Bank Secrecy In Cyprus

l18Banking is one of the most important sectors of the economy since it influences investment and consumption. Confidentiality is a cornerstone element of an effective and efficient bank system. In Cyprus, bank secrecy is regulated by section 29 (1) of the Banking Law (66 (I)/97).

According to the provisions of section 29(1), it is prohibited for any member of administrative and management body, chief executive, director, manager, officer and employee of a bank, who has access to the records of the bank with regards to the account of any individual customer of that bank, to give, divulge, reveal or use for his/her benefit any information concerning the account of this client.

Moreover, section 29 (1) clarifies that members of administrative and management body, chief executives, directors, managers, officers and employees of a bank are not allowed to reveal or use any information regarding the accounts of bank’s clients during their employment and after the termination of their employment relationship with the bank.

Nevertheless, following the paragraph 29(2) of Law 66(I)/97, bank secrecy does not apply to some particular cases. An outstanding example of lifting bank secrecy is for public interest reasons.

Precisely, the bank secrecy is revoked if:

    • the customer or his/her personal representatives gives or give his/her or their written consent for this particular purpose;

 

    • the customer is declared bankrupt or in case the customer is a company, the company is being wound up;

 

    • legal proceedings are instituted between the bank and the customer or his/her guarantor, regarding the customer’s account;

 

    • the information is given to the police under the provisions of any law or to a public officer who is duly authorised under that law to access that information or to a court during the investigation process or prosecution of a criminal offence under any such law;

 

    • the bank has been served with a garnishee order attaching money to the account of the customer;

 

    • the information is required in the course of his/her duties by a colleague in the employment of the same bank or its holding company or the subsidiary of the bank or its holding company or an auditor or legal representative of the bank;

 

    • the information is required to assess the creditworthiness of a customer in connection with or relating to a bona fide commercial transaction or a prospective commercial transaction so long as the information required is of a general nature and is not related to the details of a customer’s account;

 

    • the provision of the information is necessary for reasons of public interest or for the protection of the interests of the bank.

 

    • the provision of information facilitates the operation of subsections 41(3) and 41(4);

 

    • the information is given according to section 74 of the Covered Bond Law;

 

    • the information is provided to the Cooperative Central Bank by a Cooperative Credit Institution connected with it under the section 25A;

 

  • the information is provided to a system or data exchange mechanism of credit institutions under this Law and directives issued according to Article 41(6);

Confidentiality consists an essential element of the bank-customer relationship. Confidence and credibility are the bases of an effective and efficient banking system. Cyprus legal system protects bank secrecy through the provisions of the Banking Law. In addition to this, breach of bank secrecy and confidentiality lead to substantial penalties. Furthermore, the same level of confidentiality applies to the relationship between the Central Bank of Cyprus and banking institutions operating in the Republic of Cyprus.

Anti Piracy Law In Cyprus

l8Cyprus is one of the most important maritime locations in the world. Precisely, Cyprus is the third biggest maritime fleet in the EU and the tenth biggest fleet in the world. The ideal geographical location of Cyprus between Europe, Asia and Africa and the considerable tax incentives constitute the island a market leader in ship management activities. Shipping is one of the most important sectors of the Cyprus economy. Therefore, maritime security is an essential topic that needs to be addressed. That is to say, it is mandatory for ship-owners to protect their vessels when sailing to dangerous areas.

The Protection of Cyprus Flag Ships from Acts of Piracy and other Unlawful Acts Law (77(I) 2012) provides the necessary legal guidelines for Ship owners, Bareboat Charterers and Ship-managers concerning the measures they need to take when they sail to High-Risk Areas and how they can employ private armed security personnel. In addition, it provides a legal framework concerning the engagement of Private Ship Security Companies (PSSC). It should be mentioned that the Law 77(I)/2012 is applicable internationally.

Security and Protection of the Ships:

The master of the ship and the ship’s operator are obliged to implement the required measures, in accordance with the provisions of SOLAS chapter XI-2, the ISPS Code and Regulation (EC) No. 725/2004 in order to ensure and maintain the security of the vessel and prevent unlawful acts.

According to Section 5(2), the master of the ship, the ship’s personnel and the other individuals on board of the ship may, separately or together, act in order to prevent an unlawful act. In other words, the master of the ship, the ship’s personnel and the other persons on board of the ship, when the ship sails in high-risk areas, may, separately or jointly, use every means so that to prevent an unlawful act that may threaten the security of the ship, or their physical integrity or lives, or may lead to the kidnapping of persons on board the ship.

Duty to Inform the Competent Authority:

The master of the ship and the ship’s operator have the obligation to report immediately to the Competent Authority any unlawful act or attempt to commit an unlawful act and to provide detailed information in regards to that act. In Cyprus, the competent authority is the Department of Merchant Shipping. Furthermore, the operator has to inform and keep updated the relatives of hostages and those injured as a result of an unlawful act.