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Difficulties over set up of Register of Ultimate Beneficial Owners

December 16, 2019 at 10:18am
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Even though the Register of Ultimate Beneficial Owners is scheduled to come into Cyprus’ jurisdiction by January 2020, details over the way authorized persons will have direct access to the necessary information are still unclear.

This is what insiders told Phileleftheros, with one adding that the Department of Registrar of Companies and Official Receiver is still in talks with involved parties over the ‘formula’ of operation of the Register. And that its  operation could be postponed for a few months.

Representatives of the Ministry of Finance, the DRCOR and other stakeholders will meet again over the coming days to take final decisions on how data should be accessed and revealed.

The Register will be set up within the framework of EU Directive AML 4, which specifies the rules for tightening the fight against money laundering.

Under the directive, the “real owner” of a company is defined as any natural person or persons who ultimately own a 25% plus of shares. The purpose of creating the Registry afterall is to provide transparency on shareholders and owners of companies.

However, what seems to be the real difficulty is the free access of the public to this Register – something also stipulated in the Fifth Directive.

This provision, however, creates a risk to the stability of the service industry since companies can be targeted by individuals who want to harm foreign-based companies based in Cyprus, according to an insider.

That’s why lawyers and accountants demand that authorities and bodies with a legitimate interest only should be allowed access.

At the same time, express trusts should obtain and maintain adequate, accurate and up-to-date information on the true beneficiaries of a company. This specific  register, to be in operation by March 2020, will be in the hands of the Cyprus Securities and Exchange Commission.

 

Read more:

Hidden owners of companies to be revealed