Calls to reduce fines for late UBO submissions in Cyprus

According to Dorita Yiannakou's article published in Kathimerini Cyprus in Greek, high fines have spurred companies in Cyprus to comply with the submission of beneficial ownership details to the Company Registrar's Beneficial Ownership Register.

According to well-informed sources, the majority of registered companies have adhered to the legal requirements, with only a small percentage yet to submit ownership details. The significant penalties introduced after the latest deadline played a key role in driving compliance. Since April 1, violators face a fine of €200 for the first day of non-compliance, followed by €100 for each subsequent day, with fines reaching up to €20,000.

These measures align with the European Union's Fifth Anti-Money Laundering Directive, aimed at increasing transparency and combating illegal transactions and terrorist financing. The directive requires all EU member states to establish a central register of company beneficial owners to reveal the actual controlling parties behind legal entities.

Additionally, the inclusion of Ultimate Beneficial Owners (UBO) in the register has helped enhance Cyprus' reputation regarding tax evasion, tax avoidance, and money laundering. Once criticized for its role in facilitating suspicious transactions, Cyprus has now aligned with EU regulations, marking a significant step forward, albeit delayed.

The issue remains under discussion by the Parliamentary Committee on Commerce, which is reviewing proposals from the Cyprus Bar Association. The association has called for the cancellation of fines for late submissions, refunds for those who have already paid, and a reduction in future penalties, capping them at €250. The Legal Service and relevant authorities are expected to consider the proposal further.