§ 11:1 Introduction—In general

Cyprus is a former British colony that gained independence in 1960. In 1974, Cyprus was invaded by Turkey and approximately one-third of the country remains under illegal Turkish occupation. All references to Cyprus or the Cyprus government in this chapter refer to the legitimate state and the government of that state.

When Cyprus became independent, the Constitution provided that the laws previously applicable should remain in force in the Republic, until repealed or amended by its laws. Consequently, much of the modern law of Cyprus relating to secured transactions and many other areas closely mirrors English law of the mid-20th century. In 2004, Cyprus became a member of the European Union (EU). Thus, the primary sources of law in Cyprus are now the EU legislation and the laws passed by the Cyprus legislature, the House of Representatives, which are becoming fully harmonized with the acquis communautaire of the EU. Secondary sources include delegated legislation passed by the Council of Ministers and the Common Law system of case law, introduced in Cyprus by the British in 1935, under the doctrine of stare decisis. Cyprus also is a signatory to a large number of international conventions and treaties.

Cyprus is a member of the Commonwealth, the Council of Europe, the International Monetary Fund (IMF), the United Nations (UN), the World Bank, and the World Trade Organization (WTO) and is a founder member of the Organization for Security and Cooperation in Europe. In preparation for EU membership Cyprus made significant structural and economic reforms that transformed its economic landscape and created a modern, open and dynamic business environment. Key legislation related to secured transactions includes:

  1. The Transfer and Mortgage of Immovable Property Law1 (the "Immovable Property Law"), governing the registration of mortgages over immovable property;
  2. The Companies Law, Companies Law (Cap. 113), governing the procedure for the registration of charges created over the assets or undertaking of a company;
  3. The Contract Law (Cap. 149), governing the procedure and requirements for the creation of liens and encumbrances generally and the pledge of share certificates, bills of exchange, promissory notes, and bonds; and
  4. The Financial Collateral Arrangements Law,2 transposing Directive 2002/47/EC on financial collateral arrangements.

Cyprus also is a well-established shipping and ship-management center. Consequently, it has extensive shipping and admiralty legislation. Of special importance is the Merchant Shipping (Registration of Ships, Sales, and Mortgages) Law.3

There is also a legal framework in place4 enabling credit institutions to issue covered bonds in line with Directive 2009/65/EC on Undertakings for Collective Investments in Transferable Securities.

Footnotes

[Section 11:1]

1 Law Number 9 of 1965.

2 Law Number 43(I) of 2004.

3 Law Number 45 of 1963, as amended by Laws Number 32 of 1965, Number 82

of 1968, Number 62 of 1973, Number 102 of 1973, Number 42 of 1979, Number 25 of

1980, Number 14 of 1982, Number 57 of 1986, Number 64 of 1987, Number 28(I) of

1995, Number 37(I) of 1996, Number 138(I) of 2003, Number 169(I) of 2004, and

Number 108(I) of 2005.

4 The Covered Securities Law, Number 130(I) of 2010.

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