CYPRUS Trends and Developments Contributed by: Marcos Georgiades and Dominique Pelides, Georgiades & Pelides
intention presumably being that such purchases will remain covered by the Sale of Loans Law. However, the Sale of Loans Law contains its own limitations; for example, it does not apply to credit facilities whose governing law is not Cypriot law. Further uncertainty is also created by references, incorporated into the Credit Servicers Law, that the legislation is subject in its entirety to contract law, civil law, criminal law and consumer protec - tion law applicable in Cyprus. We can foresee that the broad scope of this proviso may cause uncertainty to market participants attempting to determine which (if any) principles of general law are intended to override or co-exist with the specific provisions of the new regime. A silver lining is that most of the pre-existing positive elements of the transfer regime, as well as certain useful features incorporated in the amendments to the Sale of Loans Law intro - duced in July 2022, are retained with respect to both sale procedures. These include, among others: • clear statements as to the effect of the transfer on ongoing court, arbitral and other proceedings, which may be continued, filed, and executed against the purchaser or by the purchaser (as the case may be); • a definitive list of the information that must be provided to governmental entities to allow them to process the sale (eg, by re-registering security in the name of the buyer) and (ii) a
statement that required actions by govern - mental authorities are carried out without payment of the usual fees or duties that would otherwise be due; and • a presumption that the announcement regarding conclusion of the sale published in the Official Gazette, accompanied by a statement by an authorised representative of the seller or buyer that such announce - ment relates to the credit facility in question, constitutes prima facie evidence in any court or other legal proceedings of the transfer and the time of transfer of such facility and its related security. Other amendments Other key changes introduced as part of the same legislative package include amendments to the Interest Law, which in essence broaden its scope to apply to a variety of creditors (including credit-acquiring companies and credit purchas - ers), whereas it previously only applied to author - ised credit institutions (ie, banks and branches of banks operating in Cyprus). The law contains a number of prohibitions related to the charging of interest, including prohibitions on capitalising interest more than twice per year, the charging of interest of more than 2% on overdue payments, and the inclusion of unilateral margin increase provisions in credit facilities. The AML Law has also been expanded to include within its scope all entities supervised by the CBC, which would include credit servic - ers and credit purchasers.
152 CHAMBERS.COM
Powered by FlippingBook