To this end, the cabinet approved the bill entitled “Law amending the Laws on the Prevention and Combating of Money Laundering Laws from 2007 to 2019” at its meeting on October 22.
According to the explanatory report, the purpose of the proposed bill is to amend the basic law, with the main purpose of harmonizing with the European Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018, amending the Directive (EU) 2015/849 on the prevention of the use of the financial system for money laundering or terrorist financing.
At the same time, the amending bill introduces provisions concerning the effective implementation of certain provisions of Regulation (EU) 2018/1805 of the European Parliament and of the Council of 14 November 2018 on the mutual recognition of freezing and confiscation decisions.
The amending bill also harmonizes with Article 3 of Directive (EU) 2019/2177 of the European Parliament and of the Council of 18 December 2019.
According to the bill, access to the register of final beneficiary companies, which will be kept by the Registrar of Companies and Official Receiver Department, is extended beyond the supervisory and prosecuting authorities on the basis of the provisions of European law. For legal entities, key elements for the final beneficiaries will also be accessible to the general public, upon registration and payment of a fee to be determined.
The provisions of the European Directive also provide for exceptions to access to this information by the general public when there is a significant risk of fraud, abduction, extortion, extortion, harassment, violence or intimidation of the beneficial owner or if the beneficial owner is a minor or otherwise way legally incompetent
A corresponding register of final beneficiaries of Associations, Foundations, Federations, Associations as they are defined in the Law on Associations and Foundations and for Other Related Issues, is created at the Ministry of Interior with corresponding provisions.
The competent supervisory and law enforcement authorities will have access to the register of final beneficiaries of trusts that will be kept by the Cyprus Hellenic Capital Market Commission, but also additional persons who will prove to the Hellenic Capital Market Commission that they have a legal interest.
In addition, the Central Bank of Cyprus creates a Register of bank accounts with their final beneficiaries as well as a branch for safes. MOKAS and the Police will have access to the register.
Also, the powers of MOKAS are extended, for the possibility of conducting investigations without the presence of suspicious transactions but on the basis of other information.
Also, the limits on anonymous prepaid cards are reduced, in order to minimize the risks of terrorist financing, and due diligence measures are strengthened by obligated entities when they deal with customers from high-risk countries.
Providers of crypto assets become liable entities, while their entire operation and distribution of these products are placed under the supervision of the Cyprus Securities and Exchange Commission. The purpose of this provision is transparency in this type of transaction to minimize the risk of money laundering and terrorist financing.
At the same time, provisions are introduced concerning the effective implementation of certain provisions of Regulation (EU) 2018/1805 of the European Parliament and of the Council of 14 November 2018 on the mutual recognition of seizure and confiscation decisions.
The amending bill harmonizes with Article 3 of Directive (EU) 2019/2177 of the European Parliament and of the Council of 18 December 2019. Specifically, the references to European Supervisory Authorities with the European Banking Authority are replaced in the basic law.
Also, in order to prevent money laundering and terrorist financing, the processing of personal data is considered a matter of public interest under the provisions of this law in accordance with the provisions of Regulation (EU) 2016/679 of the European Parliament and of the Council.
Finally, amendments are made to some articles, in order to better implement existing provisions of the law.
The European Commission, by letter dated 12 February 2020, sent a letter of formal notice (infringement no. 2020/2011) concerning overdue harmonization with Directive 2018/843. This delay, as noted in the Republic’s reply letter to the European Commission in June 2020, was mainly due to the plethora of international assessments to which the Republic of Cyprus had to respond in this regard, in the years 2019 and 2020 which negatively affected the ability of the Cypriot authorities to complete their work on time, while the outbreak of the COVID-19 pandemic from March 2020 onwards, was another aggravating factor.
Although to date the European Commission has not proceeded with a Reasoned opinion and infringement procedure against the Republic for the overdue harmonization with the Directive (EU) 2018/843, “we have been informed by the Legal Service of the Republic that this will happen very soon” , is highlighted.
In such a case, the Republic will have about two months (or even earlier if the European Commission decides otherwise) for the harmonization bill to be voted and enter into force. Otherwise the European Commission will have the right to file an action against the Republic in the Court of Justice of the European Union (ECJ). In such an action, the Republic will be condemned, because there is no legal defense for overdue harmonization, and the WEU may impose an economic sanction that may amount to hundreds of thousands of euros.
On 16.7.2020 the WEU issued decisions condemning two Member States for untimely harmonization with the 4th European Directive against money laundering and terrorist financing, imposing fines of millions of euros, although in the meantime the two Member States completed the harmonization work with the acquis communautaire.
The bill was prepared by an Ad Hoc committee of the Advisory Authority for Combating Money Laundering and Terrorist Financing, which was attended by representatives of the Cyprus Capital Market Commission, the MOKAS of the Central Bank of Cyprus. the Pancyprian Bar Association and the Association of Certified Public Accountants of Cyprus. At the same time, the bill was brought to the attention of the entire Advisory Authority as well as in a public consultation