After a delay of over a year from the official transposition deadline set by the EU, on the 23rd of February 2021 L.13(I)/2021 was published on the official Gazette of the Government of Cyprus (available in Greek only), which revises the Cyprus AML Law bringing it in line with the EU’s 5th AML Directive.
The most notable changes of the revised AML Law include:
- Defines the crypto-asset activity that comes into scope and sets out the AML obligations of Providers of Services related to crypto-assets.
- Expands the universe of persons obliged to conform with the AML Law (Obliged Entities) such as art dealers and warehouses and enhances existing categories of Obliged Entities such as tax advisors and real estate agents.
- Obliged entities can now verify the identity of clients using electronic verification processes including digital IDs conforming with regulation (EU) 910/2014 (the eIDAS framework).
- Updating the beneficial ownership registry for legal entities established in Cyprus maintained by the Companies Registrar. The revised AML Law makes the registry partially accessible to the public. Moreover, the registry will be interconnected with the equivalent registries of other EU member states via a common platform.
- Creation of a list of functions that qualify as prominent public functions for the purposes of determining who is a politically exposed person (PEP).
- Increased due diligence requirements with regard to transactions with high-risk third countries.
- Creation of new electronic registry of Bank Accounts, Payment Accounts and Safe Boxes maintained by the Central Bank of Cyprus and accessible, inter-alia, by MOKAS, the Police, Inland Revenue and Customs Services of the Republic. Moreover, Cyprus Authorities may allow access to the registry to authorities from other countries.
- Creation of an Express Trust registry by CySEC. The registry will be made public via the CySEC website or through other means considered appropriate by the Commission. CySEC is empowered by the AML Law to issue directives on the definition of what is an Express Trust, as well as the operation and upkeep of the registry.
Crypto-asset service providers
As regards crypto-asset service providers, the activity brought into scope covers the following:
- Crypto-currency exchanges (crypto-to-crypto and fiat-to-crypto and vice versa)
- Custodian wallet providers
- Financial services related to crypto-assets
The Cyprus Securities and Exchange Commission is the authority assigned to regulate Providers of Services related to crypto-assets as well as to maintain a register of such providers.
It is expected that the Cyprus Securities and Exchange Commission will publish in due course, a directive that will cover the procedure for the registration of such providers and other related matters accompanied by a relevant application Form.