CYPRUS Law and Practice Contributed by: Kyriacos Scordis, Anna Borovska and Constantinos Kazamias, Scordis, Papapetrou & Co LLC
relevant authority, and ultimately share their revenues with the Republic of Cyprus. The EPSC obliges the contractor to comply with the applicable tax laws and regulations of Cyprus and the EU, as a 5% withholding tax on gross income derived from within Cyprus is charged. However, in contrast, no exact tax regime is applicable in relation to oil and gas companies operating in Cyprus. Furthermore, any grade-scale construction projects such as the construction of marinas, golf courses and/or hotel resorts will require an assessment of the building procedures and environmental impact, as they may have a harmful impact on the environment. In such cases, the Town and Country Planning Law (90/1972), as amended, and the more recent Law on the Estimation of Repercussions on the Environment for Specific Construction Work, specify the require- ments for the issuing of certain licences related to town planning and restrictions on foreign entities which are eligible to apply for such licences. 8.8 Environmental, Health and Safety Laws There is no legislation specific to project financing. However, aside from general legislation, such as the Safety and Health at Work Laws (89 (I)/1996), as amended, depending on the specific industry, there may be further regulations regarding the operations and safety requirements specific to that sector – eg, in order to protect the worker and the environment in natural resource projects, the Safety and Health at Work (Safety of Offshore Oil and Gas Operations) Reg- ulations of 2015 (P.I. 424/2015) have been introduced under the Safety and Health at Work Laws of 1996 to (No 2) of 2015 (the “Regulations”). The Regulations lay down minimum requirements for the prevention of major accidents during offshore oil and gas opera- tions and the mitigation of the consequences of such accidents.
In addition, the Law on Environmental Liability with regard to the Prevention and Remedying of Environ- mental Damage (189 (I)/2007), as amended, renders any natural or legal, private or public person who operates or controls the occupational activity or to whom decisive economic power over the technical functioning of such an activity has been delegated by law, (including the holder of a permit or authori- sation for such an activity or the person registering or notifying such an activity) liable for environmental damage caused. According to the law, strict liability is imposed upon the operator, for charges of prevention and remediation of environmental damage caused by any of its registered “occupational activities”. This incorporates “any activity carried out in the course of an economic activity or an undertaking, irrespectively of its private or public, profit or non-profit character”. The competent authority for Cyprus is the Environ- mental Authority of the Ministry for Agriculture, Natu- ral Resources and Environment. A lender financing a project or a guarantor providing security for a project is not liable under environmental legislation unless it is deemed to be an operator.
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