Amendments to the Cypriot AML Law: Key Updates for UBO Register Compliance

The Cypriot Prevention and Suppression of Money Laundering Activities Law (the “AML Law”) was amended on 6 December 2024, introducing notable changes to the provisions concerning the central registers of beneficial owners (“UBO Registers”). These changes aim to address market concerns on practical implementation matters, while at the same time streamlining compliance processes and strengthening enforcement mechanisms.

 Key Amendments of Interest

I. Reduction of Fines for Non-Compliance

A notable change is a significant reduction of fines for reporting defaults relating to UBO Registers. Previously, fines were capped as high as EUR 20,000, giving rise to concerns regarding the proportionality of this enforcement measure against the intended purpose.

The amendment aims to ease the financial burden on affected entities, while still ensuring compliance with transparency and reporting obligations. Fines now amount to an administrative fine of EUR 100 imposed on the first day of non-compliance, increasing by EUR 50 for each day of continued default, with the following caps:

• EUR 5,000 for reporting defaults relating to the UBO Register of Companies and other Legal Entities and the UBO Register of Trusts.
• EUR 2,000 for reporting defaults relating to the UBO Register of Associations, Foundations, Federations and Unions.

II. Consolidation of Fine Imposition

Previously, separate fines for non-compliance were imposed against both the entity in default and each of its officers. The amended AML Law now provides for a single fine being imposed against an entity in default, with its officers being jointly and severally liable, together with the relevant entity, for the payment of the same.

Additionally, company secretaries are now expressly excluded from liability for any failure of the company to which they serve as secretary to comply with its reporting obligations.

III. Registrar of Companies: Expanded Enforcement Powers

 Importantly, the Registrar of Companies has been granted two new enforcement powers regarding the UBO Register of Companies and other Legal Entities:

• The power to apply to court for an order directing specific persons to comply with their relevant reporting obligations under the AML Law and any directives issued by the Registrar of Companies thereunder; and
• The power to strike a company off the register of companies of the Republic of Cyprus, for failure to comply with its UBO reporting obligations.

It is anticipated that the Registrar of Companies will proceed with further amendments to the directives previously issued, aligning such directives with the changes introduced to the AML Law, including implementing a formal process enabling companies to submit objections against a decision for imposition of a fine.

Our team remains available to advise further on the steps required to ensure ongoing compliance with the relevant reporting requirements, and to provide any necessary assistance.