Cyprus economy Update, Bank restrictions last update

We would like to inform you that the Ministry of Finance of the Republic of Cyprus has issued the first order pursuant to the provision of the Law providing imposition of restriction on capital movement of transactions in cases of emergency. This order will be valid for two (2) days, with a possible further extension, and includes the following:

  1. The maximum cash withdrawal, per day, per person from each bank institution, will not exceed the amount of Euro 300 or the equivalent amount in any other currency, irrelevant of how many accounts you have with the bank institution.  The beneficiary can withdraw a smaller amount than EUR 300 and then add the difference to the amount to be withdrawn at a later date.
  2. Encashment of cheques is prohibited;
  3. Any transfer or payment of funds from the Republic of Cyprus  from any account maintained in any bank institution is prohibited unless the transfer falls under the following categories:

Payments through cheques to accounts held in other credit institutions are allowed for up to €9.000 per month per natural person in each credit institution.

(a)  Payment for a transaction which falls into the normal course of business activities of the client and by providing sufficient documentary as follow:

(i)             Payment up to the amount of Euro 25,000 per day per account is not subject to restrictive measures;

Provided that the Committee may ask for information for payments falling within this category.

(ii)           Payment up to the amount of Euro 25,001 to 200,000 are subject to approval by the Committee. Such approval will be obtained within 24 hours from time of request subject to the liquidity of the bank institution.

(iii)         Payment above the amount of Euro 200,001, provided there is a prior approval of the Committee. The request must be addressed by the bank institution itself    

(b) Payments to accounts held abroad for transactions that fall within the normal business activity of the customer upon presentation of justifying documents as follows:

(iv) Payment up to the amount of Euro 5,000 per day per account  is not subject to restrictive measures;

Provided that the Committee may ask for information for payments falling within this category.

(v) Payment up to the amount of Euro 5,001 to 200,000 are subject to approval by the Committee. Such approval will be obtained within 24 hours from time of request subject to the liquidity of the bank institution.

(vi) Payment above the amount of Euro 200,001, provided there is a prior approval of the Committee. The request must be addressed by the bank institution itself    

(vii)  Payment of salaries to employees by providing sufficient documents;

(viii)  Tuition and residence fees up to the amount of Euro 5,000 quarterly is allowed provided such funds are for students studying abroad. In addition such funds must be transferred/sent by a first grade relative of the student who has his residence in the Republic of Cyprus. The relative must procure evidence that he resides in the Republic of Cyprus;

(ix)  Tuition fees of a person studying in educational institutions in Cyprus. Provided that the tuition fess shall be paid only to the beneficiary educational institution, upon submission of the relevant justifying documents. 

(x)  Any payment and transfer of funds from credit and/or debit and/or prepayment cards above the amount of Euro 5,000 per person is prohibited;

(c)  Any bonds cannot be terminated unless the funds will be used for settlement of loans within the same bank institution;

i)   To repay a loan within the same credit institution provided that the loan was granted prior to entry into force the Restrictive measures 2013.

ii)  Fixed term deposits can be terminated in order to create one or more fixed term deposits for the total amount which is equal to the initial deposit and for a term at least equal to the initial term of the terminated deposit.

(d) Upon expiration of any bond, the maximum amount between Euro 5,000 or 10% of the total amount of the bond, are transferred, to a instant access/current account (selected by the depositor) or to a new bond of the depositor to the same bank institution. For the remaining amount the expiration date of the bond will is extended by  one month;

(e)  The amounts transferred from bonds to instant access/current account are subject to the above restrictions applicable to the instant access/current accounts;

(f)   Transfer of any currency in excess of Euro 1,000 per person per trip abroad is restricted. The director of Custom & Excise Department will take all necessary measurement for implementation of the above;

(g)  The order is applicable also for financial transactions, payments, transfers which were not completed before the issuance of the order;

(h) It is prohibited for any banking institution to perform any transaction which will bypass the specific order;

(i)   The order applies to all accounts irrelevant of the currency to which the accounts are connected;

(j)   Any payment and transfer of funds abroad, from credit and/or debit and/or prepayment cards above the amount of Euro 5,000 per person is prohibited;

Finally the below are exempted from the above order:

a)    Payments which are transferred from abroad to the Republic of Cyprus;

b)    Withdrawal with credit and/or debit and/or prepayment cards, issued by a foreign bank institution, from account maintained abroad;

c)    Deposal of cheques issued by an account maintained with  foreign bank institution;

d)    Cash withdrawal by credit institutions from the Cyprus Central Bank

e)    Payments approved by the Committee;

f)     Diplomatic Missions

g)    The Republic of Cyprus;

h)    The Cyprus Central Bank;

George Y. Yiangou LLC one of the biggest and most reliable law firms in Cyprus is able to assist you with your structures providing legal, tax and investment advising services specialising in the areas of Corporate and Commercial Law, Banking and Finance Law, Litigation, International Debt Collection and International Tax Planning, and our services are always provided with the utmost standards and ethics required by our profession.  

We are constantly monitoring the situation and we will provide further updates as any new information becomes available.

 

 

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