An opinion is expected by Friday on the handling of both those served and those received
The temporary platform was created in 2021, without the ability to transfer company data to the new platform, nor to check the quality of the registered data.
Of Maria Herakleous
An interim platform was the temporary solution decided in 2021 and implemented by the Ministry of Innovation, with the aim of Cyprus complying with the European directive on the creation of a register of beneficial owners of companies. This is a directive that strengthens the transparency of companies and the member states in which they are registered. However, this transparency does not seem to have been served – as was seen from yesterday's debate at the House Commerce Committee which discussed the issue – as, as reported by the company that undertook the creation of the IBM platform, the platform did not have the ability to transfer the data to the final platform, as well as the ability to control the data that was registered. So when it came time to move to the final digital platform, essentially no assets could be transferred, and the process would have to be done from scratch. The report by the contracting authority, that the data of the temporary digital platform had been saved in a PDF file, also caused a sensation. For its part, the companies registrar attributed this weakness to the tight timetables. The result of this was the alalum that was created last week in the market and businesses, which were faced with serious fines. Some of them, amounting to 2 million euros in total, have been paid. The matter is expected to be discussed at the next session of the Audit Committee. For now, what was decided yesterday is seen as giving businesses the breathing space and time they need to comply. As the Minister of Energy Giorgos Papanastasiou mentioned, with a political commitment, the deadline for registering the data of all companies is extended until March 31 without exception of companies. And the issue of fines will be resolved after the opinion of the Legal Service.
The minister's proposal is not to enforce the imposed fines, which reach 100 euros per day and amount to up to 20 thousand euros per company. A total of two million euros have been collected from companies that accepted the fine in order to proceed with the registration of the data. Now, following a proposal by the competent minister and also by the Trade Committee, it is expected that, by Friday, the Legal Service will give an opinion as to whether this possibility exists so that the fines imposed on the companies for not submitting information to the register will not be enforced, from January 1, 2024. The imposition of fines will resume after the end of the mentioned new deadline – from April 1 onwards.
At the same time, the minister's thought, which he also mentioned in the Parliament, was to correct the point for acceptance of the fine by the companies, so that they could proceed with the registration of their details. Mr. Papanastasiou admitted before the Parliament that there were weaknesses in the operation of the intermediate platform that had to do with the control of the data as well as the possibility to transfer the data of the platform to the final platform of the register of beneficial owners. “I admit that, yes, it very quickly became an intermediate platform, it was not the best we could have had. We did it with a view to complying with the European Commission, and we are now faced with this dilemma of getting it right.” However, the minister took responsibility for mistakes, the foundations of which were laid by the previous government.
The political commitment of the Minister of Energy for an extension until 31 March, he satisfied the requests made in a letter to the registrar of companies last week by SELK, Pancypriot Bar Association, KEBE, STEP Cyprus, Cyprus Fiduciary Association and CIBA, who asked for an extension until the end of February.
Among the requests was the possibility to register the details of the companies and the beneficial owners, without requiring the payment of the fine calculated until that day. This will significantly help update the Register, allowing the country to remain compliant with the relevant European directive and will not unnecessarily penalize companies and other legal entities that wish to comply. Through the letter, they also requested that the administrative act to automatically impose a fine on those who have complied with the registration of beneficial owners in the final settlement be revoked, while for those who have already paid the fine, a way should be found to refund the amounts collected by the Department of the Registrar of Companies. A sensation was caused by the report from the Bar Association that all the fines imposed from January 1 until last Friday are illegal, since they were imposed at a time when the state itself did not let the companies comply with their obligations.