To date, most companies have shown meager interest in registering with the Register of Real Beneficiaries. The beneficial owner is any natural person who owns or actually controls a corporate entity, or the natural person on whose behalf transactions or activities of a company are conducted. Despite the fact that the process started around the end of March 2021, however, as stated in an interview with “P” the general director of the Ministry of Energy, Trade and Industry Marios Panagidis, the interest in registration is quite small. The majority of companies have not yet revealed the Ultimate Beneficial Owners (UBO's), mainly for procedural reasons and due to the pandemic. However, there may be some companies that did not register in the register for reasons related to concealing data from illegal activities. It is noted that the registration of the data of the real beneficiaries in the system of the intermediate solution is not yet possible for the cooperatives. However, cooperatives can now create a cooperative profile in ARIADNE. The Registrar of Companies will make a relevant announcement as soon as the corresponding arrangements are made in the system of the intermediate solution for the cooperatives. The whole interview of Mr. Panagidis below:
How many companies have registered their UBOs so far?
The percentage of companies that are currently registered in the Central Register of Real Beneficiaries is relatively small. The Ministry of Energy, Trade and Industry and the Registrar of Companies, since last March when the harmonizing legislation was approved by the Parliament, have organized and participated in many informative professional meetings on the subject, however what we find is that more effort is needed. to persuade companies to fulfill their obligation in time and to register. We believe that this situation will soon change. On the one hand, by giving the public the choice to register the data to be done by the company officials, either natural or legal persons, without the need to identify these persons with a physical presence, and on the other hand with the dynamic information campaign we are preparing to run in the fall. Our goal is to get the message to the smallest company that registration in the Register of Real Beneficiaries is mandatory.
What do you think is the reason for the fact that even the largest volume of companies has not been registered?
What we initially identified was that there were difficulties in identifying the corporate profiles in KEP and KEPO. The pandemic also reduced public attendance at service points. Also, because a large number of companies have service providers appointed as managers / secretaries, we believe that they are waiting for the option to be implemented electronically and by the company officials through their own profiles in Ariadne. At the same time, it seems that small companies have not yet fully realized their obligation. We as a ministry immediately tried to find solutions to facilitate the situation, opening in principle other service points, such as the offices of the Registrar of Companies and our provincial offices. In addition, a six-month extension was given for the complete updating of the register, in order to give the necessary time to the companies to identify their corporate profiles, to collect and submit the data to the Register of Real Beneficiaries. Our next step is the information campaign, as I mentioned above, through which letters will be sent to each registered company stating the obligations and the ways in which they will be fulfilled. Note that the final date of full compliance is March 12, 2022.
Why did you go through this process? What is the goal?
First of all, let us say that the creation of the register stems from a harmonizing Directive, according to which all companies and other legal entities based in the EU, and therefore in Cyprus are required to register in the Register of Real Beneficiaries, through an electronic procedure , all the required details of their beneficial owners. This directive harmonizes and strengthens the framework for preventing and combating money laundering and terrorist financing. Recording accurate and up-to-date information about the true beneficiary of each company is a key factor in locating criminals who might otherwise be hiding their identity behind a corporate structure. This is the role of the registry: To become a tool to increase transparency, precisely in order to prevent and combat the use of companies and other legal entities for money laundering and terrorist financing, at a time when money laundering, terrorist financing and organized crime remain major problems for the international community. At the same time, the EU aims to link national registries and other Member States through the European Central Platform.
What procedure does one have to follow to register?
At this stage, in order to be able to enter the data in the intermediate solution system, each company should first create a company profile in the Ariadne Portal. Once the account is created, the company must identify it with a physical presence at one of the appropriate identification points. That is, an official of the company, or a person acting on behalf of the company, should submit the necessary documents to the KEP, KEPO or to the provincial offices of the Registrar of Companies after an appointment, or bring the application to the offices of the Registrar of Companies in Nicosia between the hours of 9.00-11.00 p.m. In addition to the above option, from October it is expected that the possibility of submitting these data by company officials (either natural or legal person), for all companies in which they are appointed, and without the need for identification with physical presence.
Are there penalties for companies not registering UBO's?
At the stage of the interim solution, no penalties will be imposed for those companies that do not submit the details of the real beneficiaries within the time limits mentioned in the instruction of the Registrar of Companies. Failure to comply with the reporting obligations of the beneficial owners of companies and other legal entities is a criminal liability for the company and any of its officials.