Cyprus Stock Exchange Commission (CySEC), as the competent authority in Cyprus responsible for the creation and maintenance of The Register of Express Trusts and Similar Legal Arrangements (the “Trusts Registry”), has issued a directive in relation to the exact procedure of operating the Trusts Registry.
The directive was issued on 18 June 2021 with immediate effect and a period of six months for the obliged trustees to comply, however, we expect that an extension will be provided, given that CySEC has not yet activated/developed the relevant online portal through which the required information will be filed.
According to the amended AML Law, “Express Trusts” mean any trust that is expressly and voluntarily established by a trustee and does not include a by-law trust or a trust for which there is no clear intention or decision of a trustee to establish the trust or a similar legal arrangement.
The registration in the Trusts Registry applies to express trusts of which:
- The trustee is placed or resides in Cyprus
- The trustee is placed or resides outside the EU but concludes a business relationship or acquires immovable property on behalf of the express trust in Cyprus.
The registration requirement does not apply to the following express trusts that have been registered in the register of another member state and:
- The trustee is placed or resides in another member state other than Cyprus
- In the case there are more than one trustees and the one is placed or resides in Cyprus; or
- The trustee concludes various business relationships on behalf of the trust in various member states including Cyprus
The obliged Trustee must submit information regarding the trust and its UBOs which identify the following:
- Settlors
- Trustees
- Protectors; if any
- Beneficiaries of the classes of persons for the benefit of which the trust has been set up
- Any other physical person who exercises control over the trust through direct or indirect ownership or with other means
For the Trusts
- Name of Trust
- Country and date of creation and/or establishment
- 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.
For the Ultimate Beneficial Owners of the Trust (Trustee, Settlor, Protector, Beneficiaries)
- Name and Surname together with the name of their father
- Date and Place of Birth
- Nationality or Nationalities
- 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.
CySEC may grant access to the Trusts Registry:
- To the Supervisory Authority, Unit, Customs and Excise Department, Tax Department and police without any limitations.
- To obliged entities (e.g., regulated service providers, banks, real estate agents) for due diligence purposes and identification of their clients through relevant procedure to be implemented, upon payment of respective fees.
- To legal or physical persons that can demonstrate legitimate interest* in accessing the registry and providing the same through relevant procedure to be implemented, upon payment of respective fee.
- 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 or in another member state upon a written request of the said persons and payment of respective fee.
*Legitimate interest by the applicant is established in the event that the physical or legal person shows that his interest relates exclusively and contributes to the prevention of legalization of income from illegal activities and terrorist financing based on the fact and information, including facts and information for past activities and action conducted towards this decision, and is decided by CySEC on a case by case.
The information accessible to the categories (2)-(4) above are limited to:
- The name of the beneficiaries
- The month and year of birth
- The country of residency
- The nationality
- The type and extend of the rights they have in the express trust
Following an application for access to the Trusts’ Registry, CySec may:
- Approve application for disclosure or reject it;
- Specify the procedures for applying, approving or rejecting the applications, for accessing the Trusts’ Registry and procedures as to the type of information for which access will be granted.
Five years after the date of removal of a registered express trust, access to the information contained in the Trusts’ Registry is permitted only in the course of administrative or criminal enquiry conducted by the Supervisory Authority, Unit, Customs and Excise Department, Tax Department and the Police.
CySec may not grant access to information in relation to the UBOs of express trusts, in part or in whole, only in exceptional circumstances and following a detailed assessment of the exceptional nature of the facts, if:
- Such disclosure would expose the UBO to a disproportionate risk of fraud, kidnapping, blackmail, extortion, harassment violence or intimidation; or
- The UBO is a minor or legally incompetent.
The above exception does not apply in the case that application for access is made by:
- Obliged entities that are credit and financial institutions;
- By the responsible Supervisory Authority, Unit, Customs and Excise Department, Tax Department and the Police.