The Prevention and Suppression of Money Laundering and Terrorist Financing (Amended) Law of 2021
On 23rd of February 2021 has been published in the Official Gazette of the Republic the amendment of The Prevention and Suppression of Money Laundering and Terrorist Financing Law 188 (I) 2017 which implements the EU Directive 2018/843 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (the "5th AML EU Directive").
The main most important changes of the amending law are the following:
1 Crypto- asset activity comes into force and be defined along with the definition of crypto – asset and Services providers related to crypto-assets.
"Crypto Assets" means a digital representation of value, that is neither issued nor guaranteed by a central bank or public authority, is not necessarily connected with a legally established currency and does not have the legal status of currency or money, but is accepted by persons as a means of transaction or investment, may be transferred, stored or traded electronically and is not: (i) fiat currency, or (ii) electronic money, or; (iii) financial instruments as defined in n Part III of the First Appendix of the Law on the Provision of Investment Services and Activities and Regulated Markets.
Services provider related to crypto-assets means a person who provides or carries out one or more of the following services or activities to another person or on behalf of another person, which do not fall within the services or activities of the liable entities referred to in Article 2A of the Law: (i) Exchange between cryptocurrencies and documentary currencies; (ii) exchange between crypto assets; (iii) management, transfer, transfer, holding, and / or safekeeping, including custody, of cryptocurrencies or cryptographic keys or means enabling control of crypto-assets; (iv) offering and / or selling cryptocurrencies, including the initial public offering; and (v) participation and / or provision of financial services related to the distribution, offering and / or sale of crypto-assets, including the initial offer;
2 Sets out the AML obligations of Providers of Services related to crypto - assets.
3 Entitles CySEC to create and maintain a Providers of Services related to crypto – assets registry. The registry will be available to public through CySEC’s website or through other means considered appropriate by CySEC. CySec is entitled to issue directives on the operation, management, maintenance and updating of the registry.
4 Expands the circle of people who are obliged to conform with the AML Law and now includes art dealers and warehouses and enchased existing categories of Obliged persons such as real estate agents, tax advisors, external auditors etc.
5 Entitles the Obliged Entities to verify the identity of clients using electronic verification processes, including if applicable, digital IDs as defined in Regulation 910/214.
6 Updates the Beneficial owners Registry for legal entities registered in Cyprus which is maintained by the Companies Registrar. The registry becomes partially accessible to public as it can access specific information without establish legal interest. The registry will be interconnected with equivalent registries of EU member states via a common platform.
7 Creates an Express Trust registry which will be under the supervision of Cyprus Securities and Exchange Commission. The registry will be available to public through CySEC’s website or through other means considered appropriate by CySEC Cysec. CySec is entitled to issue directives on the definition of what constitute an express trust and the operation, management, maintenance and updating of the registry.
8 Creates new electronic registry which is maintained by the Central Bank of Cyprus in regards with Bank Accounts, Payment Accounts and Safe Boxes. The registry will be accessible inter alia by MOKAS, the Police, Inland Revenue and Customs Services of the Republic. Cyprus Authorities may allow access to the registry to authorities from other countries.
9 Increases the due diligence requirements in regards with the transactions with high risk third countries
10 Provides for the creation of an updated list specifying the exact tasks which are considered an important public function for the purposes of defining the term "politically exposed person".