On 23/02/2021, the Republic of Cyprus implemented the provisions of the 5th Anti-Money Laundering EU Directive 2018/843 on its national legislation, whereby it was decided to establish central registers of ultimate beneficial owners. When it comes to the Trusts, there will be a separate register being the Register of Beneficial Owners of Express Trusts and similar legal arrangements.
The term “express trust” refers to the trusts created expressly by a settlor at their own will, and does not include trusts arising by operation of law nor trusts for which the settlor shows no clear intention for their creation.
Express trusts must be registered provided that:
- its trustee is located or residing in the Republic of Cyprus; or
- its trustee, which is located or residing outside EU, establishes a business relationship or acquires immovable property on behalf of the express trust in the Republic.
Pursuant to the provisions of the 5th AML Directive and amendment of the national law with respect to the establishment of the Trusts UBO Registry, Cyprus Securities & Exchange Commission (CySec) will undertake to create and manage the Cyprus Trusts Beneficial Owners Registry (CyTBOR).
On 18/06/2021, CySec pursuant to Article 61C of the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2021 (AML Law) issued a regulation (Regulatory Administrative Act 257/2021) (the Directive) identifying the procedure of registration with CyTBOR. The information/data required for the CyTBOR will be different from the existing registries maintained by the three current supervisors (CySec, Cyprus Bar Association, Institute of Certified Public Accountants).
All new trusts will be registered with the CyTBOR, which is expected to become operational by the end of 2021 and any existing trusts that are registered under CySec, Cyprus Bar Association and Institute of Certified Public Accountants will need to be transferred to the new CyTBOR. It will be the responsibility of the Trustees of each Trust that is already registered with one of the current supervisory authorities to arrange the registration with the CyTBOR as soon as it becomes operational, according to the provisions of Article 61C of the AML Law.
Cysec will have full access to the data and information submitted and maintained in the CyTBOR.
According to the Directive of CySec, access to the CyTBOR is granted:
- To a trustee of an express trust or other person having an equivalent position to other similar legal arrangement or
- To the following persons as per Article 61C (a-d) of the AML Law:
- The responsible Supervisory Authority as defined by Section 59 of the AML Law, Unit, Customs and Excise Department, Tax Department and Police without any limitations
- To obliged entities for due diligence purposes and identification of their clients upon payment of respective fee
- To legal or physical persons that can demonstrate legitimate interest in accessing the CyTBOR and proving the same through relevant procedure to be implemented, upon payment of respective fee.
- To legal and physical persons in relation to a trust which holds or owns a controlling interest in a company that is not incorporated in Cyprus upon the written request of the said persons and payment of the respective fee.
Further clarifications with respect to the above persons/entities that can have access to the CyTBOR is provided below:
Obliged entities: As defined by Section 2A of the AML law, means
- Credit institutions
- Financial institutions
- Natural or legal persons acting in the exercise of their professional activities which among others include auditors, external accountants and tax advisors, notaries and other independent legal professionals and company service providers.
The obliged entities will have access to the following information in relation to the Beneficial owners of an express trust or similar legal arrangement:
- Name and surname,
- month and year of birth,
- country of residence,
- nature and extent of the beneficial interests held directly or indirectly by each beneficial owner.
The framework regarding accessing the information on the beneficial ownership of a trust on the basis of a ‘legitimate interest’, is provided in section 61C (12)(c) of the AML/CFT Law and paragraph 13 of the Directive. CySEC will decide ‘legitimate interest’ on a case by case basis taking into account what is provided in section 61C (12)(c) of the AML/CFT Law and paragraph 13 of the Directive, and more specifically that, the person requesting access to the information, has satisfactory demonstrated, with supporting evidence and information, that his interest is specifically related to and contributes to the combating of money laundering and the financing of terrorism, including such evidence and information from previous actions and activities taken to that direction. Note that all CySEC decisions are, in every case, fully justified
The following information needs to be registered in CyTBOR with respect to the Trusts:
- Name of Trust
- Country and date of creation
- Termination Date (if applicable)
- Country to which the Trustee is located or residing and their Residential Address
- Date of commencement of the business relationship, the name of the person with whom such relationship is established together with the document which governs the relationship (Applicable only in cases where the Trustee resides outsides EU and establishes a business relationship on behalf of the Trust in the Republic)
- Registration Number and Address of the Immovable Property together with the Title Deed of the property (Applicable only in cases where the Trustee resides outsides EU and acquires immovable property on behalf of the express trust in the Republic)
- Any other information and/or supporting documentation requested by CySEC for identification purposes.
The following information needs to be registered in CyTBOR for the Ultimate Beneficial Owners of the Trust as well as the Trustee, Settlor, Protector:
- Name and Surname and father’s name
- Date and Place of Birth
- Residential Address
- Number, Type and Country of issuance of identification document
- Date of Death (where applicable)
- Date on which the UBO became beneficial owner
- The nature and extent of the rights which are directly or indirectly held by the beneficial owner
- The role of the Beneficial Owner in the trust
- Any other information and/or supporting documentation requested by CySEC for identification purposes
- In case the Trust has class of beneficiaries, CySEC requests a description of classes and the members of each class and also the nature and extent of the rights each class of beneficiaries has.