 2024 and refund the amounts already paid. Refunds will be processed as follows:
a. For online payments made through JCC, the amount will be refunded directly to the card used for the payment without any action required by the affected party.
b. For payments made at the DRCIP Cashier, the amount will be refunded to the applicant's bank account upon submission of Form KE1, accompanied by the payment authorization form from FIMAS, a copy of the payment receipt, and the IBAN to be credited, as described in the Authorization Form.
The Register of Beneficial Owners is electronic, and updates are made exclusively through the link: https://ubo.meci.gov.cy.
For any questions or information, interested parties can contact the email address: ubos@meci.gov.cy.