On 18th of June 2021 the Cyprus Securities and Exchange Commission (“CySEC”) announce the issuance of their Directive for the prevention and suppression of money laundering and terrorist financing (beneficial ownership register of Express Trusts and Similar Legal Arrangements).
The implementation of a Register for Trusts and similar legal arrangements was introduced and required by the 5th Anti – Money Laundering Directive, along with the Register for Beneficial Owners for Companies.
Obligation to report:
The trustee bears the obligation to submit information regarding the trust and its beneficial owners. According to Prevention and Suppression of Money Laundering Activities Laws of 2017-2021 (hereinafter “the Law”) the term ‘beneficial owner’ for trusts, includes the following:
- Protectors, if any
- Beneficiaries or where the individuals benefiting from the legal arrangement or entity have yet to be determined, the class of persons in whose main interest the legal arrangement or entity is set up or operates
- Any other natural person exercising ultimate control over the trust by means of direct or indirect ownership or by other means
The trustee should provide to CySEC the following details for the beneficial owners, which are mentioned above:
- Name and Surname
- Father’s name
- Date of Birth
- Place of Birth
- Residential Address
- Number and country of passport or ID
- Date that the person became the ultimate beneficial owner
- Nature and extent of interest held directly or indirectly
- Their role
What information is submitted:
The required information to be submitted to the registration of a trust is:
- The name of the trust
- Country and date of incorporation
- Governing law
- Termination date (if any)
- Details regarding the country of residence of the trustee and their residential address
- In the event where a trustee or other equivalent person is established or resides outside the European Union and enters into a business relationship on behalf of an express trust or other similar legal arrangement in the Republic, the commencement date, the other party’s name and the agreement governing the business relationship.
- In the event where a trustee or other equivalent person is established or resides outside the European Union and acquires immovable property on behalf of an express trust or other similar legal arrangement in the Republic, the registration number and address of immovable property and the title deed.
- Any other information or supporting documents the CySEC request for identification purposes.
Who has access to this information:
CySEC may grant access to submitted information to Supervisory Authorities, the Unit, Customs and Excise Departments, Tax Department and Police without any limitation.
However, the obliged entities may have access only to the name and surname, month and year of birth, country of residence, nationality, and nature and extent of interest held directly or indirectly. The obliged entities should submit a) a statement indicating that the purpose of obtaining such information is purely for due diligence procedures and for identification of their client, b) along with a consent of the trustee.
The persons who can demonstrate a legitimate interest may submit an application duly justifiable to have access to the Trusts’ Registry. Then, CySEC shall inform the trustee within ten days where they will be able to submit their observations.
In addition, CySEC may grant access to the Trusts’ Registry to legal or 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 person.
It is worth mentioning that access to Trusts’ Registry is on the discretion of CySEC and upon payment of respective fee.
Exemption of publishment of details of beneficial owner:
On exceptional cases and upon detailed examination CySEC may exempt from the access wholly or partially to information related to beneficial owner. Such cases are when disclosure of information would expose the beneficial owner to disproportionate risk of fraud, kidnapping, blackmail, extortion, harassment violence or intimidation or when the beneficial owner is a minor or legally incompetent.
It is understood that such exemptions do not apply to credit and financial institutions nor the Supervisory Authorities, Unit, Customs and Excise Department, Tax Department and Police.
The initial obligation to submit an application for registration of a trust was within six months from the date of publication of CySEC’s Directive. However, it is expected for further extension to be given from CySEC for such submissions.