Elias Neocleous & Co LLC

Limassol

Elias Neocleous & Co LLC, the successor fim to Andreas Neocleous & Co LLC, is one of the largest and most respected law firms in south-east Europe and the Middle East. Its head office is in Limassol, which is the commercial centre of Cyprus and the home of many international companies. It aims to build on the success of its legacy firm, and achieve even higher standards of excellence through an even greater emphasis on innovation and new ways of doing business. The human and intellectual capital, the accumulated experience, and the core values of the legacy firm will remain intact.

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Updates

Corporate Tax

Tax treatment of non-returnable capital contributions
Cyprus | 28 September 2018

The Tax Department recently issued Interpretative Circular 25, which clarifies the tax treatment of non-returnable capital contributions by Cyprus taxpayers to companies that are tax resident abroad. The circular confirms that Article 33 of the Income Tax Law will not apply to debit or credit balances generated by non-repayable capital contributions to non-tax resident companies, provided that a number of conditions are satisfied with full documentary evidence.

Taxation of insurance agent earnings
Cyprus | 21 September 2018

The Tax Department recently issued a circular clarifying the taxation of insurance agent earnings. A representative of an insurer who is not in an employment relationship with that insurer will be treated as a commercial enterprise whose revenue is derived from fees or commissions for the conclusion of insurance contracts. If their annual revenue exceeds €70,000, the intermediary must maintain accounting records and prepare audited financial statements.

Tax exemptions for loan restructuring implemented
Cyprus | 17 August 2018

Following the extension of tax relief for the disposal of immovable property for the restructuring non-performing loans introduced by Laws 96(I)/2018, 98(I)/2018, 99(I)/2018 and 100(I)/2018, the Tax Department has announced that its Form 415 (Disposal of Property due to Loan Restructuring) has been revised and that a new Form 415B (Immovable Property Declaration due to Loan Restructuring – Supplementary Certificate) has been published.

Amendments to tax laws to facilitate loan restructuring
Cyprus | 10 August 2018

Parliament recently passed a package of legislative measures that aims to encourage the resolution of non-performing loans. The measures include an extension of the current tax exemptions on transfers of immovable property from a borrower to a lender in the course of a loan restructuring to borrowers that dispose of the property themselves in the open market in order to restructure debt. Both sets of exemptions will be available until the end of 2019.

Clampdown on companies lacking substance
Cyprus | 03 August 2018

Recent developments have underlined the need for businesses to have real substance in order to operate and benefit from tax residence in Cyprus. Lack of proper substance may not only lead to the denial of benefits under double tax agreements or EU directives, but may also mean that the company is unable to operate a bank account in Cyprus.

Submission period for applications to settle tax arrears by instalments extended
Cyprus | 13 July 2018

The Process of Adjustment of Tax Arrears Law established a procedure for settling tax arrears by monthly instalments. Although the deadline for submitting applications was due to expire on 3 July 2018, it has been extended for a further six months. Applications for inclusion in the scheme must now be made no later than 3 January 2019 and applicants must submit any pending tax returns no later than 31 December 2018.

Tax Department aims to streamline payment of tax liabilities
Cyprus | 06 July 2018

One of the Tax Department's main priorities is to streamline and modernise its processes and make it more convenient for taxpayers to deal with the department by facilitating the electronic submission of tax returns and payments, thus removing the need to visit a tax office. The electronic submission of income tax and value added tax returns is now mandatory and the department is undertaking a large-scale public information programme to help taxpayers make the change.

New double tax agreement between Cyprus and Andorra
Cyprus | 29 June 2018

Cyprus and Andorra have recently signed a double tax agreement, which is closely based on the latest Organisation for Economic Cooperation and Development Model Convention. The agreement includes a preamble which makes clear that it is not designed to create opportunities for double non-taxation or reduced taxation through evasion or avoidance, as well as a principal purpose test-based general anti-avoidance rule.

New Cyprus-Luxembourg double tax agreement enters into force
Cyprus | 22 June 2018

The double tax agreement between Cyprus and Luxembourg recently entered into force. It will apply to income arising from 1 January 2019 with regard to taxes deducted at source and for tax years beginning on or after that date for other taxes. The agreement includes a preamble which makes clear that it is not designed to create opportunities for double non-taxation or reduced taxation through evasion or avoidance and a principal purpose test-based general anti-avoidance rule.

Domestic law aligned with EU directive on mandatory automatic exchange of tax information
Cyprus | 11 May 2018

The recently introduced Law 33(I)/2018 amends the Law regarding Administrative Cooperation in the Field of Taxation 2012 to 2017 in order to align domestic law with EU Directive 2016/881/EU, which amended EU Directive 2011/16/EU on administrative cooperation in the field of taxation. The new law requires ultimate parent entities of multinational enterprises resident in Cyprus for tax purposes to file country-by-country reports within 12 months of the end of each fiscal year.

New Cyprus-UK double tax agreement
Cyprus | 06 April 2018

Cyprus and the United Kingdom recently signed a new double tax agreement. Once it has been ratified by both parties, it will replace the current agreement, which dates back to 1974 and is one of the oldest tax agreements still in force in Cyprus. The changes introduced will have little direct effect on the tax liability of most taxpayers, but the modernisation of the agreement will provide clarity.

Tax Department circular clarifies VAT treatment of dividends
Cyprus | 30 March 2018

Cyprus holding companies are widely used in the context of international business structuring to optimise the channelling of inbound and outbound investments with countries that have signed a double tax treaty with Cyprus. The Tax Department recently issued a circular on the value added tax treatment of holding companies, which aims to provide clarity regarding the circumstances in which Cyprus holding companies can be deemed to be earning income that may constitute taxable income.

Final date for submission of corporate tax returns for 2016
Cyprus | 23 March 2018

​The Tax Department recently announced that companies and self-employed individuals that are required to submit annual accounts will be given an additional three months to file their tax returns for the year ended December 31 2016. The department has also issued a circular clarifying the requirement to produce audited financial statements to support tax returns.

Reference rates for notional interest deduction for 2018
Cyprus | 02 March 2018

Article 9(B) of the Income Tax Law 2002 (as amended) provides for a notional interest deduction for tax purposes on new equity capital injected into companies and permanent establishments of foreign companies on or after January 1 2015 to finance business assets, calculated by applying a reference rate to the new equity. The Tax Department recently announced the 10-year government bond yields for December 31 2017, which will be used as the basis for the notional interest deduction for the 2018 tax year.

Further extension for applications to settle tax arrears by instalments
Cyprus | 26 January 2018

The Process of Adjustment of Tax Arrears Law 2017 establishes a procedure for settling tax arrears by monthly instalments and provides a waiver of interest and penalties of up to 95% for all nationally imposed taxes. Although the law was enacted in February 2017, it did not take effect immediately in order to allow time for the necessary payment systems to be implemented. The deadline for submitting applications to participate in the scheme was originally set at three months, but was recently extended.

New double tax agreement between Cyprus and Saudi Arabia
Cyprus | 19 January 2018

Cyprus and Saudi Arabia recently signed an agreement for the avoidance of double taxation with respect to taxes on income and the prevention of tax evasion. The agreement provides for the exchange of financial and other information in accordance with the relevant article of the Organisation for Economic Cooperation and Development Model Convention for the Avoidance of Double Taxation on Income and on Capital. It will take effect once formal ratification procedures have been completed.

Taxation of deemed benefits on loans and advances to directors and shareholders
Cyprus | 12 January 2018

The Tax Department recently issued Interpretative Circular 14, which has clarified the application of the Income Tax Law regarding a deemed benefit which is to be assessed on any drawings, loan or other financial facilities granted by a company to a non-resident director or shareholder or their spouse or close relatives. The circular clarifies that the deemed benefit is taxable in full, regardless of the period of residence of the individual in question.

Treatment of additional taxes for deemed distribution purposes
Cyprus | 05 January 2018

The Cyprus Tax Department recently clarified the treatment of additional taxes imposed under the Assessment and Collection of Taxes Law. The department has specified that any additional tax is to be treated as such, meaning that penalties and interest will be imposed if they are not paid on time. The taxes are included under the term 'corporation tax' and are deductible from accounting profits for the purpose of calculating the deemed distribution for special defence contribution tax.

Extension of country-by-country reporting deadlines
Cyprus | 22 December 2017

The Tax Department recently extended the deadline for the submission of country-by-country reports to be filed by the end of 2017. The deadline for reporting entities to submit country-by-country reports for multinational groups for the fiscal year ending December 31 2016 has been extended by two months, while the deadline for Cyprus-resident constituent entities to file their notifications for the fiscal year ending December 31 2017 has been extended to January 15 2018.

Further reminder of instalment scheme for tax arrears
Cyprus | 15 December 2017

With the extended deadline for the submission of applications for inclusion in the deferred settlement scheme for tax arrears established by Law 4(I)/2017 now less than one month away, the Tax Department has issued a further reminder of the scheme's main features. For example, all tax returns due must have been submitted and all tax liabilities for periods after December 31 2015 must have been settled or be in the process of being settled in accordance with an agreed payment schedule.

Extension of accelerated writing-down allowances for tax purposes
Cyprus | 08 December 2017

The Income Tax Law was amended in 2012 to introduce accelerated capital allowances for tax purposes on assets purchased between 2012 and 2014, inclusive. For plant and machinery acquired up to the end of 2018, the annual writing-down allowance rate will be 20% or any higher rate applying to the category of assets concerned. For industrial buildings and hotels acquired up to the end of 2018, the annual writing-down allowance will be 7%.

Public consultation on proposed legislation to implement EU Anti-tax Avoidance Directive
Cyprus | 24 November 2017

The Tax Department recently opened a public consultation on proposed legislation to implement the EU Anti-tax Avoidance Directive, which extends the rules to hybrid mismatches. The consultation period will last until December 8 2017. The consultation documents, which are in Greek, are available on the Tax Department's website.

Settlement of overdue tax liabilities under Process of Adjustment of Tax Arrears Law
Cyprus | 10 November 2017

The Process of Adjustment of Tax Arrears Law 2017 established a procedure for settling tax arrears by monthly instalments, providing a waiver of up to 95% of interest and penalties and covering all nationally imposed taxes. The Tax Department recently issued an announcement informing taxpayers who have applied to participate in the scheme that strict compliance with the agreed terms is essential. In particular, payments must be made on or before the due date or penalties will be applied.

Extension of tax exemptions for loan restructuring
Cyprus | 20 October 2017

In December 2015 Cyprus's tax laws were amended to provide a temporary tax exemption for loan restructurings in order to facilitate and encourage the restructuring of non-performing loans. The exemptions introduced in 2015 were intended to be valid for two years from the date on which the various amending laws entered into force and were therefore set to expire on December 31 2017. However, a number of new laws recently extended the exemptions for a further two years.

Process of Adjustment of Tax Arrears Law amended
Cyprus | 13 October 2017

The Process of Adjustment of Tax Arrears Law 2017 established a procedure for settling tax arrears by monthly instalments and provided a waiver of interest and penalties of up to 95% for all nationally imposed taxes. The law was recently amended by Law 129(I)/2017, which has extended the deadline for submitting applications from three months after the law took effect to six months.

Reference rates for notional interest deduction for Greece, Italy and Kazakhstan
Cyprus | 06 October 2017

The Income Tax Law provides for a notional interest deduction for tax purposes on new equity capital injected into companies and permanent establishments of foreign companies on or after January 1 2015 to finance business assets, calculated by applying a reference rate to the new equity. The Tax Department recently announced the bond yields for Greece, Italy and Kazakhstan which will be used to calculate the notional interest deduction for the 2016 and 2017 tax years.

Changes to Assessment and Collection of Taxes Law
Cyprus | 22 September 2017

Law 97(I)/2017 has amended the Assessment and Collection of Taxes (ACT) Law 1978. One of the principal changes introduced by the amending law is that the six-year limitation on raising assessments provided for in Articles 21 and 23 of the ACT Law does not apply if the assessment is issued following a court decision. In addition, an administrative fine of up to €20,000 may be imposed for a breach of the ACT Law.

Reporting of advance cross-border rulings
Cyprus | 11 August 2017

In order to ensure compliance with the EU directives on the compulsory automatic exchange of information in the field of taxation – in particular, in advance cross-border rulings – the Cyprus Tax Department recently launched an initiative to gather information regarding cross-border decisions issued, modified or renewed between 2012 and 2016 (inclusive).

New law for payment of tax arrears by instalments comes into effect
Cyprus | 21 July 2017

The Process of Adjustment of Tax Arrears Law 2017 establishes a procedure for settling tax arrears by monthly instalments. The law covers all taxes assessed by the Tax Department for tax years up to and including 2015, as well as all amounts payable as a result of the submission of a self-assessment in respect of those tax years in which the tax returns for the relevant tax year have already been submitted but no tax payment has been made.

New ministerial order on country-by-country reporting
Cyprus | 14 July 2017

The minister of finance recently issued a revised ministerial order on country-by-country reporting under the Assessment and Collection of Taxes Law. The order sets out the reporting framework and requirements regarding notification, country-by-country reporting, secondary reporting, the exchange of information and accounting records.

Cyprus formally signs multilateral instrument on base erosion and profit shifting
Cyprus | 07 July 2017

Cyprus was among the first 68 jurisdictions to formally sign the Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent Base Erosion and Profit Shifting. In order to qualify for the benefits of Cyprus's covered double tax treaties once the multilateral instrument is fully implemented, companies must demonstrate real economic substance in Cyprus.

Details of Cyprus-Luxembourg double tax agreement released
Cyprus | 30 June 2017

Details of the double tax agreement between Cyprus and Luxembourg were recently published by the Luxembourg authorities. The agreement closely follows the latest Organisation for Economic Cooperation and Development (OECD) Model Tax Convention for the Avoidance of Double Taxation on Income and on Capital and the OECD Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent Base Erosion and Profit Shifting.

Payment of 2016 income and corporate income tax
Cyprus | 23 June 2017

​The Tax Department recently issued a reminder to taxpayers regarding the payment of any remaining income tax and corporate income tax due for 2016. Under Cyprus's self-assessment scheme taxpayers must pay the estimated tax for any year in two equal instalments during the year of assessment and pay any outstanding balance in the following year.

New double tax agreement between Cyprus and Luxembourg
Cyprus | 16 June 2017

The new double tax agreement between Cyprus and Luxembourg was recently published on the Luxembourg tax administration's website. Under the agreement, the withholding tax on dividends is zero if the beneficial owner is a company that holds at least 10% of the share capital of the company paying the dividend, and is limited to 5% in other cases. In any event, Cyprus imposes no withholding tax on dividends paid to shareholders overseas.

Double tax agreements: new agreement signed and existing agreement amended
Cyprus | 26 May 2017

The finance ministers of Cyprus and Luxembourg recently signed the first double tax agreement between the two countries. The agreement incorporates all of the required international standards regarding information exchange. Further, a protocol amending the double tax agreement between Cyprus and San Marino was recently signed. Details of the amendments, which will take effect only when the protocol has been ratified by both countries, have yet to be released.

Overview of Cyprus-Barbados double tax agreement
Cyprus | 19 May 2017

The new double tax agreement between Cyprus and Barbados was recently published in the Official Gazette. The agreement will enter into force once each country has notified the other that its domestic ratification procedures have been completed and will have effect from the following January 1. The agreement closely follows the 2014 version of the Organisation for Economic Cooperation and Development Model Tax Convention.

Cyprus and Barbados sign double tax agreement
Cyprus | 12 May 2017

After several years of negotiations, Cyprus and Barbados recently signed an agreement for the avoidance of double taxation. The agreement's text has not yet been published, but according to the Ministry of Finance, it follows the Organisation for Economic Cooperation and Development Model Tax Convention. The agreement will take effect after formal ratification procedures have been completed in both countries.

Double tax agreement between Cyprus and Iran enters into force
Cyprus | 28 April 2017

The double tax agreement between Cyprus and Iran recently entered into force following completion of all of the requisite ratification procedures. Given Cyprus's geographical proximity to Iran, the Cyprus government hopes that the double tax agreement will help to establish Cyprus as the principal portal for investment between Iran and the European Union.

Double tax agreement between Cyprus and Jersey enters into force
Cyprus | 21 April 2017

The double tax agreement between Cyprus and Jersey recently entered into force following completion of all the requisite ratification procedures. It will take effect with regard to taxes withheld at source in respect of amounts paid or credited on or after January 1 2018 and for other taxes in respect of tax years beginning on or after that date. The new agreement applies to taxes on income and gains from alienation of movable or immovable property.

Reduced withholding tax under Cyprus-Russia double tax agreement
Cyprus | 07 April 2017

Claims for the reduced rate of withholding tax on dividends have been the most common area of dispute under the Cyprus-Russia double tax agreement. Under the agreement, a reduced rate of withholding tax applies to dividends paid by a company resident in one contracting state if the dividends' beneficial owner is a resident of the other contracting state and has directly invested the equivalent of at least €100,000 in the company paying the dividends.

New law for payment of tax arrears by instalments
Cyprus | 24 March 2017

The Process of Adjustment of Tax Arrears Law 2017 was recently published in the Official Gazette. It will take effect on a future date to be determined by the commissioner of taxation and establishes a procedure for settling tax arrears which arise before that date by monthly instalments. The new law does not affect existing arrangements for tax debts to be repaid by instalments, apart from giving the debtor the right to apply to have the balance of the debt dealt with under the new law.

Reference rates for notional interest deduction for 2017
Cyprus | 10 March 2017

Article 9(B) of the Income Tax Law 2002 (as amended) provides for a notional interest deduction for tax purposes on new equity capital injected into companies and permanent establishments of foreign companies on or after January 1 2015 to finance business assets, calculated by applying a reference rate to the new equity. The Tax Department recently announced the 10-year government bond yields for December 31 2016, which will be used as the basis for the notional interest deduction for 2017.

Cyprus-Russia double tax agreement – importance of proper structuring
Cyprus | 03 March 2017

Proper structuring is important to ensure that the Cyprus-Russia double tax agreement's strict requirements are observed. This was illustrated by the denial of the preferential 5% rate on dividends paid by Severstal PJSC to its four Cyprus-resident shareholders. The Russian tax authorities successfully argued that the Cyprus-resident companies, which were owned by BVI-resident companies, were conduit companies established with the main objective of ensuring a favourable tax regime.

Exchange of information with Austria
Cyprus | 24 February 2017

The Tax Department recently issued guidance relating to the exchange of information with Austria under the EU Directive on the Mandatory Exchange of Information (2014/107/EC). As of January 1 2016, Cyprus must provide information on payments that fall within the scope of the directive made to Austrian residents in the same way that it does for payments made to residents of other EU member states.

New law on payment of tax arrears approved
Cyprus | 17 February 2017

Parliament recently approved a new law which provides for the payment of overdue taxes by monthly instalments. The scheme covers a wide range of taxes, the most relevant of which for companies are income tax, value added tax, special defence contributions, immovable property tax, capital gains tax, stamp duties and special contributions for employees. The new law also gives the tax commissioner discretion to grant discounts on interest and penalties on a case-by-case basis.

Cyprus implements country-by-country reporting
Cyprus | 10 February 2017

After approval by the Council of Ministers at its September 28 2016 meeting, Cyprus signed the Organisation for Economic Cooperation and Development's Multilateral Competent Authority Agreement for the Automatic Exchange of Country-by-Country Reports on November 1 2016. Following publication in the Official Gazette on December 30 2016, the agreement is now binding on Cyprus in accordance with Article 169.3 of the Constitution.

Deferral of source-based taxation of gains on disposal of shares in property-rich companies
Cyprus | 03 February 2017

The Ministry of Finance recently announced that the Russian government has agreed to defer the introduction of source-based taxation of capital gains on disposals of shares in so-called 'property-rich' Russian companies, which was due to take place on January 1 2017. Disposals of shares in property-rich companies will continue to be taxable only in the country of residence of the person disposing of the shares, in the same way as other shares.

New tax relief for investors in small and medium-sized innovative enterprises
Cyprus | 27 January 2017

The Income Tax (Amendment) (No 2) Law 2016 introduces new tax relief for investors in qualifying small and medium-sized innovative enterprises. The amendment law adds a new Section 9A to the Income Tax Law 2002, allowing independent investors in such enterprises to deduct the cost of the investment from their taxable income for the year in which the investment was made. The deduction is limited to 50% of the investor's taxable income for the year or €150,000, whichever is less.

Application of Article 33 of Income Tax Law
Cyprus | 13 January 2017

The Tax Department recently clarified the application of Article 33 of the Income Tax Law 2002 following the amendments made by Law 187(I)/2015. Article 33 allows the tax authorities to adjust transactions between related parties on terms which, in the opinion of the authorities, deviate from those which would apply in similar transactions between independent enterprises on an arm's-length basis.

Revised double tax agreement between Cyprus and India published
Cyprus | 06 January 2017

The revised double tax agreement between Cyprus and India marks a significant milestone in the restoration of tax relations between the two countries and provides new opportunities for trade and investment. The new agreement closely follows the 2010 Organisation for Economic Cooperation and Development Model Tax Convention, with only minor modifications, and the protocol to the agreement clarifies a number of provisions.

Taxation of betting companies
Cyprus | 16 December 2016

The Tax Department recently issued Circular 2016/14, which clarifies the taxation arrangements for companies that provide betting services under a licence issued by the National Betting Authority in accordance with the Gambling Law 2012. The circular clarifies that, despite the tax exemption, Article 5A of the Assessment and Collection of Taxes Law 1978, as amended, continues to apply to such companies.

Amendment to tax law serves to clarify rather than change
Cyprus | 09 December 2016

A recent amendment to the Capital Gains Tax Law was implemented with immediate effect in order to clarify and confirm existing practice. Although the amendment made no substantial changes to the law, it has amended Articles 6, 9 and 10 regarding allowable deductions, disposal proceeds and certain transactions, respectively.

Revised double tax agreement between Cyprus and India signed
Cyprus | 02 December 2016

The revised double tax agreement between Cyprus and India was recently signed in Nicosia. As was widely expected following similar changes to India's double tax agreements with Mauritius and Singapore, the agreement provides for source-based taxation of gains from the alienation of shares. However, investments undertaken before April 1 2017 are grandfathered, with taxation rights over gains on the disposal of these shares at any future date remaining solely with the seller's state of residence.

Changes in tax regime for directors and other officers
Cyprus | 25 November 2016

The Tax Department recently issued a circular explaining changes to value added tax (VAT) for persons who are appointed as directors or other officers of companies. Where a lawyer, accountant or other professional is appointed as a company director, treasurer or secretary and continues to practise his or her profession or participate in any other economic activity, such services constitute an economic activity which is subject to VAT. However, the circular provides for a number of exceptions.

Exemption from tax on interest derived from qualifying international shipping activities
Cyprus | 11 November 2016

The Tax Department recently issued a circular clarifying the exemption from tax on interest received by owners, charterers or managers of ships that opt to be taxed under the Merchant Shipping (Fees and Taxing Provisions) Law of 2010. According to the circular, the tonnage tax law exempts from all taxes interest received by or credited to eligible owners, charterers and managers of ships in qualifying bank accounts.

Changes to IP box scheme proposed
Cyprus | 04 November 2016

Parliament recently amended the Income Tax Law to bring its provisions on the taxation of income from the use or sale of intangible assets into line with the 'modified nexus' approach. While the assets and categories of expenditure that qualify for relief are now more restricted, Cyprus's IP box still represents an attractive option for taxpayers, with an effective tax rate of less than 2.5% on qualifying income.

Notional interest deduction rates for new capital used to finance assets in Russia revised
Cyprus | 07 October 2016

The Tax Department recently revised the reference rates used to calculate the notional interest deduction under Article 9B of the Income Tax Law for new capital used to finance assets employed in Russia. In a revised announcement published on the department's website, the reference rates for Russian government 10-year bonds for capital introduced in 2015 and 2016 were reduced to 6.58% and 6.60%, respectively.

Practical guidance on calculating notional interest deduction
Cyprus | 16 September 2016

The Tax Department has issued guidance on the application of the provisions introduced in 2015 for a notional interest deduction. The guidance sets out the legal basis for the notional interest deduction and explains the underlying concepts, definitions and basic principles of calculating the deduction and its application in practice.

Further progress on ratification of new Cyprus-India double tax agreement
Cyprus | 09 September 2016

A further step towards implementation of the renegotiated double tax avoidance agreement between Cyprus and India has taken place with the announcement that the Indian Cabinet has approved the document. As was widely expected, the revised agreement provides for source-based taxation of gains from the alienation of shares.

Details of double tax agreement between Cyprus and Jersey
Cyprus | 26 August 2016

Cyprus and Jersey recently signed their first comprehensive double tax agreement, which closely follows the 2010 Organisation for Economic Cooperation and Development Model Tax Convention. As Jersey is an important financial centre and the double tax agreement will be a valuable addition to Cyprus's extensive treaty network, it is hoped that the remaining steps required to bring it into effect can be completed quickly.

Cyprus and Latvia sign double tax agreement
Cyprus | 12 August 2016

Cyprus and Latvia recently signed a double tax agreement which includes provisions regarding permanent establishment, dividends, interest and royalties, capital gains, offshore activities, the elimination of double taxation and the exchange of information. The agreement will enter into force once each country has notified the other through diplomatic channels that the relevant constitutional procedures have been completed.

Signature of double tax agreement between Cyprus and Jersey
Cyprus | 05 August 2016

Cyprus has further extended its network of double tax agreements by signing a new agreement with Jersey. As a crown dependency of the United Kingdom, Jersey is an important financial centre with financial services accounting for one-quarter of all jobs and two-fifths of the country's economic activity. The agreement is expected to enhance Cyprus's trade and economic ties with Jersey, as well as with other countries.

Negotiations to amend Cyprus-India double tax agreement concluded
Cyprus | 22 July 2016

The Ministry of Finance recently announced that the negotiations on the double tax agreement between Cyprus and India have been concluded. The agreement provides for source-based taxation of gains from the alienation of shares. However, investments undertaken before April 1 2017 are grandfathered, with taxation rights over gains on the disposal of these shares at any future date remaining solely with the state of residence of the seller.

Cyprus-India double tax agreement concluded in principle
Cyprus | 24 June 2016

According to reports in the Indian media, the Cyprus Foreign Ministry has confirmed that the Cyprus authorities have informed their Indian counterparts that they are ready to finalise the new double tax agreement between the two countries, having accepted in principle the Indian government's proposed changes regarding the taxation of capital gains.

Double tax agreement between Cyprus and Bahrain enters into force
Cyprus | 17 June 2016

The Tax Department has announced that the double tax agreement with Bahrain, which was signed in 2015, recently entered into force following the completion of ratification procedures in both countries. Its provisions will have effect for the tax years beginning on or after January 1 2017 and for taxes withheld at source on or after that date.

Additional rates for calculating notional interest deduction for new equity capital announced
Cyprus | 10 June 2016

The Tax Department recently announced government bond rates at December 31 2015 for the Czech Republic, Latvia, Poland and the United Arab Emirates, on which the notional interest deduction on capital introduced in 2016 will be based. The notional interest deduction for capital introduced during 2015 to finance assets used in any of these countries or in Ukraine will be based on the rate for Cyprus.

Fees for issuance of advance tax rulings
Cyprus | 03 June 2016

In October 2015 the Tax Department introduced a new formal procedure for obtaining advance tax rulings. The government recently issued a statutory order under Article 44 of the Income Tax Law setting the fee for obtaining advance rulings at €1,000. The taxpayer may request an expedited ruling, guaranteeing a response in 21 working days, provided that all the necessary information is supplied. In this case the fee is €2,000.

Ministry of Finance announces commitment to country-by-country reporting
Cyprus | 27 May 2016

The Ministry of Finance recently announced that it intends to make the amendments required to domestic law to introduce country-by-country reporting in line with the draft EU directive amending the directive on administrative cooperation in the field of taxation. The draft directive requires member states to amend domestic legislation by the end of 2016 and apply the relevant provisions from the start of 2017.

New rates for calculating notional interest deduction for new equity capital
Cyprus | 20 May 2016

In July 2015 the government introduced a notional interest deduction on new equity capital injected into companies and permanent establishments of foreign companies on or after January 1 2015 for the purpose of financing business assets. The Tax Department recently announced the 10-year government bond rates which will be used to calculate the notional interest deduction on capital introduced in 2016.

Progress on ratification of protocol to Cyprus-Ukraine double tax agreement
Cyprus | 29 April 2016

The protocol amending the Cyprus-Ukraine double tax agreement recently took another step towards ratification after Ukraine's Cabinet of Ministers approved it and forwarded it to Parliament for ratification. The protocol includes a 'most-favoured nation' commitment, whereby if Ukraine enters into another double tax agreement with more favourable provisions, the Cyprus-Ukraine agreement will be amended to match them.

New double tax agreement between Cyprus and Ethiopia
Cyprus | 18 March 2016

Cyprus and Ethiopia recently signed a double tax agreement. It limits withholding tax on dividends, interest and royalties paid by a resident of one contracting state to a resident of the other to no more than 5%. Either contracting state may terminate the agreement by giving six months' written notice no earlier than five years after the agreement enters into force.

Rates for calculating notional interest deduction for new equity capital
Cyprus | 19 February 2016

In July 2015 the government introduced a notional interest deduction on new equity capital injected into companies and permanent establishments of foreign companies on or after January 1 2015 for the purpose of financing business assets. The Tax Department recently announced the 10-year government bond rates on which the notional interest deduction for the 2015 tax year will be based for a number of countries.

Proposed changes to IP box scheme
Cyprus | 12 February 2016

Following opposition to IP box regimes, G20 leaders agreed on a 'modified nexus' approach that allows a taxpayer to benefit from an IP regime only to the extent that it can show material relevant activity, including a clear connection between the rights which create the IP income and the activity which contributes to that income. The Ministry of Finance recently announced plans to amend the Cyprus IP box regime in line with this approach.

Amendments to tax laws to promote restructuring
Cyprus | 05 February 2016

Tax laws were recently amended to temporarily exempt loan restructuring from tax in order to facilitate and encourage the restructuring of non-performing loans. Following the amendments, any benefit, profit or gain arising in the context of restructuring is exempt from income tax and any gain arising from the disposal of property in the context of a restructuring is exempt from capital gains tax.

Implementation of OECD Common Reporting Standard
Cyprus | 22 January 2016

The Ministry of Finance recently issued a decree implementing the Organisation for Economic Cooperation and Development Common Reporting Standard. The decree sets out the framework for financial institutions operating in Cyprus to collect and review customer and investor information regarding tax residence, and to forward prescribed information to the national tax authorities for disclosure to relevant overseas tax authorities.

Second instalment of amendments to tax laws enacted
Cyprus | 15 January 2016

The government recently passed the second instalment of tax incentives aimed at simplifying the tax regime to make it more attractive, effective and equitable, with the aim of stimulating economic activity and attracting direct investment. The latest amendments include provisions to simplify the taxation of offshore hydrocarbon activities, the extension of group relief to overseas companies and the introduction of tax neutrality for foreign exchange gains and losses.

Protocol to double tax agreement between Cyprus and Ukraine signed
Cyprus | 08 January 2016

The Ministry of Finance has recently announced that the protocol to the double tax agreement between Cyprus and Ukraine has been formally signed. A most-favoured nation clause has been agreed for taxes on interest, dividends, royalties and capital gains, which ensures that Cyprus will be treated no less favourably than any of Ukraine's other double tax agreement counterparties.

Double tax agreement between Switzerland and Cyprus enters into force
Cyprus | 20 November 2015

The Tax Department recently announced that the new double tax agreement with Switzerland, signed on July 25 2014, entered into force on October 15 2015. It will therefore have effect regarding taxes withheld at source on amounts paid or credited on or after January 1 2016. For other taxes it will have effect for tax years beginning on or after that date.

OECD revises Cyprus Phase 2 rating to 'largely compliant'
Cyprus | 13 November 2015

The Organisation for Economic Cooperation and Development Global Forum on Transparency and Exchange of Information for Tax Purposes has revised its Phase 2 rating for Cyprus to 'largely compliant'. Cyprus was found to have dealt satisfactorily with all of the deficiencies that were identified in the initial Phase 2 assessment and to be fully compliant or largely compliant with the required standards of the 10 assessment areas.

Changes to tax rulings procedure
Cyprus | 30 October 2015

The Tax Department provides written replies to requests on the interpretation of tax law. In anticipation of changes at the EU level on the automatic exchange of cross-border rulings, and recognising the usefulness of tax rulings in eliminating uncertainty, the department has issued a circular formalising the procedures for obtaining advance tax rulings and setting out the terms on which they are binding.

Details of double tax agreement between Cyprus and Iran
Cyprus | 09 October 2015

Cyprus and Iran recently signed a double tax agreement which closely follows the 2010 Organisation for Economic Cooperation and Development Model Tax Convention. The agreement covers income tax in Iran and Cyprus and corporate income tax, the special contribution for defence and capital gains tax in Cyprus. It also provides opportunities for investments into Iran to be channelled via Cyprus.

Protocol amending double tax agreement between Cyprus and Ukraine agreed
Cyprus | 25 September 2015

The Ministry of Finance has announced an agreement with its Ukraine counterpart on a protocol that will amend the existing double tax agreement between the two countries. A most-favoured nation clause has been agreed for taxes on interest, dividends, royalties and capital gains, ensuring that Cyprus will be treated no less favourably than any of Ukraine's other double tax agreement counterparties.

Amendments to tax laws
Cyprus | 11 September 2015

The government recently submitted a package of amendments to the tax laws to the House of Representatives with the aim of encouraging economic activity, attracting inward direct investment and simplifying the tax regime to make it more attractive, effective and equitable. The amendments will affect income tax, special defence contribution and capital gains tax.

Protocol amending Cyprus-South Africa double tax agreement signed
Cyprus | 28 August 2015

Cyprus and South Africa recently signed a protocol amending their double tax agreement. The protocol amends the definition of 'residence', withholding taxes on dividends and the exchange of information, but does not change the highly beneficial arrangements regarding the taxation of capital gains. The protocol will enter into force when both countries complete their ratification procedures.

New double tax agreement between Cyprus and Iran
Cyprus | 14 August 2015

Cyprus and Iran recently signed a double tax agreement following several years of negotiations. The agreement is the latest step in the Cypriot government's programme of expanding its network of double tax agreements and opens up new opportunities for trade and cooperation between the two countries following the lifting of international sanctions against Iran.

New double tax agreement with Georgia
Cyprus | 07 August 2015

Cyprus and Georgia recently signed a double tax agreement. It closely follows the 2010 Organisation for Economic Cooperation and Development Model Tax Convention, with minor modifications, and the protocol to the agreement clarifies the information exchange provisions. The agreement will come into force once it has been ratified in accordance with both countries' domestic legal procedures.

Proposed amendments to tax laws
Cyprus | 17 July 2015

The Cyprus government has announced a number of proposed tax incentives aimed at encouraging economic activity and attracting inward direct investment. It has also submitted a number of draft laws to the House of Representatives to implement the new provisions of the EU Parent-Subsidiary Directive to simplify the tax regime and make it more attractive, objective and effective.

IP box – a limited opportunity
Cyprus | 05 June 2015

Cyprus's package of incentives and tax exemptions relating to investment in IP rights, commonly known as the IP box, will be closed to new entrants from June 2016. The scheme provides for a maximum tax rate of 2.5% on income earned from IP assets. Any business with significant IP assets or income should consider availing of Cyprus's IP box while the opportunity lasts.

Proposed information exchange amendments
Cyprus | 22 May 2015

The government recently published a draft law which amends the Assessment and Collection of Taxes Law to facilitate the implementation of agreements for automatic exchange of information with other countries. Under the law, the tax commissioner may provide information to implement agreements for automatic exchange of information between Cyprus and other countries.

Double tax agreement signed with Bahrain
Cyprus | 24 April 2015

Cyprus recently signed a new double tax agreement with Bahrain. Together with other agreements between the two countries signed at the same time, the double tax agreement should boost trade between them, which has hitherto been modest. Investment flows between Cyprus and Bahrain are more substantial and the new agreement should also encourage these.

Negotiations in progress for double tax agreement with Barbados
Cyprus | 10 April 2015

The Barbados Government Information Service has announced that negotiations are in progress for a double tax agreement between Cyprus and Barbados, as well as for cooperation in other areas, such as tourism. The conclusion of a double tax agreement between the two countries will assist cooperation in other fields and extend Cyprus's treaty network into the Caribbean.

Cyprus formally removed from Spanish tax haven blacklist
Cyprus | 13 February 2015

Cyprus has been formally removed from the Spanish tax authorities' blacklist of countries regarded as tax havens following the recent entry into force of the double tax agreement between Spain and Cyprus. Formal removal from the blacklist eliminates any doubts regarding the entitlement of Cyprus-resident companies to certain deductions and concessions contained in Spanish tax regulations.

New double tax agreement between Cyprus and Iceland
Cyprus | 06 February 2015

The new double tax agreement between Cyprus and Iceland recently entered into force. The agreement is based on the Organisation for Economic Cooperation and Development Model Convention for the Avoidance of Double Taxation on Income and extends Cyprus's network of double tax agreements to cover 53 countries. The agreement includes provisions on dividends, interest, royalties, capital gains and information exchange.

Tax regime: an overview
Cyprus | 23 January 2015

The Cyprus taxation system was thoroughly overhauled in 2002 in preparation for EU membership. As a result, Cyprus benefits from a simple, modern tax system that is fully compliant with the Organisation for Economic Cooperation and Development and EU requirements. This update provides an overview of the country's tax regime.

Cyprus-Lithuania double tax agreement takes effect
Cyprus | 16 January 2015

The double tax agreement between Cyprus and Lithuania recently took effect. Under its terms there is no withholding tax on dividends paid by a company resident in Lithuania to a company (but not a partnership) resident in Cyprus, provided that the recipient is the beneficial owner of at least 10% of shares in the company paying the dividend.

Cyprus signs agreement with United States under FATCA
Cyprus | 19 December 2014

Cyprus and the United States recently signed an agreement under the Foreign Account Tax Compliance Act (FATCA). As the reporting authority under the agreement, the Inland Revenue Department will issue guidelines for interpreting the agreement in due course. In addition, the Assessment and Collection of Taxes Law will be amended to include the collection and automatic exchange of information in line with FATCA.

Cyprus among first signatories to new OECD/G20 standard
Cyprus | 28 November 2014

Cyprus recently became one of the 51 jurisdictions to sign the new Organisation for Economic Cooperation and Development /G20 Standard for Automatic Exchange of Financial Account Information in Tax Matters at the annual meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The new standard provides for the automatic exchange of all financial information on an annual basis.

Implications of latest Russian 'de-offshorisation' proposals
Cyprus | 07 November 2014

The Russian Ministry of Finance recently published the third version of the draft law on the package of tax initiatives generally referred to as 'de-offshorisation'. Users of Cyprus structures for investment into Russia should analyse the companies and other entities involved in order to assess the possible implications in terms of future tax costs and develop strategies for mitigating them.

Implications of anti-avoidance amendments to EU Parent-Subsidiary Directive
Cyprus | 12 September 2014

Cyprus transposed the EU Parent-Subsidiary Directive into domestic legislation when it updated its tax laws in preparation for EU membership in 2004. The Income Tax Law and the Special Contribution for the Defence of the Republic Law provide a liberal system of double taxation avoidance, which also extends to non-EU countries, as the tax laws treat all non-residents of Cyprus in the same way.

New double tax agreement between Cyprus and Guernsey
Cyprus | 05 September 2014

Cyprus recently signed a new double tax agreement with Guernsey. Guernsey is among the world's most important financial centres and the double tax agreement will be a valuable addition to Cyprus's extensive treaty network. The new agreement closely follows the 2010 Organisation for Economic Cooperation and Development Model Convention and the protocol to the agreement clarifies the information exchange provisions.

Litigation

Court procedure when enforcing European Account Preservation Orders in Cyprus
Cyprus | 06 November 2018

EU Regulation 655/2014 recently established a European Account Preservation Order procedure to facilitate cross-border debt recovery. In Cyprus, claimants must file an application for such an order at the district court with jurisdiction over the main dispute. The Cyprus courts have always required appropriate security to be provided for freezing orders and are likely to adopt a conservative approach to prevent abuse of the procedure. It is hoped that the courts of other member states will also adopt a balanced approach.

Requirements for granting mandatory injunctions on interim applications
Cyprus | 02 October 2018

A recent Larnaca District Court judgment examined the requirements for granting mandatory injunctions on interim applications. The decision is in line with well-established legal principles, as mandatory orders are an extraordinary remedial process granted not as a matter of right, but rather after the exercise of sound judicial discretion. Their application is restricted to clear and exceptional circumstances in which order needs to be restored without delay.

Life imprisonment and whole-life imprisonment – a history of Cypriot case law
Cyprus | 25 September 2018

Life imprisonment generally does not constitute a whole-life sentence because the prisoner will, in most cases, be eligible for early release after a fixed period set by the court. In exceptionally grave cases, the court may order that life should mean life and that the prisoner should remain incarcerated for the rest of their life. The case of Panagiotis Kafkaris was considered sufficiently serious to merit a whole-life sentence and his release marks the end of a landmark case on this issue in Cyprus.

Foreclosure process amended to close appeal loopholes
Cyprus | 18 September 2018

In 2014 the Transfer and Mortgage of Properties Law was amended to introduce a streamlined foreclosure process aimed at helping banks to address the persistently high levels of non-performing loans and so-called 'strategic defaulters'. Several of the amendments were ambiguously drafted and borrowers were quick to oppose them, leading to numerous court appeals to suspend foreclosures that had already begun. In order to address this issue, Parliament recently decided on additional reforms.

Abuse of process and res judicata in asset freezing applications
Cyprus | 11 September 2018

Abuse of process and res judicata were the main issues examined by the Larnaca District Court when deciding on a recent interim application to freeze assets. The court ultimately held that when deciding whether to issue an interim order, it must consider only whether the applicant has shown an arguable case with a visible chance of success and whether, without the order, it would be difficult or impossible to do complete justice at a later stage.

Carriage of goods by sea: principles of agency and functions of bills of lading
Cyprus | 04 September 2018

A recent Supreme Court decision considered the principles of agency and functions of bills of lading and provided a useful summary of this area of law. The case demonstrates the importance of expressly specifying the capacity in which various parties are acting when negotiating or entering into a contract – for example, whether they are acting as principals in their own right or as agents on behalf of someone else.

Supreme Court interprets amended Order 30 and meaning of 'completion of the pleadings'
Cyprus | 21 August 2018

The Supreme Court recently issued a judgment that interpreted the meaning of the term 'completion of the pleadings' as the start of the time limit for issuing an application for directions in accordance with Order 30 of the Civil Procedure Rules. The court noted that Order 30, Rule 1(c) provides no room for saving a claim if the relevant deadlines have expired. The court then considered the appellant's argument that the time limit had not begun with the completion of the pleadings between the plaintiff and the defendant.

Application of Erinford principle
Cyprus | 24 July 2018

Cyprus case law imposes strict conditions on the issue of Erinford orders because, if made, they are likely to be in effect in Cyprus for a much longer time than corresponding English orders. This is because the UK Supreme Court's rules provide it with jurisdiction to examine applications for interim orders, while the Cyprus Supreme Court does not examine such applications.

Alignment of Evidence Law with EU Regulation on Electronic Identification
Cyprus | 03 July 2018

The Evidence Law has been amended to formally recognise electronic evidence and align it with the EU Regulation on Electronic Identification. Law 53(I)/2018 extends the definition of a 'document' in Article 2 of the Evidence Law to include electronic signatures, electronic seals, electronic time stamps, electronic documents and electronic delivery services as defined in the EU regulation.

Supreme Court confirms jurisdiction to determine claims arising in exclusive economic zone
Cyprus | 12 June 2018

In a recent case filed in its admiralty jurisdiction, the Supreme Court of Cyprus had to consider whether accidents which take place in the Cyprus exclusive economic zone (EEZ) give jurisdiction to the Cyprus courts. The court decided that it has jurisdiction to hear disputes regarding accidents which occur within its territory, including the Cyprus EEZ, provided that the accident concerns the prospection or exploitation of Cyprus's natural resources.

Doctrine of payment into court
Cyprus | 22 May 2018

Order 22 of the Civil Procedure Rules provides that in any action for debt or damages, the defendant may at any time, on notice to the claimant, pay into court a sum of money which it considers sufficient to satisfy the claim. Payment into court can be made as soon as an appearance has been filed and until a judgment has been issued. If the amount offered is accepted, the dispute is settled as by compromise, but it does not give rise to res judicata.

Strict application of security for costs rules
Cyprus | 15 May 2018

In Cyprus, as in most jurisdictions, a defendant in litigation which fears that the claimant may be unable to satisfy costs orders made against it can apply to the court for a security for costs order. In civil proceedings, the courts – in certain circumstances – can order the claimant to provide security for the defendant's costs after the trial has ended. However, specific requirements must be fulfilled, and the courts are strict in applying the rules.

Supreme Court decides on acquittal and right to appeal
Cyprus | 24 April 2018

The need for clear and reliable guidelines to determine whether a first-instance criminal court judgment can be appealed arose in a recent application to the Supreme Court. By making an application under Article 149 of the Criminal Procedure Law instead of an appeal, the applicant not only lost the right to appeal, but also found his case dismissed by the Supreme Court without any examination of its substance.

Supreme Court decision breached European Convention on Human Rights
Cyprus | 17 April 2018

The European Court of Human Rights recently reviewed disciplinary proceedings against a former judge that had taken place in the Supreme Court in 2006 and resulted in the judge's dismissal. The court found by a majority of six votes to one that the disciplinary proceedings in Cyprus were in breach of Article 6(1) of the European Convention on Human Rights and ordered the Cyprus government to pay non-pecuniary damages and costs.

Application of EU Service Regulation – formalities versus objectives
European Union | 10 April 2018

The European Court of Justice recently found that the EU Service Regulation must be interpreted and applied to ensure a fair balance between the interests of a party that serves documents and those of the addressee by reconciling the objectives of efficiency and speed of service of procedural documents with the need to ensure that the addressee's right to defence against the documents is adequately protected through the guarantee of their receipt.

Jurisdiction and recognition and enforcement of judgments in civil and commercial matters
Cyprus | 20 March 2018

The issue of jurisdiction was at the centre of a recent action in the Limassol District Court. The decision clarifies the case law relating to the interpretation of Article 7(2) of the recast EU Brussels Regulation and reaffirms the general principle that civil actions are to be brought against individuals and companies in the courts of the place where they are domiciled, except in specific instances where derogations from the general rule apply.

Supreme Court disapproves strict interpretation of Order 30 of Civil Procedure Rules
Cyprus | 27 February 2018

In a recent appeal case, the Supreme Court overturned a first-instance judgment regarding the timing of the completion of the pleadings and, consequently, the deadline for filing a summons for directions under Order 30 of the Civil Procedure Rules. Although the judgment in question examined the previous version of Order 30, it is useful for litigation lawyers as it clarifies when pleadings are deemed to have been completed, which remains the starting point for the deadline to file a summons for directions.

Constitution and quorum of collective administrative bodies
Cyprus | 06 February 2018

A recent administrative court case concerned the legality of a tender for the development of a new €200 million-plus marina in Paphos. The court decision was based on the well-established principle that the decision-making process of any collective body regarding a specific matter must be consistent from beginning to end and requires the presence of the same members of the body in order to ensure that all members are aware of and able to evaluate all factors which come to light during the process.

Court finds that unjustified absence of members invalidates collective body and its decisions
Cyprus | 09 January 2018

A recent administrative court case examined an allegation that an Electricity Authority of Cyprus (EAC) committee established to determine staff promotions had been invalidly constituted. The meeting under review had not been chaired by the EAC chair, as required by the relevant regulations, and no reason for this absence was provided. The court found that the absence of any record of the reasons for the chair's non-attendance at the meeting was sufficient grounds to invalidate the decisions made.

Only completed actions are subject to administrative review
Cyprus | 19 December 2017

A recent case has affirmed that only completed actions can be subject to administrative review, and that an applicant must possess a legitimate interest at three crucial stages in order to pursue an action in the Administrative Court. The case concerned a complaint that a third party had been promoted unfairly in preference to other applicants. However, the applicant had filed his action before the third party accepted the promotion, so that when the action was filed there was no promotion to complain about.

Settlement agreement releases parties from rights and obligations under initial agreement
Cyprus | 12 December 2017

The Supreme Court recently reaffirmed the long-established principle that when contracting parties agree to amend or replace an agreement, the new agreement will replace the old one and define all of their rights and obligations. Accordingly, in a case where a settlement agreement is agreed between the parties, but not fully complied with by one of them, the other party cannot reinstate any of its rights under the initial agreement.

Supreme Court dismisses Marfin's appeal against €100,000 fine from CySec
Cyprus | 28 November 2017

The Supreme Court recently issued its decision in a case concerning the Cyprus Securities and Exchange Commission's imposition of a €100,000 fine on Marfin for buying shares in Marfin Popular Bank Plc on the Athens Stock Exchange during a closed period, which had contravened the Insider Dealing and Market Manipulation (Market Abuse) Law 2005 and the Code of Conduct for Advisers and Related Persons issued thereunder.

Courts consider confusion surrounding foreclosures
Cyprus | 15 August 2017

In order to address the problem of non-performing loans following the 2013 financial crisis, the Transfer and Mortgage of Properties Law was amended in 2014 to speed up and streamline the foreclosure process which allows lenders to repossess and sell properties pledged as security for loans in arrears. With the lower courts unable to agree, significant uncertainties remain as to the application of the new procedure. It now falls on the Supreme Court to reach a decision that will provide guidance and set a binding precedent.

Supreme Court examines role of experts in criminal procedures
Cyprus | 04 July 2017

In two recent judgments concerning the misapplication of the law regarding expert witnesses, the Supreme Court overturned the assize courts' verdicts convicting the accused of serious criminal offences. A common feature of both cases was the Supreme Court's disagreement with the assize courts' propensity to convict defendants on the basis of inadequate evidence.

Supreme Court holds that automatic increases in child support are not unconstitutional
Cyprus | 13 June 2017

The full bench of the Supreme Court, exercising its jurisdiction to examine the constitutionality of laws, recently held by a majority of eight to four that Article 38(2) of the Relationships between Parents and Children Law, which provides for an automatic child support increase of 10% every two years, is not unconstitutional.

District court prohibits unauthorised use of confidential information
Cyprus | 23 May 2017

In many cases, employees – particularly those in key roles in investment firms and corporate and fiduciary service providers – possess confidential information that can be exploited to generate income for a new employer. In a recent decision regarding an application for injunctive relief prohibiting the unauthorised use of confidential information by the applicant's former employee, the Limassol District Court reaffirmed the Cyprus courts' general approach to this matter.

Duty of full and frank disclosure in interim order applications
Cyprus | 16 May 2017

The courts' power to grant interim orders to protect assets that may be at risk of alienation (ie, Mareva orders) pending the final determination of an action is well established under the Cyprus legal system. In making an application for such an order, the applicant must make a full and frank disclosure of all material facts. The Supreme Court recently clarified that full and frank disclosure involves more than providing the court with every possible document and leaving it to discern what might be significant.

Supreme Court considers Article IV of New York Convention's duly certified copy requirement
Cyprus | 09 May 2017

The Supreme Court recently issued a judgment which focused on Article IV of the New York Convention. The court considered what was meant by Article IV's requirement for a duly certified copy of an original arbitral award. The court found that since the convention does not describe the preconditions for a valid authentication or certification, it is a matter to be decided by the court in which recognition is sought on the basis of local law.

First Supreme Court judgment on rent control courts' jurisdiction to issue summary judgments
Cyprus | 25 April 2017

A recent Supreme Court judgment placed a limit on the application of the general Civil Procedure Rules in cases filed before a rent control court (RCC). In the case in question, tenants appealed against an RCC decision. In its judgment on the appeal, the Supreme Court stated that the right of a tenant to file an opposition is a right provided for by the law and that it is not within the RCCs' discretion to allow or disallow such a filing.

Right of judgment creditor to enforce memorandum of judgment against higher value immovable property
Cyprus | 11 April 2017

Under the Civil Procedure Law, a judgment creditor has the right to make any immovable property in which his or her judgment debtor is beneficially interested security for payment of the judgment debt. In a recent case, the Supreme Court considered for the first time the right of a judgment creditor to register a judgment on a debtor's immovable property by way of a memorandum of judgment in circumstances in which the value of the property was much higher than the judgment debt.

District court rules affidavit inadmissible because jurat was in foreign language
Cyprus | 04 April 2017

In a recent judgment, the Nicosia District Court decided that an affidavit was inadmissible due to the fact that the jurat was not in one of Cyprus's two official languages (ie, Greek or Turkish). Considering that it has been common practice among lawyers to ensure that a jurat is in the same language as the affidavit that it purports to validate, the decision is somewhat unexpected.

Court reaffirms principle of awarding damages on degree of liability basis
Cyprus | 20 December 2016

A recent decision of the Larnaca District Court reaffirms the well-established principle that punitive and exemplary damages can be awarded on the basis of the degree of liability. The case concerned the deaths of twin brothers, who were among 13 people killed when containers holding munitions exploded. The court awarded the plaintiffs just over €257,000 in respect of each death, together with interest.

Court decision illustrates impact of company law changes on winding-up petitions
Cyprus | 30 August 2016

A recent district court interim judgment has provided insight into the impact of the amendments to the Companies Law on pending winding-up applications. The decision is a welcome confirmation that the courts are prepared to take a practical and constructive approach to winding-up proceedings, rather than allowing an overly rigid adherence to formalities delay the administration of justice.

Recent changes to civil procedure rules
Cyprus | 16 August 2016

A number of changes to the civil procedure rules recently came into effect in order to reduce delays in the civil justice system. Under these changes, a claimant must issue a summons for directions within 30 days of the date on which the pleadings are considered completed. Further, each party must now specify the precise directions that it wants the court to issue within 30 days of service of the summons for directions.

Admissibility of electronic signatures in legal proceedings
Cyprus | 09 August 2016

The rapid development and expansion of electronic commerce has forced the European Union to ensure that electronic signatures receive the necessary legal recognition. The legal framework in Cyprus is fully in line with EU standards since the EU Electronic Signatures Directive was transposed almost verbatim into domestic law by the Electronic Signatures and Related Matters Law 2004.

Insurers not liable to pay if statutory conditions not met
Cyprus | 17 May 2016

In a recent case regarding liability for a car accident, the Supreme Court rejected a claim for damages against two insurers because the appellants had failed to prove that the first insurer's client was driving without the consent of the vehicle owner and had not provided the second insurer with statutory notice of when the action was filed as required under third-party insurance law.

Doctrine of informed consent in Cyprus
Cyprus | 05 April 2016

Medical negligence is a relatively new area in Cyprus and domestic case law is still developing. In the absence of local precedent common law, rulings (including those of the English courts) which were decided up to and including August 15 1960 are binding on Cyprus courts to the same extent as Supreme Court of Cyprus decisions. Common law decisions after that date are not binding, but have great persuasive authority.

Condition of urgency in interim orders applied for ex parte
Cyprus | 05 January 2016

The Limassol District Court recently granted an interim order preventing the defendants from transferring, mortgaging or alienating land which the plaintiffs claimed had been illegally obtained. As the interim order had been applied for and issued ex parte, the concern was that the court had to be satisfied that it was urgent to extend it until the end of the trial.

Supreme Court confirms principles for issuing gagging orders with Norwich Pharmacal orders
Cyprus | 17 November 2015

In a recent judicial review decision, the Supreme Court confirmed that judges have discretionary power to issue disclosure orders (otherwise known as Norwich Pharmacal orders) that are backed up by gagging orders, which is common practice to limit the risk of removal or destruction of evidence.

Appointment of receiver over a Cyprus company
Cyprus | 20 October 2015

A recent judgment of the Nicosia District Court reaffirmed the approach of the Cyprus courts regarding applications to appoint a receiver over the assets of a Cypriot company – namely, that such an intrusive remedy will be ordered only where the court is persuaded that it is absolutely necessary in order to protect those assets and an injunction prohibiting the alienation of the assets would be insufficient.

Affidavit leading to warrant of arrest
Cyprus | 06 October 2015

The Admiralty Jurisdiction Order, which governs the operation of the Admiralty Court, provides that an affidavit must be filed in accordance with Rules 50 to 54 for the issue of a warrant to arrest property. While Rule 51 requires that the affidavit state the nature of the claim and that the aid of the court is required, Rule 54 gives the court discretion to overlook formal defects.

Salvage claims in Admiralty Court
Cyprus | 01 September 2015

In a recent decision the Cyprus Admiralty Court took the opportunity to reaffirm the main principles of the law on marine salvage. The court reiterated that for salvage to be earned, there must be an element of risk and salvage services must be rendered successfully, on a voluntary basis and for the salvage of property that could constitute a salvage reward, such as a ship or its cargo.

New Administrative Court established
Cyprus | 18 August 2015

A new law provides for the establishment of an Administrative Court in Nicosia, with exclusive jurisdiction to adjudicate administrative recourses under Article 146 of the Constitution. It will have jurisdiction to review at first instance the lawfulness of decisions, actions or omissions of any organ, authority or person exercising executive or administrative authority, and the power to validate or nullify any such decision, action or omission.

Abuse of process in private criminal prosecutions
Cyprus | 09 June 2015

The Supreme Court recently overturned a first-instance decision in a criminal case. The court of first instance had determined that the existence of a parallel civil action with a private criminal case was an abuse of process. It acquitted the defendants and ended the proceedings. The Supreme Court disagreed, overturning the acquittal and remitting the case to the court of first instance.

Principle that drivers are subject to greater duty of care than pedestrians reaffirmed
Cyprus | 28 April 2015

A recent Nicosia District Court decision reaffirmed the well-established principle that the driver of a car is subject to a greater duty of care than a pedestrian. The case arose from a collision between the plaintiff (a teenage boy crossing the road on foot) and a car driven by the defendant. The court held that the driver was negligent and had acted without the proper lookout and due care required.

No state immunity in commercial agreements targeting contraband cigarettes
Cyprus | 21 April 2015

The Supreme Court recently examined an appeal against a district court decision to set aside orders obtained by Tlais Enterprises Limited to seal and serve an action against Her Majesty's Revenue and Customs (HMRC). The case concerned a tripartite agreement between Tlais, Gallaher International Limited and HMRC to reduce the import of contraband cigarettes into the United Kingdom.

Reminder of effect of consent judgments in in rem proceedings
Cyprus | 10 February 2015

A recent judgment of the Admiralty Court is a useful reminder of the need to prove a claim in in rem proceedings. The judgment shows that skipping proof has potentially devastating effects on a claim, as it excludes the claimant from the priorities procedure and ranks its claim after all in rem judgments.

Ruling offers guidance for third-party intervention in admiralty actions
Cyprus | 13 January 2015

Two applications for Supreme Court reviews of Admiralty Court first-instance judgments were recently filed. The subsequent ruling confirms that the fact that all actions against a vessel are scheduled on the same day does not by itself lead to a conclusion that filing an application to intervene long after the event may be an abuse of court procedure.

Loss of use claim in private yacht claims
Cyprus | 23 December 2014

There is no reported case law in Cyprus regarding damages for the loss of use of a non-commercial vessel such as a private pleasure yacht used by its owner for recreational purposes. A recent judgment issued by the Admiralty Court of Cyprus is noteworthy for the judge's comments on the damages to which the claimant would have been entitled had he succeeded, rather than the reasons for rejecting his claim.

Declaratory relief by Cyprus courts
Cyprus | 18 November 2014

The Supreme Court recently reaffirmed the power of the courts to issue declaratory orders in accordance with Article 41 of the Administration of Justice Law. The case concerned the filing of an action by various single ship companies seeking declaratory orders to the effect that they were the owners of the relevant vessels, which was disputed by the defendant companies.

Supreme Court's role in reviewing proposed legislation
Cyprus | 07 October 2014

The debate regarding new legislation to streamline the procedure for the forced sale of mortgaged property illustrates the role of the courts in reviewing proposed legislation. The memorandum of understanding that Cyprus concluded with its international creditors in 2013 committed the government to introducing a so-called 'foreclosure law' – legislation to amend the procedure for the forced sale of mortgaged property to allow for private auctions.

Supreme Court confirms sentencing principles
Cyprus | 05 August 2014

A recent criminal appeal before the Supreme Court outlines the principles to be followed in sentencing offenders, particularly in terms of relating the sentence to the gravity of the offence. In the case at hand the court considered a prison sentence to be appropriate: any lesser sentence would not have served the purpose of sentencing, which is not only to punish the offender, but also to deter others from similar behaviour.

Assessing credibility and intervention by the Supreme Court
Cyprus | 24 June 2014

Assessing credibility is a delicate and complex task which courts undertake every time they are called upon to deliver a judgment. The court must assess the credibility of each witness it hears and the evidence presented, and decide whether that evidence is credible. In certain circumstances the appellate court may intervene in the conclusions and findings of the first-instance court, including those on the credibility of witnesses.

Amendments to pleadings – factors that guide courts' discretion
Cyprus | 13 May 2014

The courts have discretionary power to allow amendments to pleadings. Recent case law highlights the factors that the courts will consider in this regard, including the need, nature, risk and type of the amendment, as well as a party's conduct, when the amendment is requested and whether allowing the amendment will cause prejudice.

Are you really interested? Court considers limits to registered shipowners' rights
Cyprus | 08 April 2014

The Supreme Court in its admiralty jurisdiction recently considered an application under Section 30 of the Merchant Shipping (Registration, Sales and Mortgages of Ships) Law for an order prohibiting the respondents from dealing with the two vessels registered in their name and ownership. Section 30 empowers the court to make an order prohibiting any dealing with a ship or any share in a ship.

Reminder: punishment must consider defendant's personal circumstances
Cyprus | 11 February 2014

The Limassol District Court recently took the opportunity to reiterate the principle that the sentence imposed in a criminal trial must reflect not only the circumstances and severity of the offence, but also the personal circumstances and conduct of the defendant. Choosing not to impose a custodial sentence, the court took into account a number of mitigating factors.

Interim orders regarding disputed share pledges
Cyprus | 28 January 2014

Pledges of shares are frequently encountered in Cyprus holding and finance structures. The Contract Law provides that in order to be valid and enforceable, a contract of pledge of share certificates in a company as security for the payment of a debt or performance of a promise must meet certain conditions. The Cyprus courts recently considered a dispute regarding the enforcement of such a pledge.

Court reaffirms deviations from forum non conveniens principles
Cyprus | 07 January 2014

The Limassol District Court recently had the opportunity to examine aspects of the forum non conveniens doctrine in the context of an application to set aside service of a writ of summons. The case is one of a series of actions between Gazprombank and Janna Bullock in various jurisdictions, in which the bank is seeking to recover $21 million in damages it claims to have suffered due to purported fraud by Bullock and her associates.

Courts continue to assess depositor applications following Eurogroup bail-in
Cyprus | 10 December 2013

In March 2013, as a result of the measures imposed as a condition for international financial support, depositors in Cyprus's two largest banks who held credit balances in excess of €100,000 lost a substantial proportion of the excess above €100,000. Unsurprisingly, this has led to a flood of litigation by depositors against the Central Bank, the two banks concerned and individuals employed by or associated with such banks.

Never too early to intervene: court revisits third-party intervention
Cyprus | 01 October 2013

The Cyprus Admiralty Court recently considered another application for intervention against the proceeds of the sale of a ship, in which the applicant disputed the claim against the ship put forward by the bank. The application was brought under the Admiralty Jurisdiction Order, on the basis that the applicant had an interest in the property sought to be affected by the bank's action.

Government announces court digitisation project
Cyprus | 17 September 2013

The government recently announced its decision to invite tenders for the digitisation of court procedures in all districts of Cyprus, with the dual objectives of streamlining the management of the court system and providing users of the courts with new functionality and better information. The new system is intended to provide a range of online services that will result in substantial time savings.

Supreme Court argues for rehabilitation and reform of offenders
Cyprus | 20 August 2013

A recent case before the Supreme Court concerned six appeals filed by six co-defendants against sentences imposed by the court of first instance in an indictment which contained a total of 20 charges of armed robbery. The Supreme Court reiterated that a court's duty when imposing a sentence should not be limited to punishment, but should also aim to encourage the rehabilitation and reform of the offender.

Supreme Court rules on administrative recourse in bank resolution measures
Cyprus | 16 July 2013

The Supreme Court has exclusive jurisdiction to adjudicate any complaint that a decision, act or omission is contrary to the Constitution or law, or is made in excess or abuse of powers. Following substantial losses for customers due to decisions of the Central Bank of Cyprus as part of its bank resolution scheme, the court has recently considered the constitutionality of such decisions.

Court considers application for third-party intervention in admiralty action
Cyprus | 02 July 2013

A recent judgment arising from one of a series of claims being dealt with by the Admiralty Court against the ship AVANTIS II gives further insight into the principles that the court will apply when considering applications for intervention by a third party in admiralty actions. The court stressed that in such an application, it is of utmost importance to identify the applicant's interest and provide clear evidence of its existence.

Freezing orders against non-cause of action defendants
Cyprus | 07 May 2013

The Cyprus courts have the discretion to issue a wide variety of provisional measures. These include the power to issue so-called 'Chabra orders' (ie, freezing orders directed to a party against which the claimant does not have a substantive cause of action, made in order to enforce a judgment against a party against which the claimant does have a substantive cause of action).

Ship arrest and security for release: court decision offers valuable insight
Cyprus | 05 March 2013

A recent decision of the Supreme Court in its first instance admiralty jurisdiction provides valuable insight into the court's approach to applications for the arrest of vessels and for security to be lodged with the court for release of the vessel. The case centred on damage caused to a number of fish cages by a ship on approach to the port of Vasiliko, resulting in the loss of the fish that had been kept in the cages.

Court considers application for security for costs
Cyprus | 12 February 2013

A recent judgment arising from one of a series of claims being dealt with by the Cyprus courts against a ship gives an insight into the principles that the courts will apply when considering applications for security for costs in admiralty cases. The applicable law will depend on whether the party against which such an order is sought can be considered an 'adverse party' under Rule 185 of the Admiralty Jurisdiction Order.

Attorney general's discretion to remit cases to lower court reinstated
Cyprus | 15 January 2013

Under a recently reinstated rule, the attorney general is once again entitled to remit a case to a different court from that given jurisdiction by statute. Such action can be taken if the circumstances of the case reduce its apparent gravity to a level that does not require the involvement of the higher court. The restoration of this discretionary power preserves an essential human aspect of the criminal justice process in Cyprus.

Lawyers' limited company: recourse under Article 146 of the Constitution
Cyprus | 18 December 2012

The Supreme Court was presented with a petition by a firm of lawyers incorporated as a lawyers' limited company following refusal by the registrar of companies to register a subsidiary company providing escrow services. The court ruled that a lawyers' limited company may provide advice or other services ancillary or related to the services provided by an individual lawyer, whether personally or as a trustee.

Supreme Court considers application to amend in rem report
Cyprus | 11 December 2012

In a recent decision the Supreme Court dealt with an application by summons to amend the statement of claim filed by the plaintiff in an action in rem. The key consideration that the courts will apply in assessing such an application is the effect of the proposed amendment on the interests of the respondent. If the effect on the respondent is disproportionate, the court will dismiss the application.

Appeals on the rise following changes to evidential rules on hearsay
Cyprus | 27 November 2012

The evidential rules in Cyprus regarding hearsay and corroborative evidence have undergone a series of changes over the past decade. This has led to appeals against a number of criminal convictions, particularly in sexual assault cases. The changes have made it easier to convict defendants, even where the evidence is the sole testimony of a complainant or a minor, or hearsay evidence.

Supreme Court declares law on sales incompatible with European legislation
Cyprus | 20 November 2012

In a unanimous decision, the Supreme Court of Cyprus recently ruled that certain provisions of the Law Regarding the Sale of Goods at Discounted Prices that regulate clearance sales by retailers are incompatible with the EU directive on unfair business-to-consumer commercial practices. The Supreme Court held that the proper objective of a law regulating sales is to protect consumers, rather than to protect business enterprises.

Minimising risks of contempt of interim orders by financial institutions
Cyprus | 13 November 2012

Courts in Cyprus have the discretionary power to issue interim orders, provided that certain conditions have been satisfied. In addition, it is possible to apply for interim measures without notice to the respondent through an ex parte application. The court will consider the application only if there is an element of extreme urgency. Furthermore, the applicant must make full and frank disclosure of all material facts.

Supreme Court reconfirms hands-off approach to banking obligations
Cyprus | 23 October 2012

The Supreme Court recently reconfirmed the general principle that courts will rarely interfere in banking mechanisms created by virtue of irrevocable bank obligations. In this case, even though the respondents had issued an irrevocable bank guarantee, they did not receive the goods. Among other things, the proceedings raised issues of international financing and compensation on the basis of unjust enrichment.

Importing secondhand cars from member states to Cyprus
Cyprus | 09 October 2012

Cyprus has no domestic vehicle industry and is totally reliant on imports. Its entry to the European Union in 2004 necessitated changes to the taxation of imported vehicles, but interpretations of how the system should be applied have varied. Two recent Supreme Court decisions have made clear that the existing legislation on the issue is inconsistent with the EC Treaty.

Supreme Court offers guidance on contributory negligence
Cyprus | 25 September 2012

In a recent judgment, the Supreme Court clarified the principles underlying the apportionment of negligence. The court concluded that there is no general legal principle apportioning a higher percentage of negligence to the driver in the case of road accidents. It agreed with the court of first instance that the respondent had taken all the necessary actions, except those that were found to be negligent.

New law on limitation of actions
Cyprus | 17 July 2012

When Cyprus gained independence in 1960 it retained the colonial-era Limitation of Actions Law, which prescribed the time limits within which claims must be brought before a court. A new law was recently passed with respect to the limitation periods of actionable rights. Among other things, the law contains provisions on limitation periods for secured loans, civil wrongs, contracts and succession, and lists various exceptions.

Court decides on taking of evidence via teleconferencing
Cyprus | 26 June 2012

EU Council Regulation 1206/2001 regulates cooperation between the courts of EU member states in relation to taking evidence in civil and commercial matters. In a decision based on the regulation, Cyprus courts have ruled that evidence may be taken via teleconferencing. This confirms the Cyprus courts' long-established readiness to do whatever is necessary within their powers to ensure the right of all litigants to a fair trial.

Admiralty jurisdiction: ship arrest, cargo arrest and sale pendente lite
Cyprus | 19 June 2012

In a recent case the claimant filed an action against a ship and its owner to recover unpaid charges for bunkering and maintenance services provided to the ship. The claimant also applied to the court for the ship to be arrested. The court arrested the ship on the basis of the claimant's application and later also approved the sale of the ship pendente lite (ie, pending litigation).

Power of the courts to appoint a receiver
Cyprus | 12 June 2012

A receiver may be appointed by a court order to receive and, if authorised by the court, to manage specified assets and to deal with them as authorised under the order. The power of the civil courts to appoint a receiver under Section 32(1) of the Courts of Justice Law is well established, having been affirmed by both the district courts and the Supreme Court.

Court rules on illegal immigrant's right to remain
Cyprus | 10 April 2012

The Supreme Court recently ruled on the right of an HIV-positive illegal immigrant to remain in Cyprus. This case is of fundamental importance because it involves the interaction of three legal orders - the domestic law of Cyprus, EU law and international law. This case is also notable for the teleological interpretation given to EU Directive 2005/85/EC.

Court rules on procedure for setting aside judgments
Cyprus | 27 March 2012

The District Court of Nicosia recently ruled on the court procedure for setting aside judgments. The Civil Procedure Rules allow a party to litigation to request that the court set aside a final judgment issued against it, and give the court full discretion to set aside or amend a judgment when it deems that this would be just and fair. The wide scope of this provision has given rise to very significant and rich case law on this matter.

Court rules on role of letters of credit in Cyprus
Cyprus | 21 February 2012

The critical role that letters of credit have played in the growth of international trade is widely acknowledged and there is extensive case law on the subject. In one such case, the Cyprus courts recently refused to issue an injunction forbidding a bank to make payment under a letter of credit. The decision reaffirms the courts' reluctance to interfere with the performance by a bank of a letter of credit unless fraud is involved.

Court considers stay of enforcement in Norwich Pharmacal orders
Cyprus | 17 January 2012

In a recent case the Supreme Court of Cyprus considered whether and, if so, on what basis a stay of enforcement should be granted pending appeal in Norwich Pharmacal orders. However, there is a risk that that the criteria set out by the Supreme Court in its decision lean in favour of the parties challenging Norwich Pharmacal orders and will lead to such orders losing their strength and importance.

Supreme Court declares municipality laws unconstitutional
Cyprus | 20 December 2011

In a recent case the full bench of the Supreme Court decided by a majority that laws enacted by the House of Representatives in 2010, amending the Municipality and Communities Law to allow civil servants to participate in local elections, were unconstitutional. Following the ruling, any public servant who is elected to a council and chooses to serve on it must resign from his or her public service position.

Courts rule on Norwich Pharmacal relief in fraudulent transfer of money case
Cyprus | 13 December 2011

The Cyprus courts recently upheld an application for Norwich Pharmacal relief in a case related to the fraudulent transfer of money to an account with a Cyprus bank. The bank had opposed the application, arguing that it was contractually obliged to its client on the basis of banking privilege. The court dismissed the bank's argument, stating that it was in the public interest that the identity of the fraudsters be discovered.

No use crying over spilled coffee: court rules in negligence case
Cyprus | 06 December 2011

The Civil Wrongs Law provides that negligence consists of either performing an act which a reasonable prudent person would not do or failing to perform an act which such person would do, causing damage as a result. The Limassol District Court recently ruled in a negligence case, awarding damages against an airlines to a claimant for burns suffered when coffee was spilled on her onboard a flight.

Supreme Court clarifies meaning of 'third party' in compulsory insurance
Cyprus | 22 November 2011

In a recent decision, the Supreme Court ruled that although insurance companies are liable to cover a policyholder against damages to persons or to property of third parties that result from the policyholder's negligence, they are not liable to compensate the policyholder if he or she is not driving the vehicle and suffers injury as a result of the negligence of the driver.

Advance-fee fraud: tracing and recovering assets through the courts
Cyprus | 27 September 2011

Advance-fee fraud is a classic form of white collar crime, in which the targeted victim is persuaded to advance money to the criminal in the hope of realising a significantly larger gain. The Supreme Court recently confirmed the power of courts to issue provisional measures and asset-freezing orders. The recent Leon Brener case is a good illustration of the powers of Cyprus courts in assisting victims of fraud.

Supreme Court clarifies approach for enforcement of arbitral awards
Cyprus | 02 August 2011

Alternative dispute resolution proceedings and arbitral awards brought before Cyprus courts are generally respected, as summarised in a number of judgments before the Supreme Court. In a recent case, the court made clear that while the applicants had filed the original arbitration agreement with the arbitration court, this did not relieve them of the obligation to file it with the court in the proceedings to enforce the award.

Enforcement of judgments by writs of attachment
Cyprus | 26 July 2011

The Nicosia District Court recently made an absolute order for the attachment of assets in the hands of a third party. The judge noted that such attachment is permitted by the Civil Procedure Rules as a means of execution of judgments and is recognised by law. Accordingly, the court reaffirmed its order requiring the third party not to waive the fee that it was obliged to pay the judgment debtor.

Court rules on clarity of pleadings in legal proceedings
Cyprus | 12 July 2011

In a recent decision the Limassol District Court reconfirmed that pleadings must contain the necessary details to allow the other party to form a clear and precise picture of the nature and extent of the case that it will be facing at the hearing. When this rule is breached, the other party has the right to apply for an order requiring the provision of the necessary details.

Using Norwich pharmacal relief and disclosure orders
Cyprus | 24 May 2011

The Nicosia District Court recently ruled in a case involving fraud and money laundering, in which the deceived entity requested a freezing injunction against a bank account and various Norwich Pharmacal orders. The decision confirms the readiness of the Cyprus judicial system to provide effective and efficient assistance in combating fraudulent conduct and money laundering activities.

Supreme Court affirms and distinguishes hire-purchase contracts
Cyprus | 08 February 2011

The Supreme Court has reaffirmed the validity of hire-purchase contracts, holding that the two elements distinguishing hire-purchase agreements from direct sale contracts are: the right of return of the subject matter before, during or subsequent to the payment of the instalments and before the exercise of the right of purchase; and the absence of an obligation on the part of the hire-purchaser to purchase the goods.

Further suspension of limitation periods
Cyprus | 11 January 2011

Limitation periods in Cyprus are set out in the Limitation of Actions Law. The law was suspended in 1964 following inter-communal disturbances and has effectively remained suspended ever since. The Suspension of Limitation Period (Provisional Provisions) Law provided that it would re-enter into force with effect from June 1 2005; however, this has been postponed by a succession of laws passed in the interim.

Mareva injunctions and freezing orders pending determination of derivative action
Cyprus | 07 December 2010

A case in progress in the Limassol District Court gives useful guidance on the issue of urgency as it affects the courts' readiness to issue interim orders on an ex parte basis. The judge stated that in this case, the question of urgency related not to the time of the request, but rather to the need for a remedy to be granted without notice to the other side.

First instance court summarises preconditions for interlocutory relief
Cyprus | 05 October 2010

The power of Cyprus courts to grant interlocutory relief pending determination of the main trial is well established. In a recent decision the Larnaca District Court had the opportunity to summarise the preconditions for courts to issue interim orders which constitute discretionary remedies. The primary legal basis for orders of this nature is Section 32 of the Courts of Justice Law.

Scrutinizing and supporting arbitration proceedings before Cypriot courts
Cyprus | 20 July 2010

The Supreme Court of Cyprus recently delivered a decision reaffirming the Cypriot courts' support of the arbitration process in accordance with certain principles. The Supreme Court's decision adds clarity to the powers and obligations of arbitrators and further demonstrates that Cypriot courts will respect and support arbitration proceedings and the function of arbitrators.

Supreme Court rules on issue of international arbitration and ship arrests
Cyprus | 18 May 2010

In a recent case the admiralty division of the Supreme Court held that a vessel cannot be arrested as security for a potential future award in London arbitration proceedings. Basing its decision on an English Court of Appeal decision, the court concluded that the Cyprus Admiralty Court did not have jurisdiction "since the request of the plaintiff [was] for security in connection to the result of an arbitration procedure".

Shipping & Transport

Ballast Water Management Convention enters into force
Cyprus | 24 October 2018

The Deputy Ministry of Shipping recently announced that the International Convention for the Control and Management of Ships' Ballast Water and Sediments will enter into force in Cyprus on 8 November 2018. The Cyprus shipping authorities will apply the requirements of the convention to ships that fly the flag of a country which is not a party to the convention to the extent necessary to ensure that they are not treated more favourably than ships flying the flag of parties to the convention.

English translation of merchant shipping law made available
Cyprus | 10 October 2018

The Deputy Ministry of Shipping has announced that an English translation of the Merchant Shipping (Recognition and Authorisation of Organisations) Law 2011 is now available on its website. The law sets out common rules and standards for organisations that inspect and survey Cyprus-flagged ships and regulates dealings between such organisations and the Cyprus Maritime Administration. The definitive text of the law is in Greek and the translation is for information purposes.

Carriage of goods by sea: principles of agency and functions of bills of lading
Cyprus | 29 August 2018

A recent Supreme Court decision considered the principles of agency and functions of bills of lading and provided a useful summary of this area of law. The case demonstrates the importance of expressly specifying the capacity in which various parties are acting when negotiating or entering into a contract – for example, whether they are acting as principals in their own right or as agents on behalf of someone else.

New circular on use of electronic certificates
Cyprus | 01 August 2018

The Deputy Ministry of Shipping recently issued a circular informing recognised organisations, security organisations, registered owners, bareboat charterers, managers and representatives of ships flying the Cyprus flag that it now accepts statutory certificates issued to Cyprus-flagged vessels by recognised organisations in electronic form, provided that they satisfy the International Maritime Organisation requirements set out in its Guidelines for the Use of Electronic Certificates.

Supreme Court confirms jurisdiction to determine claims arising in exclusive economic zone
Cyprus | 06 June 2018

In a recent case filed in its admiralty jurisdiction, the Supreme Court of Cyprus had to consider whether accidents which take place in the Cyprus exclusive economic zone (EEZ) give jurisdiction to the Cyprus courts. The court decided that it has jurisdiction to hear disputes regarding accidents which occur within its territory, including the Cyprus EEZ, provided that the accident concerns the prospection or exploitation of Cyprus's natural resources.

International Convention for the Control and Management of Ships' Ballast Water and Sediments ratified
Cyprus | 23 May 2018

Cyprus recently ratified the International Convention for the Control and Management of Ships' Ballast Water and Sediments. Its objective is to prevent, reduce and control pollution of the marine environment – especially the spread of harmful aquatic organisms from one region to another – and the consequential damage to health and natural resources. To meet this objective, the convention establishes standards and procedures for the management and control of ships' ballast water and sediments.

Publication of latest Central Bank ship management survey
Cyprus | 16 May 2018

Since 2009, the Central Bank has carried out semi-annual market surveys of Cyprus residents who provide ship management services to ship-owning companies registered in Cyprus and abroad. The surveys collect data on financial transactions (revenues and expenses) between resident ship management companies and non-residents of Cyprus. The most recent survey, which covers the second half of 2017, was published on April 27 2018.

Certificates of proficiency in training for ships operating in polar waters
Cyprus | 02 May 2018

The Deputy Ministry of Shipping recently announced that from January 1 2020, all masters, chief officers and officers in charge of a navigational watch serving on board Cyprus-flagged vessels operating in polar waters must hold the appropriate certificate of proficiency in training, as required by the International Maritime Organisation's International Code for Ships Operating in Polar Waters.

New standards for recreational and personal craft
Cyprus | 25 April 2018

The Department of Merchant Shipping recently announced the publication of the Essential Requirements (Recreational Craft and Personal Watercraft) Regulations 2017. The new regulations set required standards for design and construction and exhaust and noise emissions. They apply to recreational and personal craft, specified components when placed on the EU market, engines and engine conversions and substantial modifications to vessels.

Contact details for new Deputy Ministry of Shipping released
Cyprus | 11 April 2018

​The Deputy Ministry of Shipping has announced that the email addresses of its personnel and departments have been changed following its conversion from a department of the Ministry of Transport, Communications and Works to a deputy ministry. To ensure a smooth transition, the existing email addresses of ministry personnel will remain valid until June 30 2018 and departmental email addresses will remain valid until April 30 2019.

Certificates of competency under International Convention on Standards of Training, Certification and Watchkeeping for Seafarers
Cyprus | 21 March 2018

​The Department of Merchant Shipping recently issued an updated list of countries whose certificates of competency are recognised by Cyprus under the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, as amended. The only change from the previous list, issued in November 2014, is the addition of Jordan.

Department of Merchant Shipping transformed into deputy ministry
Cyprus | 14 March 2018

The Department of Merchant Shipping has announced that it will be a deputy ministry with effect from March 1 2018 and be renamed the Deputy Ministry of Shipping, following the entry into force of the Establishment of a Deputy Ministry of Shipping and Appointment of a Deputy Minister of Shipping and for Matters Connected Therewith Law 2017. As successor to the Department of Merchant Shipping, the deputy ministry will assume all of the former's rights, responsibilities, powers and obligations.

New safety requirements for coastal passenger vessels enter into force
Cyprus | 21 February 2018

Article 47A of the Merchant Shipping (Issue and Recognition of Certificates and Marine Training) Laws provides that crew members on-board coastal passenger vessels who have safety duties relating to passengers must meet the mandatory minimum familiarisation and basic safety training and instruction requirements for all seafarers under Regulation VI/I of the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers.

Renewal of civil liability certificates
Cyprus | 07 February 2018

The Department of Merchant Shipping recently issued a reminder to registered owners, bareboat charterers, managers and representatives of Cyprus-flagged ships regarding the renewal of civil liability certificates. The expiry date for most existing certificates is February 20 2018 and there has been an unprecedented delay in the submission of renewal applications. The department therefore urges parties that require a renewal to apply without further delay.

Amendments to training, certification and watchkeeping standards enter into force
Cyprus | 31 January 2018

The Department of Merchant Shipping recently issued a notification to owners, bareboat charterers, managers and representatives of Cyprus-flagged and foreign-flagged vessels visiting ports in Cyprus. The amendments concern the mandatory minimum requirements for the training and qualification of masters, officers, ratings and other personnel on passenger ships and masters and deck officers on ships operating in polar waters.

Tonnage tax – maintenance of prescribed levels of community-flagged vessels
Cyprus | 17 January 2018

The Merchant Shipping (Fees and Taxing Provisions) Law 2010 requires the Department of Merchant Shipping to assess the community-flagged share of each participant in the tonnage tax scheme as at the third year from the date of opting to be taxed under the scheme. The department recently announced the arrangements for the review as at December 31 2017, which will cover companies that entered the tonnage tax scheme between January 1 2014 and January 1 2015.

Increase in maximum number of firearms permitted under anti-piracy law
Cyprus | 10 January 2018

On the basis of experience gained since the implementation of the Protection of Cyprus Ships Against Acts of Piracy and Other Unlawful Acts Law, the Department of Merchant Shipping has increased the maximum number of firearms that approved private ship security contractors are entitled to register from 400 to 600. However, there has been no change to the ratio of two firearms per guard; the change will therefore affect only contractors with more than 200 guards.

New Cyprus-India agreement on merchant shipping
Cyprus | 20 December 2017

Cyprus and India recently signed a new reciprocal agreement on merchant shipping. Among other things, the agreement requires each country to treat the other country's vessels in the same way as it treats its own vessels engaged in international voyages. Further, the taxation of income of any kind derived from the use of vessels in international traffic is governed by the double tax agreement.

Training subsidy scheme amendments
Cyprus | 13 December 2017

Since November 2015 the government has subsidised practical training on board ships for deck and engine cadet officers. The Department of Merchant Shipping recently announced changes to this scheme and the procedure for claiming reimbursement. The scheme has now been extended to cover vessels managed by companies located in other EU member states and a new requirement of at least 750 kilowatts of propulsion power has been introduced.

Tonnage tax: countries whose ships are subject to surcharge
Cyprus | 22 November 2017

The Merchant Shipping (Fees and Taxing Provisions) Law 2010 imposes a surcharge on the tonnage tax payable by qualifying vessels registered in countries which appear on the grey or black list of the Paris Memorandum of Understanding. On the basis of the 2016 Paris Memorandum of Understanding annual report, the Department of Merchant Shipping recently determined which flags are included in the relevant grey or black list for the purposes of calculating tonnage tax for 2017.

Department of Merchant Shipping upgraded to deputy ministry
Cyprus | 25 October 2017

Law 123(I)/2017 has upgraded the Department of Merchant Shipping to a deputy ministry under the direction of the newly created post of deputy minister of shipping with effect from March 1 2018. The new Deputy Ministry of Maritime Affairs will assume the Department of Merchant Shipping's powers and responsibilities. This upgrade reflects the importance of the shipping sector in Cyprus and the significance that the government places on its development.

Use of electronic oil record books on board Cyprus-flagged vessels
Cyprus | 20 September 2017

Under the International Convention for the Prevention of Pollution from Ships, only wastewater containing a specified proportion of oil may be discharged directly overboard and all discharges must be recorded in an oil record book. The Department of Merchant Shipping recently issued guidance regarding the use of electronic oil record books on board Cyprus-flagged vessels, which follows the recommendations of the International Maritime Organisation's Marine Environment Protection Committee.

Amendments to International Convention on Standards of Training, Certification and Watchkeeping for Seafarers
Cyprus | 30 August 2017

Amendments to the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers 1978 and Part A of the Seafarers Training, Certification and Watchkeeping Code recently came into force. The amendments apply to Cyprus-flagged vessels, foreign-flagged vessels visiting Cyprus ports and all seafarers employed on board Cyprus-flagged vessels which are subject to the International Code of Safety for Ships using Gases or other Low-Flashpoint Fuels.

Cyprus implements EU regulation on maritime transport emissions
Cyprus | 16 August 2017

The Department of Merchant Shipping recently issued a circular informing owners, managers and representatives of Cyprus-flagged ships of their obligations under EU Regulation 757/2015 on the monitoring, reporting and verification of carbon dioxide (CO2) emissions from maritime transport. Operators of Cyprus-flagged ships must submit a monitoring plan for each of their vessels no later than August 31 2017, indicating the method chosen to monitor and report CO2 emissions.

Implementation of new ballast water standards
Cyprus | 26 July 2017

The Department of Merchant Shipping recently issued a circular to owners, bareboat charterers, managers and representatives of ships flying the Cyprus flag informing them of proposed implementation arrangements for ballast water management systems under the International Convention for the Control and Management of Ships' Ballast Water and Sediments 2004.

New procedures announced for issuing minimum safe manning documents for Cyprus-flagged ships
Cyprus | 19 July 2017

The Department of Merchant Shipping recently announced a change in the procedures for issuing minimum safe manning documents (MSMDs). The new procedures apply from July 1 2017 and all MSMDs issued before that date will cease to be valid by the end of 2017. In order to ensure a smooth transition, applications for new MSMDs should be submitted by September 15 2017 to give the department time to issue new documents before the existing ones expire.

Consolidated instructions and guidelines for private ship security companies
Cyprus | 07 June 2017

The Department of Merchant Shipping recently issued detailed guidelines for private ship security companies that hold an authorisation certificate to provide services under Article 22(1) of the Protection of Cyprus Ships against Acts of Piracy and Other Unlawful Acts Law 2012 or intend to apply for such authorisation. The guidelines cover general instructions, firearms and guidance on the assessment process.

New Merchant Shipping (Marine Equipment) Law enacted
Cyprus | 10 May 2017

The Department of Merchant Shipping recently announced the enactment of the Merchant Shipping (Marine Equipment) Law 2017, which transposes the EU Marine Equipment Directive (2013/52/EC) into national law. The new law covers equipment placed or intended to be placed on board a Cyprus ship, for which Department of Merchant Shipping approval is required regardless of whether the ship is situated in the European Union when the equipment is installed.

New schedule of fees payable under anti-piracy law
Cyprus | 05 April 2017

The Department of Merchant Shipping recently issued an updated schedule of fees payable under Article 86 of the Protection of Cyprus Ships Against Acts of Piracy and other Unlawful Acts Law 2012. In addition, the Protection of Cyprus Ships Against Acts of Piracy (Determination of Fees) Notification 2017 was recently published in the Official Gazette.

Department of Merchant Shipping issues updated list of medical practitioners authorised to carry out examinations and issue certificates
Cyprus | 29 March 2017

The Department of Merchant Shipping recently issued an updated list of medical practitioners authorised to carry out examinations and issue certificates under Article 12 of the Merchant Shipping (Medical Examination of Seafarers and Issue of Certificates) Laws 2000 and 2014 and the Merchant Shipping (Medical Examination of Seafarers and Issue of Certificates) (List of Approved Doctors) Notification 2017.

New procedure for announcing international sanctions against states, individuals and entities
Cyprus | 15 March 2017

The Department of Merchant Shipping recently adopted a new procedure for informing interested parties of UN economic sanctions and EU restrictive measures in the field of merchant shipping. As of the start of 2017, the department has discontinued its previous practice of issuing circulars to bring such measures to the attention of interested parties. Instead, it will communicate them separately in the form of sanctions information notices published on its website.

New merchant shipping law published
Cyprus | 08 March 2017

The Merchant Shipping (Issue and Recognition of Certificates and Marine Training) (Amendment) Law of 2017 recently took effect. The law has transposed the remaining provisions on the minimum level of training of seafarers into national legislation, implemented amendments to the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers and introduced new competency and proficiency certificates.

Guidance ahead of entry into force of ballast water convention
Cyprus | 08 February 2017

The Department of Merchant Shipping recently issued guidance to owners, charterers and managers of Cyprus ships regarding the entry into force of the International Convention for the Control and Management of Ships' Ballast Water and Sediments 2004. Following Cyprus's accession to the convention, all Cyprus-flagged ships to which the convention applies will be required to comply with it when they call at ports or terminals of parties thereto.

Merchant Shipping (Compliance with Flag State Requirements) Order 2016
Cyprus | 01 February 2017

Article 5 of the Merchant Shipping (Compliance with Flag State Requirements) Law 2012 requires the Department of Merchant Shipping to take steps to ensure that ships accepted for registration under the Cyprus flag comply with prescribed international conventions. Article 2(1) of the law provides for the minister of transport, communications and works to determine the relevant conventions and publish a ministerial order listing them. The previous list, which was published in 2012, was recently updated.

Entry into force of amendments to Code of Maritime Labour Convention
Cyprus | 18 January 2017

The Department of Merchant Shipping recently informed owners, operators and managers of Cyprus ships of the adoption, under the tacit acceptance procedure, of the 2014 amendments to the Code of the Maritime Labour Convention 2006. The amendments relate to Standard A2.5 regarding the repatriation of seafarers and Standard A4.2 regarding the shipowner's liability in respect of compensation in the case of a seafarer's death or long-term disability due to occupational injury or illness.

Tonnage tax: maintenance of prescribed levels of EU-flagged vessels
Cyprus | 21 December 2016

The Merchant Shipping Law requires that in order to qualify for the tonnage tax scheme, EU-flagged ships must account for at least a specified minimum percentage of the taxpayer's fleet. The Department of Merchant Shipping (DMS) recently announced the arrangements for its annual review. According to DMS calculations, the global share of EU-flagged ships has decreased in comparison to 2014 for all categories of tonnage tax payer.

Tonnage tax for 2016: countries whose ships are subject to surcharge
Cyprus | 30 November 2016

In order to promote its objective of improving the quality of Cyprus shipping, the Merchant Shipping (Fees and Taxing Provisions) Law of 2010 imposes a surcharge on the tonnage tax payable regarding qualifying vessels registered in countries which appear on the 'grey list' or 'black list' of the Paris Memorandum of Understanding. The Department of Merchant Shipping recently determined the flags included in the relevant grey or black list for the purposes of calculating tonnage tax for 2016.

New procedure for renewal of PSSC certificates
Cyprus | 23 November 2016

The Protection of Cyprus Ships Against Acts of Piracy and Other Unlawful Acts Law 2012 sets out the requirements for the Department of Merchant Shipping (DMS) to issue a private ship security contractor (PSSC) with a certificate confirming that it is allowed to implement security measures on Cyprus ships. With 37 PSSC certificates due to expire before the end of 2017, the DMS recently announced a renewal procedure in order to streamline the process.

Exemption from tax on interest derived from qualifying international shipping activities
Cyprus | 16 November 2016

The Tax Department recently issued a circular clarifying the exemption from tax on interest received by owners, charterers or managers of ships that opt to be taxed under the Merchant Shipping (Fees and Taxing Provisions) Law of 2010. According to the circular, the tonnage tax law exempts from all taxes interest received by or credited to eligible owners, charterers and managers of ships in qualifying bank accounts.

Department of Merchant Shipping invites funding proposals under Motorways of the Sea initiative
Cyprus | 02 November 2016

The Department of Merchant Shipping recently invited owners and operators of ships flying the Cyprus flag to submit funding proposals under the Motorways of the Sea initiative. The initiative aims to promote environmentally friendly, viable, attractive and efficient sea-based transport links and remove bottlenecks in the EU transport system by making shipping a viable alternative to other overcrowded means of transport.

Random inspection of vessels operating in coastal waters
Cyprus | 12 October 2016

The Department of Merchant Shipping recently notified owners and operators of small ferries and passenger boats operating in coastal waters of its intention to carry out an intensive programme of random inspections under the Coastal and Other Passenger Vessels Regulations of 2012. The programme will have a particular emphasis on waste disposal and pollution prevention.

Measures to improve compliance of Cyprus-flagged ships calling at US ports
Cyprus | 28 September 2016

The Department of Merchant Shipping recently issued a circular to owners, operators and managers of Cyprus-flagged ships regarding measures to reverse the increasing trend of Cyprus ships being detained at US ports. The department has noted a continuous increase in the number of Cyprus-flagged ships being detained at US ports, despite its measures and actions to improve compliance.

Introduction of electronic seafarer's application system
Cyprus | 21 September 2016

The Department of Merchant Shipping recently launched its new online electronic seafarer's application system for the submission of Cyprus Seafarers Identification and Sea Service Record Book applications and the recognition of certificates of competency issued by overseas countries. While a transitional period will be in place until the end of 2016, the electronic system will be mandatory from the start of 2017.

Lifting of arms embargoes on Côte d'Ivoire and Liberia
Cyprus | 07 September 2016

The Cyprus Department of Merchant Shipping has announced that, following the lifting of the arms embargoes previously imposed by the United Nations and the European Union on Côte d'Ivoire and Liberia, it is taking steps to repeal the Prohibition Orders which implemented the embargoes. The restrictions set out relating to Côte d'Ivoire and Liberia have been rescinded with immediate effect.

Department of Merchant Shipping issues guidance on concentrated inspection campaigns
Cyprus | 31 August 2016

The Department of Merchant Shipping recently issued circulars to owners, bareboat charterers and managers of ships flying the Cyprus flag to draw their attention to concentrated inspection campaigns that will be carried out by maritime authorities. The department has urged owners, operators and managers to take the appropriate actions required to demonstrate compliance with the campaigns.

Changes to Seafarers' Identification and Sea Service Record Book
Cyprus | 06 July 2016

The Department of Merchant Shipping has announced a number of changes to the format of the Seafarers' Identification and Sea Service Record Book, which is issued to seafarers serving on board Cyprus-flagged ships. The most important of these is the removal of any reference to the seafarer's certificate of maritime competency to avoid misinterpretation during port state control inspections.

New law to enforce international sanctions
Cyprus | 15 June 2016

The Department of Merchant Shipping has issued a circular to owners, operators and managers of Cyprus ships informing them of the enactment of a new law that obliges every person or entity to comply with all sanctions or restrictive measures imposed by UN Security Council or EU resolutions. The law also imposes non-compliance penalties of up to two years' imprisonment or a fine of €100,000 for individuals and a fine of €300,000 for legal entities.

Amendments to port state control regime
Cyprus | 08 June 2016

The government recently amended the Merchant Shipping (Port State Control) Law and issued a revised Merchant Shipping (Port State Control) Notification. The changes incorporate the Maritime Labour Convention into the list of conventions whose implementation is checked by port state control. The authorities have also been advised to adopt the onshore seafarer complaint-handling procedures prescribed in the convention.

Implementation of EU directive on recreational craft and personal watercraft
Cyprus | 25 May 2016

The Department of Merchant Shipping has announced the implementation of EU Directive 2013/53/EC on recreational craft and personal watercraft, which replaced EU Directive 94/25/EU as amended from January 18 2016. The domestic harmonising regulations have been approved by the government law office and are expected to be placed before Parliament for approval this summer.

Reporting formalities for ships calling at Cyprus ports
Cyprus | 18 May 2016

The Department of Merchant Shipping has reissued its guidance to owners and operators of Cyprus-flagged ships and ships calling at ports in Cyprus regarding reporting procedures under the EU Reporting Formalities Directive and the Reporting Formalities for Ships Arriving or Departing from Ports of the Republic Law of 2012, which transposed the directive into domestic law.

Department of Merchant Shipping issues circular on trade restrictions
Cyprus | 11 May 2016

Following the adoption of restrictive measures against Central African Republic, Ivory Coast, North Korea, Somalia, South Sudan and Yemen and the issue of prohibition orders under the Cyprus Ships (Prohibition of Transportation) Laws, the Department of Merchant Shipping has revised its guidance to owners, operators and managers of Cyprus-flagged ships regarding trade restrictions with the countries concerned.

Department of Merchant Shipping circular on restrictions on dealings with Libya
Cyprus | 20 April 2016

The European Union recently adopted new legislative instruments concerning restrictive measures against Libya which consolidate and repeal previously issued EU instruments. The Department of Merchant Shipping has issued a new circular summarising the EU requirements, including a ban on Cyprus ships being used to procure or transport weapons, ammunition or similar goods to or from Libya.

Amending directive on marine equipment transposed into Cyprus law
Cyprus | 13 April 2016

The Department of Merchant Shipping has announced that EU Directive 2015/559/EC, amending EU Directive 96/98/EC on marine equipment, has been transposed into Cyprus law. Equipment can continue to be placed on the market and on board ships until April 30 2018 if it was manufactured in accordance with the procedures for type approval already in force before the adoption of the directive.

Funding of practical onboard training for cadet officers
Cyprus | 06 April 2016

The Department of Merchant Shipping recently announced the detailed conditions of the government-approved scheme to subsidise practical training on board ships for deck and engine cadet officers and the procedure for claiming reimbursement. Eligible employers include owners of Cyprus-flagged vessels, owners of foreign-flagged vessels and charterers or ship managers taxed under the Cyprus tonnage tax system.

Updated list of authorised private ship security contractors published
Cyprus | 23 March 2016

In light of the practical experience gained during its first three years of operation, the Department of Merchant Shipping recently reviewed the Protection of Cyprus Ships Against Acts of Piracy and Other Unlawful Acts Law. This process has been completed and a revised list of authorised private ship security contractors has been published on the department's website.

Updated guide to ship registration published
Cyprus | 09 March 2016

The Department of Merchant Shipping recently issued an updated guide to ship registration, providing comprehensive information on all aspects of registration of vessels under the Cyprus flag. The guide covers the different types of registration available, insurance against civil liability and the conditions of ownership and management, as well as operational requirements (particularly regarding safe manning).

Guidance under anti-piracy law
Cyprus | 03 February 2016

The Protection of Cyprus Ships Against Acts of Piracy and Other Unlawful Acts Law regulates the use of private security contractors on board Cyprus ships. Based on experience of the law to date, the Department of Merchant Shipping recently issued instructions to cancel the authorisation of inactive contractors and to regulate the number of private ship security guards and firearms that contractors can register under the law.

Tonnage tax – maintenance of prescribed levels of EU-flagged vessels
Cyprus | 06 January 2016

The Department of Merchant Shipping recently announced its latest review of the tonnage tax scheme, which will cover companies that entered the tonnage tax system on January 1 2013 or during the preceding 12 months. Any company or group of companies whose EU-flagged share at the time of assessment is less than its reference share and is no greater than 60% may not introduce additional non-EU ships into the tonnage tax system until it increases its EU-flagged share back to at least the level of its reference share.

Tonnage tax: countries whose ships are subject to surcharge
Cyprus | 16 December 2015

To promote its objective of improving the quality of Cyprus shipping, the Merchant Shipping (Fees and Taxing Provisions) Law of 2010 imposes a surcharge on the tonnage tax payable regarding qualifying vessels registered in countries which appear on the 'grey list' or 'black list' of the Paris Memorandum of Understanding. The Department of Merchant Shipping has determined the flags included in the relevant list for the purposes of calculating tonnage tax for 2015.

New requirements for revalidation of certificates of competency
Cyprus | 18 November 2015

The Department of Merchant Shipping recently announced that, in order to implement the 2010 Manila Amendments to the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, applicants seeking revalidation of certificates of competency beyond December 31 2016 must present specific completion of training certificates with their applications.

EU Ship Recycling Regulation implemented
Cyprus | 11 November 2015

The Department of Merchant Shipping has issued a circular to owners, managers and representatives of Cyprus-flagged ships advising them of procedures for implementing the EU Ship Recycling Regulation. For ships to be scrapped, a recognised organisation must issue a ready-for-recycling certificate supported by an inventory of hazardous materials and a ship recycling plan.

Affidavit leading to warrant of arrest
Cyprus | 07 October 2015

The Admiralty Jurisdiction Order, which governs the operation of the Admiralty Court, provides that an affidavit must be filed in accordance with Rules 50 to 54 for the issue of a warrant to arrest property. While Rule 51 requires that the affidavit state the nature of the claim and that the aid of the court is required, Rule 54 gives the court discretion to overlook formal defects.

Salvage claims in Admiralty Court
Cyprus | 09 September 2015

In a recent decision the Cyprus Admiralty Court took the opportunity to reaffirm the main principles of the law on marine salvage. The court reiterated that for salvage to be earned, there must be an element of risk and salvage services must be rendered successfully, on a voluntary basis and for the salvage of property that could constitute a salvage reward, such as a ship or its cargo.

Nairobi Convention set to enter into force
Cyprus | 02 September 2015

The Nairobi International Convention on the Removal of Wrecks will enter into force in Cyprus later this year. As a result, Cyprus-flagged vessels and vessels of 300 gross tonnage or more that call at Cyprus ports or operate within Cyprus's territorial waters must carry a certificate proving that they have insurance in accordance with Article 12 of the convention.

Maritime security for ships flying Cyprus flag
Cyprus | 19 August 2015

The Department of Merchant Shipping has issued consolidated instructions regarding maritime security in respect of ships flying the Cyprus flag. They include a list of classification societies authorised by Cyprus as recognised security organisations with authority to review and approve ship security plans of Cyprus-flagged ships, and detailed provisions on the ship security plan.

Increased liability limits under LLMC
Cyprus | 22 July 2015

​The Department of Merchant Shipping has announced increased liability limits under the Convention on Limitation of Liability for Maritime Claims 1976 and the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001. The new limits are 51% higher than the previous limits across the board and apply in Cyprus and to vessels that fly the Cyprus flag.

Rights of passengers travelling by sea and inland waterway established
Cyprus | 08 July 2015

The Department of Merchant Shipping recently issued a circular on the implementation of EU Regulation 1177/2010 concerning the rights of passengers when travelling by sea and inland waterway. In order to ensure compliance with the regulation, the government has introduced a procedure to impose administrative penalties on carriers that breach its provisions.

Amendments to private ship security company certificates
Cyprus | 01 July 2015

The Department of Merchant Shipping has issued a circular informing stakeholders of changes to the procedures for amendment of certificates issued in accordance with Section 22(1) of the Protection of Cyprus Ships Against Acts of Piracy and Other Unlawful Acts Law of 2012 – in particular, regarding the addition or deletion of ship security guards or firearms.

Increased training requirements under Manila amendments
Cyprus | 20 May 2015

The Department of Merchant Shipping has issued a circular to all owners, operators and masters of Cyprus-flagged ships reminding them of the increased levels of training required for the issue of certificates of competency under the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers as a result of the Manila amendments to the convention.

Department of Merchant Shipping updates list of approved private ship security firms
Cyprus | 01 April 2015

The Department of Merchant Shipping has published an updated list of approved private ship security contractors. Operators of ships intending to use the services of a private security contractor are advised to consult the online list prior to concluding any agreement, as the department will not authorise the employment of any contractor not on its list.

Cyprus accepts wreck removal certificates issued under Nairobi Convention
Cyprus | 25 March 2015

Cyprus has yet to ratify the Nairobi International Convention on the Removal of Wrecks. As a result, the Department of Merchant Shipping will not issue the necessary wreck removal certificates, but it has indicated that it will accept certificates issued by countries that have already ratified the convention to avoid any disruption in the operation and insurance cover of ships flying the Cypriot flag.

Application procedure for support under Motorways of the Sea programme
Cyprus | 18 February 2015

The Department of Merchant Shipping has issued a circular to owners, charterers, operators and managers of Cypriot ships that outlines the European Union's Motorways of the Sea programme and the financial support available under the Connecting Europe Facility, together with details of the application procedure to be followed.

Reminder of effect of consent judgments in in rem proceedings
Cyprus | 11 February 2015

A recent judgment of the Admiralty Court is a useful reminder of the need to prove a claim in in rem proceedings. The judgment shows that skipping proof has potentially devastating effects on a claim, as it excludes the claimant from the priorities procedure and ranks its claim after all in rem judgments.

Ruling offers guidance for third-party intervention in admiralty actions
Cyprus | 21 January 2015

Two applications for Supreme Court reviews of Admiralty Court first-instance judgments were recently filed. The subsequent ruling confirms that the fact that all actions against a vessel are scheduled on the same day does not by itself lead to a conclusion that filing an application to intervene long after the event may be an abuse of court procedure.

EU Marine Equipment Directive transposed into Cyprus law
Cyprus | 14 January 2015

The Department of Merchant Shipping recently announced that the EU Marine Equipment Directive has been transposed into Cyprus law. Equipment can continue to be placed on the market and on board ships until December 2016 if it was manufactured in accordance with type-approval procedures already in force before the directive's adoption.

Carriage of passengers by sea
Cyprus | 07 January 2015

There are two principal EU legislative instruments that govern the carriage of passengers by sea. One provides a uniform regime of liability and insurance and the other safeguards passengers' rights when travelling by sea and inland waterway. In Cyprus, the Department of Merchant Shipping is the competent body designated to enforce the passenger rights regulation.

Loss of use claim in private yacht claims
Cyprus | 17 December 2014

There is no reported case law in Cyprus regarding damages for the loss of use of a non-commercial vessel such as a private pleasure yacht used by its owner for recreational purposes. A recent judgment issued by the Admiralty Court of Cyprus is noteworthy for the judge's comments on the damages to which the claimant would have been entitled had he succeeded, rather than the reasons for rejecting his claim.

Tonnage tax – maintenance of prescribed levels of EU-flagged vessels
Cyprus | 17 December 2014

​The Merchant Shipping (Fees and Taxing Provisions) Law provides that, in order to qualify for the tonnage tax scheme, EU-flagged ships (ships lawfully registered in and flying the flag of an EU member state or any other contracting party to the European Economic Area Agreement) must account for a specified minimum percentage of the taxpayer's fleet.

List of countries with Cyprus-recognised certificates of competency updated
Cyprus | 10 December 2014

The Cyprus Department of Merchant Shipping has updated the list of countries whose certificates of competency are recognised by Cyprus under the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, as amended. The only change from the previous list, which was issued in January 2014, is the addition of Ethiopia.

Endorsements attesting to recognition of non-Cyprus certificates of competency
Cyprus | 12 November 2014

The Department of Merchant Shipping has announced changes to the application procedure and application forms for the issue, renewal and replacement of endorsements attesting the recognition of non-Cyprus certificates of competency under the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, as amended.

Tonnage tax – countries whose ships are subject to surcharge
Cyprus | 01 October 2014

In order to promote its objective of improving the quality of Cyprus shipping, the Merchant Shipping (Fees and Taxing Provisions) Law of 2010 imposes a surcharge on the tonnage tax payable in respect of qualifying vessels registered in countries which appear on the 'grey list' or 'black list' of the Paris Memorandum of Understanding.

Cyprus ship registration
Cyprus | 17 September 2014

Since independence in 1960, Cyprus has recognised the importance and potential of shipping, and government policy has succeeded in attracting shipping entrepreneurs and developing the island into a world-class shipping centre combining both a sovereign flag and a resident shipping industry, as well as one of the world's largest third-party ship management centres.

New marine accidents investigation regime
Cyprus | 23 July 2014

The Marine Accidents Investigation Committee (MAIC) was recently established under the Marine Casualties and Incidents Investigation Law (2012) which implemented EU Directive 2009/18/EC. The MAIC is an independent committee responsible for investigating all types of marine accident (casualties and incidents) and is supported by the Marine Accidents and Incidents Investigation Service.

New agreement on merchant shipping between Cyprus and Georgia
Cyprus | 16 July 2014

The new agreement on merchant shipping between Cyprus and Georgia recently entered into force. Its main provisions tackle issues of equivalent treatment, parallel registration, crew facilities, shipwrecks and accidents and remittance of income.

Passenger manifest procedures for coastal passenger vessels
Cyprus | 25 June 2014

With the summer tourist season beginning, the Cyprus Department of Merchant Shipping has issued a circular reminding operators of coastal passenger vessels of their obligation to submit a proper passenger manifest under the Ferry and Coastal Passenger Vessel Regulations of 2012 and to comply with the procedures set out in the regulations.

Deferral of requirement for security awareness certification
Cyprus | 14 May 2014

The Cyprus Department of Merchant Shipping has announced that where a seafarer on board a Cyprus-flagged ship has not received a security awareness certifications or training on designated security duties, the department will accept compliance with Section 13 of the International Ship and Port Facility Security Code. This is a temporary concession that will expire on January 1 2015.

Are you really interested? Court considers limits to registered shipowners' rights
Cyprus | 09 April 2014

The Supreme Court in its admiralty jurisdiction recently considered an application under Section 30 of the Merchant Shipping (Registration, Sales and Mortgages of Ships) Law for an order prohibiting the respondents from dealing with the two vessels registered in their name and ownership. Section 30 empowers the court to make an order prohibiting any dealing with a ship or any share in a ship.

Department amends list of countries accepted under STCW Convention
Cyprus | 19 February 2014

The Department of Merchant Shipping recently issued an updated list of countries whose certificates of competency are recognised by Cyprus under the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers. The principal change from the previous list, issued by the department in September 2011, is the addition of Georgia, Malaysia and Uruguay.

Department requests submission of annual lists of seafarers
Cyprus | 22 January 2014

The Department of Merchant Shipping has issued a circular to owners, bareboat charterers, managers and representatives of ships flying the Cyprus flag, advising them of their obligation to submit their annual lists of seafarers engaged, discharged and repatriated in 2013. An annual list should be compiled in respect of each vessel and submitted by email to the department by no later than April 1 2014.

Department announces new policy on security awareness training
Cyprus | 15 January 2014

The Department of Merchant Shipping has announced a new policy on security awareness training or security training for seafarers with designated security duties under the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers. The policy sets out the department's position regarding ship security officer certificates of proficiency.

Cyprus re-elected to Council of International Maritime Organisation
Cyprus | 08 January 2014

​Cyprus was recently re-elected to the Council of the International Maritime Organisation, the body responsible for supervising and coordinating the organisation's work. Membership of the council is particularly beneficial, as it allows Cyprus to participate in the decision-making process affecting shipping and underlines the country's credentials as an international maritime power.

Department implements EU directive on marine equipment
Cyprus | 11 December 2013

The Department of Merchant Shipping recently announced the issuance of a new order and notification under the Merchant Shipping (Marine Equipment) Law. The new order and notification transpose the revised EU Marine Equipment Directive into law in Cyprus. The order and notification took effect from November 30 2013.

Department accepts early implementation of safety regulation amendments
Cyprus | 27 November 2013

The International Maritime Organisation Maritime Safety Committee introduced new provisions on the operational testing of free-fall lifeboat release systems in May 2012. They were due to enter into force on January 1 2014, but the committee subsequently recommended their adoption at the earliest possible opportunity. The Cyprus Department of Merchant Shipping has accepted this recommendation.

Interim measures for approval of private ship security contractors
Cyprus | 13 November 2013

Operators of Cyprus ships intending to employ private security contractors must obtain the prior approval of the Department of Merchant Shipping. Companies intending to operate as private security contractors aboard Cyprus ships also require approval from the department. The department must then publish a list of private ship security companies that have been certified as complying with the requirements of the law.

Tonnage tax: maintenance of prescribed levels of EU-flagged vessels
Cyprus | 06 November 2013

In order to qualify for the tonnage tax scheme, ships lawfully registered in and flying the flag of an EU member state or any other contracting party to the European Economic Area Agreement must account for at least a specified minimum percentage of the taxpayer's fleet. The EU-flagged share of each participant in the scheme must be assessed at the third year as from the date of opting to be taxed under the system.

Never too early to intervene: court revisits third-party intervention
Cyprus | 02 October 2013

The Cyprus Admiralty Court recently considered another application for intervention against the proceeds of the sale of a ship, in which the applicant disputed the claim against the ship put forward by the bank. The application was brought under the Admiralty Jurisdiction Order, on the basis that the applicant had an interest in the property sought to be affected by the bank's action.

Department updates list of countries subject to tonnage tax surcharge
Cyprus | 11 September 2013

Under Cyprus law, a surcharge is imposed on the tonnage tax payable in respect of qualifying vessels registered in countries that appear in the grey list or blacklist of the Paris Memorandum of Understanding on Port State Control. The Department of Merchant Shipping recently issued its list of the flags included in the grey list or blacklist for the purposes of calculating tonnage tax for 2013.

Maritime Labour Convention 2006 will enter into force shortly
Cyprus | 31 July 2013

The Department of Merchant Shipping has announced that the Maritime Labour Convention 2006 will enter into force in Cyprus shortly, on the same day as its international entry into force. The convention applies to all ships that are ordinarily engaged in commercial activities, but not to ships engaged in fishing, traditionally constructed ships, warships or ships that navigate exclusively in inland waters.

Court considers application for third-party intervention in admiralty action
Cyprus | 03 July 2013

A recent judgment arising from one of a series of claims being dealt with by the Admiralty Court against the ship AVANTIS II gives further insight into the principles that the court will apply when considering applications for intervention by a third party in admiralty actions. The court stressed that in such an application, it is of utmost importance to identify the applicant's interest and provide clear evidence of its existence.

New circular sets out revised safety equipment guidelines
Cyprus | 26 June 2013

The Department of Merchant Shipping recently published new guidelines on periodic inspection and maintenance of safety equipment. The revised guidelines apply to all Cyprus-registered ships and elaborate on the minimum recommended level of maintenance and inspections for fire protection systems and appliances, stipulating that all relevant equipment must be inspected by a suitably qualified person.