The MoU has been signed on behalf of the CBRC by its Chairman Mr LIU Mingkang, who visited Cyprus for this purpose and, on behalf of the Central Bank of Cyprus, by its Governor, Mr Athanasios Orphanides.

The MoU follows the basic principles of cooperation between supervisory authorities, as formulated by the Basel Committee on Banking Supervision. The MoU outlines the general framework of mutual cooperation and exchange of information between the two supervisory authorities, for the purpose of facilitating the performance of their supervisory function as well as for the effective supervision and regulation of credit institutions with a cross border presence, in accordance with the respective national laws and regulations.

Pekris & Theodorou LLC is a Cyprus law firm with Cyprus lawyers and other legal experts on legal matters involving Cyprus law, EU law and international law. The above should be used as a source of general information only. It is not intended to give a definitive statement of the law and is subject to the disclaimer.

Provided that the totalamount of the  levy does not exceed 20% of the total taxable profits of the financial Institution, as these are assessed by the Director of Inland Revenue, the law provides for a 0.095% levy on commercial and cooperative bank deposits.

The Cyprus Parliament also approved an amendment to the draft law deleting the provision that the levy be a temporary one of two years and making it permanent.

Another amendment to the draft bill provides that the Governor of the Central Bank of Cyprus and the Authority for the Supervision and Development of Cooperative Societies have the power to impose a fine up to EUR€100.000 to any financial institution that is deemed to have passed the levy onto customers.

The legislation provides that the bank levy will be imposed on the total amount of deposits (local and cross-border) on 31 December each year. The law defines deposits as ‘an amount of money, expressed in any currency, paid or received on terms under which such amount will be repaid with or without interest, or at a premium, either on demand, or at a fixed date, or under conditions agreed between the payer and the recipient of the amount, but where these terms are not related to the supply of goods, or property, services or to the issuing of shares or debentures’.

However the term deposit excludes interbank deposits between banks operating in Cyprus and deposits from foreign financial institutions.

The Cyprus Parliament also narrowly approved an amendment to the draft law deleting the provision that the levy be a temporary one of two years and making it permanent. Another amendment to the draft bill foresees a 100,000 euro fine on any bank deemed to have passed the tax onto customers.

The above should be used as a source of general information only. It is not intended to give a definitive statement of the law and is subject to the disclaimer.

Orphanides, a member of the European Central Bank’s Governing Council, told the finance committee of parliament, that ‘as an initial target, our aim is to build a fund of around 3.0 percent of GDP.’

It is hoped that this will create an additional safety buffer for the island’s banks.

Orphanides added, ‘our aim is to have this fund ready by September … the creation of a financial stability fund is of primary importance to ensure the credibility of the banking system, irrespective of … public finances which, as we know, are not in the best of state of late.’

Orphanides said the central bank would be drafting regulations for the operation of the fund. He said it would be built on contributions from banks, but did not provide further detail.

Commercial banks said that, in principle, they did not oppose the creation of a financial stability fund.

‘It is however important for our Association to take part in the consultation process for the drafting of any Bill (legislation) in relation to such fund, since we have several core issues as well as other technical provisions we would like to raise,’ the Association of Cyprus Commercial Banks said.

The fund will run independently of plans by the finance ministry to impose a 0.095 percent levy on financial sector deposits.

That levy is expected to generate an estimated 120 million euros for its two-year validity in 2011 and 2012.

The above should be used as a source of general information only. It is not intended to give a definitive statement of the law and is subject to the disclaimer.

This decision affects cheques issued as of the 01.03.2011 and applies equally to government issued cheques following the 01.08.2011.

The decision was taken following the Cyprus Clearing House for cheques, committee`s decision and was taken in the context of promoting the rational use of the cheques as method of payment.

JSC LTB Bank operates in Latvia since 1991 and is a 100% subsidiary of MDM Bank, which is one of the largest privately owned banks of Russia.

The decision of JSC LTB Bank to establish a branch in Cyprus further emphasises Cyprus` international recognition as a reputable European financial centre.

At present, 35 foreign credit institutions operate in Cyprus, either in the form of a subsidiary bank or a branch, from 14 different countries (Austria, Bulgaria, France, Greece, the United Kingdom, Jordan, Ireland, Latvia, Lebanon, Ukraine, Romania, Russia, Tanzania, and Jersey).

The above should be used as a source of general information only. It is not intended to give a definitive statement of the law and is subject to the disclaimer.

This decision affects cheques issued as of the 01.03.2011 and applies equally to government issued cheques following the 01.08.2011.

The decision was taken following the Cyprus Clearing House for cheques, committee`s decision and was taken in the context of promoting the rational use of the cheques as method of payment.