RESTRICTED
WORLD TRADE S/FIN/W/12/Add.36
27November 1997
ORGANIZATION(97-5264)
Original: English Committee onTrade inFinancial Services
COMMUNICATION FROM THE REPUBLIC OFCYPRUS
Conditional Offer onFinancial Services
Addendum
ThefollowingcommunicationiscirculatedattherequestofCyprustoMembersoftheCommittee
onTrade inFinancial Services.
_______________
1. TheRepublic ofCyprus hereby submits totheCTFS itsconditional offeronFinancial Services.
Thisofferisconditional upon asuccessful conclusion ofthenegotiations oftheCommittee onTrade
inFinancial Services.
2. Cyprusreservestherighttomodify,reduceorwithdrawthisoffer,inwholeorinpart,dependent
ontheresult ofthenegotiations onfinancial services.
3. Cyprus alsoreserves therighttomake technical changes tothisofferandtocorrect anyerrors,
omissions orinaccuracies thatmayhavebeencommitted duetooversight orother reasons.
4. Itisunderstood thatthisoffershould bereadinconjunction withthehorizontal commitments
applicable toallsectors/subsectors submitted byCyprus initsschedule ofSpecific Commitments to
GATS (Document GATS/SC/25, April 1994) andonthelistofArticle II(MFN) exemptions.
5. Thefollowing general conditions andqualifications would apply evenwhere nolimitations
orconditions arestated intheconditional offer:
i) Consideration ofnational security andpublic policy objectives;
ii) Thisofferdoesnotinanywaypertain toservices supplied intheexercise ofgovernment
functions. Also, itdoesnotaffect measures pertaining totrade ingoods which may
constitute inputs toascheduled service orother services. Inaddition, limitations on
market access ornational treatment inrespect ofservices which mayconstitute inputs
toorbeusedtosupply ascheduled service, shallcontinue toapply.
6. Thelawsandregulations mentioned inthisoffer should notbeconstrued asanexhaustive
reference toalllaws, andregulations governing thefinancial sector. Thetransfer, forexample, of
information containing personal data,banksecret oranybusiness secret isnotallowed. Suchtransfer
issubject 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 havenotbeenlisted asconditions orlimitations tomarket
access andnational treatment.S/FIN/W/12/Add.36
Page2CYPRUS
SCHEDULE OFSPECIFIC COMMITMENTS -CONDITIONAL OFFER ONFINANCIAL SERVICES
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.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.
2.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.
A. INSURANCE AND
INSURANCE RELATED
SERVICES
Direct Insurance
a)LifeInsurance Services 1) Noperson orcompany canoperate asan
insurer within theRepublic ofCyprus
unless soauthorized bytheSuperintendent
ofInsurance.1) None
Foreign Insurance companies mayoffer
insurance services through the
establishment ofabranch oragency only.
Inbothcases anauthorization isrequired
inaccordance withterms andconditions
stipulated bytheInsurance Act. The
foreign insurer must have been authorized
tooperate initscountry oforigin before
authorized toestablish abranch or
agency.
2) None 2) NoneS/FIN/W/12/Add.36
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
3) Restricted toinsurance companies
registered inCyprus ansoauthorized by
theSuperintendent ofInsurance, in
accordance withnational regulations.3) None
Investment bynon-residents ininsurance
companies requires theprior approval of
theCentral Bank.
Theshare offoreign participation inthe
capital oflocal insurance companies is
determined onacasebycasebasis in
accordance witheconomic needs.
4) Unbound 4) None
b) Non-Life Insurance
Services (CPC 8129 other
than81299)1) Noperson orcompany canoperate asan
Insurer within theRepublic ofCyprus
unless soauthorized bytheSuperintendent
ofInsurance.1) None
International marine, aviation andtransit
services canbeoffered without any
limitation byanyinsurer, irrespective of
whether authorized ornotinCyprus.
Foreign Insurance companies mayoffer
insurance services through the
establishment ofabranch oragency. In
bothcases anauthorization isrequired in
accordance withterms andconditions
stipulated bytheInsurance Act. The
foreign insurer must have been authorized
tooperate initscountry oforigin before
authorized toestablish abranch or
agency.
2) None 2) NoneS/FIN/W/12/Add.36
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
3) Restricted toinsurance companies
registered inCyprus andsoauthorized by
theSuperintendent ofInsurance, in
accordance withnational regulations.
Investment bynon-residents ininsurance
companies requires theprevious approval
oftheCentral Bank.3) None
4) Unbound 4) None
c) Reinsurance and
retrocession1) Anyforeign reinsurer approved bythe
Superintendent ofInsurance (onprudential
criteria) mayoffer reinsurance or
retrocession services toinsurance
companies incorporated andlicenced 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.S/FIN/W/12/Add.36
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
B. FINANCIAL SERVICES (limited tobanking)
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, direct orindirect shareholding oracquisition ofstake byforeign persons inthecapital ofthethree existing local banks listed inthestock
exchange, isrestricted to0,5percentperindividual and6.0percentcollectively.
BANKING
a) Acceptance anddeposits
andother repayable funds
from thepublic
(CPC 81115-81119)1) Unbound/only legal entities licenced by
theCentral Bank mayoffer banking
services intheRepublic ofCyprus.1) Unbound
b) Lending ofalltypes
(CPC 8113)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
c) Financial leasing
(CPC 8112)
d) Allpayments andmoney
transmission services
carried outbyfinancial
institutions (CPC 81334)3) -Unbound fortheacquisition of
existing local banks
-Fornewbanks thefollowing
requirements apply:3) None once established andlicenced
e) Guarantees and
commitments (CPC 81199)a)Alicence isrequired from the
Central Bank forthecarrying outof
banking business. TheCentral Bank
ingranting alicence mayapply an
economic needs test.S/FIN/W/12/Add.36
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
f) Foreign exchange dealing
(CPC 81333)b)According totheBanking Law,
banks must belegal entities.
c)Branches offoreign banks must be
registered inCyprus under the
Companies Lawandlicenced under
theBanking Law.
4) Unbound 4) Unbound. Forbank foreign employees
residence andwork permit isrequired.
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. Banks andInsurance 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) Only members (brokers) oftheCyprus
Stock Exchange canundertake business
pertaining tosecurities brokerage in
Cyprus.4) None except asindicated inthehorizontal
section