LEGISLATION is being drafted which will remove the responsibility for offshore companies from the Central Bank, sources in the sector told the Cyprus Mail yesterday.
Both the Cyprus International Business Association (CIBA) and the Cyprus International Financial Services Association (CIFCA), which represent the offshore sector on the island, have held meetings recently with Finance Minister Takis Klerides to discuss the issue.
“The issues that are obviously pertinent to the offshore sector are tax and regulation,” CIFCA sources said. “Who will our regulator be after accession to the EU?”
The sources said the offshore companies currently operated under exchange control permits but exchange controls will be abolished when Cyprus joins the EU. “If our permits have to change, it would seem logical that you won’t have the Central Bank regulating one sector of the community and someone else the remainder of the financial services community. They are in the process of putting legislation together that would regulate the sector, and are in the process of appointing a regulator, and the Finance Minister has given the impression that the regulator would not be the Central Bank.”
A CIBA spokesman said he had not heard anything specific, but that with the island’s imminent accession to the EU, “it would be natural for the Central Bank’s role to be effectively reassigned once there is no exchange control here and once there is no distinction between offshore and local companies.
“I understand there are regulations for the Central Bank to become a supervisory body, which is what the real role of every Central Bank in Europe is. They don’t deal with company formations or taxation matter. It is inevitable that due to accession to the EU that this will happen here as well.”
The Finance Minister could not be reached for comment and Central Bank Governor Afxentis Afxentiou said he was not aware of any such proposal.
The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.
