CYPRUS Law and Practice Contributed by: Ioanna Solomou, Stephanos Ayiomamitis, Andria Kouloumi and Lefteris Eleftheriou, Michael Kyprianou & Co LLC
deployment, as failure to do so may result in regula - tory sanctions, financial penalties and potential per - sonal liability. 8.4 Key Disclosure Requirements for AI Use In Cyprus, there are currently no standalone, AI-spe - cific disclosure requirements mandating companies to report on AI use, strategy, governance, risks or incidents in annual reports, sustainability reports or prospectuses. However, such disclosures may arise indirectly under existing EU and national legal frame - works. In particular, the Artificial Intelligence Act, which entered into force in 2024 and will apply on a phased basis, introduces transparency and docu - mentation obligations for certain categories of AI systems (notably high-risk and limited-risk systems), including requirements relating to risk management, human oversight and incident reporting. While these obligations are primarily operational rather than dis - closure-based, they are expected to influence cor - porate reporting practices over time, especially for companies deploying or developing AI at scale.
In the absence of dedicated AI disclosure rules, Cyprus companies must rely on existing regimes. For exam - ple, under the General Data Protection Regulation, organisations are required to disclose certain infor - mation where AI involves the processing of personal data, including transparency obligations towards data subjects and, in some cases, data protection impact assessments. At a national level, Cyprus has adopted a National Artificial Intelligence Strategy (2020), and ongoing initiatives aim to align the country with EU develop - ments in AI governance and oversight. However, as detailed standards and guidance under the AI Act are still evolving, companies in Cyprus will be expected to address any AI-related disclosures through existing legal principles, including transparency, risk manage - ment and good corporate governance, rather than through a dedicated AI reporting framework.
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