The Parliamentary Committee on Trade is leaning towards resolving the issue of fines for late submissions of ultimate beneficial owners by deleting the fines imposed so far and introducing a one-time fine of €250. This fine would apply uniformly to the legal entity and its directors. The government is supportive of this proposal and is considering amendments to the law to provide for "significant reductions" in the prescribed fines.

The committee continued its discussion on the relevant legislative proposal, which includes reducing the daily and maximum total financial penalties that may be imposed on individuals who refuse, neglect, or fail to fulfill their obligations to submit information about the ultimate beneficial owners of legal entities or trusts.

During the session, the Registrar of Companies, Irini Mylona Chrysostomou, mentioned that fines ranging between €13 million and €14 million have been imposed so far, while fines amounting to €600,000 have been paid.

Both Ms. Mylona and a representative from the Ministry of Finance expressed positive views on the proposal for a one-time fine of €250. They are also considering a significant reduction of fines to €10,000, to be imposed only once and not separately on each director and the company. The issue of future fines remains under discussion, with some MPs suggesting a €2,000 fine.

"We are reviewing this as part of the working group created between the Ministry of Trade, the Ministry of Finance, and the Legal Service, and we have recommended the partial cancellation of the fines and the imposition of a one-time payment of around €250," said Ms. Mylona.

Regarding future arrangements, the representative from the Ministry of Finance stated, "Our idea is to significantly reduce the fines, but the company and the directors will still be accountable for this penalty."

MPs spoke of "excessive penalties" that reach €20,000 for each company officer or administrative fine for each company, while they also mentioned compatibility issues with the system governing the submission of details. MP Kostas Kostas cited an example of a small family dairy business that was burdened with total fines of €80,000, with €20,000 for each individual.

"We need to find a solution; on one hand, we must comply, but on the other, we cannot destroy people and companies with fines," said Committee Chair Averof Neophytou.

DIKO MP Panikos Leonidou stated that the fine should be imposed only once, applying to directors, and not jointly to secretaries or separately.

A representative from the Cyprus Bar Association highlighted the timing, as updates based on the law will begin in October. He also requested a three-month grace period for the payment of the €250 fine.

In statements after the session, DISY MP Nikos Sykas said that the discussion concluded with a consensual proposal, "so that any fines imposed can be erased or a fee between €200 and €250 can be imposed, and in the future, one fine will apply to all directors and the company as a legal entity." He added, "The most important thing is that there will be relief for those burdened by this onerous fine."

EDEK MP Elias Myrianthous said that automatic penalties for ultimate beneficial owners should not be imposed, as the legislation already provides for criminal liabilities and high fines that reach €100,000.

"There are fines, criminal responsibilities, high fines, and imprisonment. We are the only country where the law is so strict that it automatically imposes a fine on company officials up to €20,000," he said.

DIPA MP Michalis Yiakoumis said he supports the legislative proposal, stating that if the fines imposed are paid, many small and medium-sized businesses will close.

"We will proceed with the legislative proposal, and when and if the government presents a specific bill, we will review it," he said.

Greens MP Stavros Papadouris spoke of "automatically imposed exorbitant fines." He noted that the proposal would move forward to the plenary, and there is agreement from the Registrar of Companies and the Ministry of Finance that companies with fines will make a one-time payment set between €200 and €250.

Final decisions on the legislative proposal will be discussed in a future session.