WORLD TRADE GATS/SC/25/Suppl.2
26February 1998
ORGANIZATION(98-0634)
Trade inServices
CYPRUS
Schedule ofSpecific Commitments
Supplement 2
(This isauthentic inEnglish only)
____________________
Thistextreplaces theFinancial Services section contained inpages 8to11ofdocument
GATS/SC/25.GATS/SC/25/Suppl.2
Page2CYPRUS
SCHEDULE OFSPECIFIC COMMITMENTS
Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
7. FINANCIAL SERVICES
1.Itisunderstood thatthisschedule should bereadinconjunction withthehorizontal commitments applicable toallsectors/subsectors submitted byCyprus
initsSchedule ofSpecific Commitments totheGATS andwiththeListofArticle II(MFN) Exemptions.
2.Thefollowing general conditions andqualifications would apply even where nolimitations orconditions arestated intheschedule:
i)Consideration ofnational security andpublic policy objectives;
ii)Thisschedule does notinanywaypertain toservices supplied intheexercise ofgovernment functions. Also, itdoes notaffect measures pertaining
totrade ingoods which mayconstitute inputs toascheduled service orother services. Inaddition, limitations onmarket access ornational treatment
inrespect ofservices which mayconstitute inputs toorbeused tosupply ascheduled service, shall continue toapply.
3.Thelaws andregulations mentioned inthisschedule should notbeconstrued asanexhaustive reference toalllaws, andregulations governing the
financial sector. Thetransfer, forexample, ofinformation containing personal data, bank secret oranybusiness secret isnotallowed. Such transfer is
subject todomestic laws onprotection ofconfidentiality ofinformation ofbanks 'customers. Furthermore, itisnoted thatnon-discriminatory qualitative
measures pertaining totechnical standards, public health andenvironmental considerations, licensing, prudential consideration, professional qualifications
andcompetency requirements have notbeen listed asconditions orlimitations tomarket access andnational treatment.
4.Unregulated financial services andproducts andtheadmission tothemarket ofnewfinancial services orproducts, maybesubject totheexistence orthe
introduction ofaregulatory framework aimed atachieving theobjectives indicated inArticle 2(a)oftheFinancial Services Annex.
5.Duetoexchange controls operative inCyprus:
-residents arenotpermitted topurchase banking services which mayinvolve transfer offunds abroad, while theyarephysically abroad;
-loans tonon-residents/foreigners ornon-resident controlled companies require approval from theCentral Bank;
-acquisition ofsecurities bynon-residents alsorequires permission from theCentral Bank;
-dealings inforeign currency maybecarried outonlythrough banks which have been accorded "Authorized Dealer" status from theCentral Bank.GATS/SC/25/Suppl.2
Page3Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
A. Insurance andinsurance
related services
Direct Insurance
a) LifeInsurance Services 1) Noinsurer canoffer lifeinsurance
services intheRepublic ofCyprus unless
licensed asaninsurer bythe
Superintendent ofInsurance, in
accordance withtheInsurance Companies
Laws.1) None
2) None 2) None
3) Noinsurer canoperate inorfrom within
theRepublic ofCyprus unless so
authorized bytheSuperintendent of
Insurance, inaccordance withthe
Insurance Companies Laws.
Foreign insurance companies canoperate
intheRepublic ofCyprus through the
establishment ofabranch oranagency.
Theforeign insurer must have been
authorized tooperate inhiscountry of
origin before authorized toestablish a
branch oragency.
Participation ofnon-residents ininsurance
companies, incorporated intheRepublic
ofCyprus, requires theprior approval of
theCentral Bank. Theextent offoreign
participation isdetermined onacaseby
casebasis inaccordance witheconomic
needs.3) None
4) Unbound 4) NoneGATS/SC/25/Suppl.2
Page4Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
b) Non-Life Insurance
Services
(CPC 8129 other than
81299)1) Noinsurer canoffer non-life insurance
services (except Marine, Aviation and
Transit) intheRepublic ofCyprus unless
licensed asaninsurer bythe
Superintendent ofInsurance, in
accordance withtheInsurance Companies
Laws.1) None
2) None 2) None
3) Noinsurer canoperate inorfrom within
theRepublic ofCyprus unless so
authorized bytheSuperintendent of
Insurance, inaccordance withthe
Insurance Companies Laws.
Foreign insurance companies canoperate
intheRepublic ofCyprus through the
establishment ofabranch oranagency.
Theforeign insurer must have been
authorized tooperate inhiscountry of
origin before authorized toestablish a
branch oragency.
Participation ofnon-residents ininsurance
companies, incorporated intheRepublic
ofCyprus, requires theprior approval of
theCentral Bank. Theextent offoreign
participation isdetermined onacaseby
casebasis inaccordance witheconomic
needs.3) None
4) Unbound 4) NoneGATS/SC/25/Suppl.2
Page5Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
c) Reinsurance and
retrocession1) Anyforeign reinsurer approved bythe
Superintendent ofInsurance (onprudential
criteria) mayoffer reinsurance or
retrocession services toinsurance
companies incorporated andlicensed in
Cyprus.1) None
2) None except asindicated inthehorizontal
section2) None except asindicated inthehorizontal
section
3) Nocompany canoperate asareinsurer
within theRepublic ofCyprus unless so
authorized bytheSuperintendent of
Insurance.
Investment bynon-residents in
reinsurance companies requires theprior
approval oftheCentral Bank. Theshare
offoreign participation inthecapital of
local reinsurance companies isdetermined
onacase-by-case basis. Currently there
isnolocal reinsurance company.3) None
4) Unbound. Natural persons arenot
authorized toprovide reinsurance
services.4) Unbound. Natural persons arenot
authorized toprovide reinsurance
services.GATS/SC/25/Suppl.2
Page6Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
B. Banking
1. Itisastatutory requirement anditisapplied onanon-discriminatory manner thatbanks offering services intheRepublic ofCyprus must belegal entities.
Legal entities include branches offoreign banks/financial institutions which areregistered inCyprus.
2. Direct orindirect ownership orvoting rights inabank byaperson andhis/her associates maynotexceed 10percentunless withtheprior written approval of
theCentral Bank.
3. Further totheabove, inthethree existing local banks listed inthestock exchange, direct orindirect shareholding oracquisition ofstake intheir capital by
foreign persons isrestricted to0.5percentperindividual ororganization and6.0percentcollectively.
a) Acceptance anddeposits
andother repayable funds
from thepublic
(CPC 81115-81119)1) Unbound/only legal entities licensed by
theCentral Bank mayoffer banking
services intheRepublic ofCyprus.1) Unbound
b) Lending ofalltypes
(CPC 8113)
c) Financial leasing
(CPC 8112)2) Unbound-Residents ofCyprus require
permission from theCentral Bank in
conformity withtheExchange Control
Lawforborrowing inforeign currency or
abroad, forplacing funds abroad orfor
obtaining banking services thatrequire
export offunds.2) Unbound
d) Allpayments andmoney
transmission services
carried outbyfinancial
institutions (CPC 81339)
e) Guarantees and
commitments (CPC 81199)
f) Foreign exchange dealing
(CPC 81333)3) Fornewbanks thefollowing requirements
apply:
a)Alicence isrequired from the
Central Bank forthecarrying outof
banking business. TheCentral Bank
ingranting alicence mayapply an
economic needs test.
b)Branches offoreign banks must be
registered inCyprus under the
Companies Lawandlicensed under
theBanking Law.
4) Unbound3) None once established andlicensed.
4) Unbound. Forbank foreign employees
residence andwork permit isrequired.GATS/SC/25/Suppl.2
Page7Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
C. Securities
Trading forownA/corfor
A/cofCustomers in
transferable securities.
Securities broking
(CPC 81321)1) None except asindicated inthehorizontal
section
2) None except asindicated inthehorizontal
section1) None except asindicated inthehorizontal
section
2) None except asindicated inthehorizontal
section
3) Only members (brokers) oftheCyprus
Stock Exchange canundertake business
pertaining tosecurities brokerage in
Cyprus. Firms acting asbrokers must
onlyemploy individuals whocanactas
brokers provided thattheyare
appropriately licensed. Banks and
Insurance companies maynotundertake
brokerage business. However their
subsidiary brokerage firms maydoso.3) Abrokerage firmmayonlyberegistered
asamember oftheCyprus Stock
Exchange ifithasbeen established and
registered inaccordance withthe
Companies LawofCyprus.
4) Individuals, whether acting alone as
brokers oremployed bybroker firms as
brokers, arerequired tomeet the
licensing criteria forthispurpose.4) None except asindicated inthehorizontal
section