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Antonis Michaelides |
The Law Regulating Companies Providing Administrative Services and Related Matters, Law 196(I)/2012 (the Fiduciaries Law) was enacted in December 2012 establishing a licensing and supervisory body for corporate and fiduciary services providers as per Directive 2005/ 60/EC of the EU. Pursuant to Cyprus's commitment to transparency and enhanced regulations, on September 9 2013 Law 109(I)/2013 amended the Fiduciaries Law in respect to the disclosure of information on Cypriot international trusts.
More precisely, Section 3(7) of the Fiduciaries Law (as amended) provides that trustees and service providers will need to identify and verify to their respective supervisory body (that is Cyprus Bar Association, Cyprus Securities and Exchange Commission and the Institute of Certified Public Accountants of Cyprus) the name of the trusts, the trustees' names at all times, the date of creation and termination of trusts and the date of any change in the law governing the trusts.
The timeframe for disclosing the above information to the competent authority for trusts established on or after September 9 2013 is 15 days from their establishment or the adoption of Cyprus law as the governing law of the trust. As for trusts already in existence on September 9 2013, the relevant information must be submitted within six months of the entry into force of the amending law, that is to say, before March 9 2014. A notification on any subsequent changes in any of the information mentioned above must be also submitted within 15 days from the date the change took place.
Failure to do so within the above timeframes constitutes a criminal offence that entails a sentence of imprisonment for up to five years, a fine of up to €350,000 ($483,000) or both.
It should be highlighted that the trust register maintained by the competent authority is not available to the public but may only be available for inspection by other competent authorities if requested. The authorities are exploring the adoption of an electronic submission system so as to expedite the process.
This development is certainly a serious step towards Cyprus's commitment to keep up with the global developments in regards to anti-money laundering compliance and enhanced transparency in an era when strict confidentiality is increasingly combated. However, Cypriot trustees and service providers must be henceforth very careful in complying with the above requirements within the provided deadlines so as to operate within the requirements of the law and of course avoid any potential fines/liability.
Antonis Michaelides (antonis.michaelides@eurofast.eu)
Eurofast, Cyprus Office
Tel: +357 22 699 222
Website: www.eurofast.eu
