M&A can offer many benefits to companies, including:

1. Increased market share: M&A allows companies to expand their market share by acquiring other businesses.
2. Diversification: By acquiring businesses in different industries, companies can diversify their portfolio and reduce their risk.
3. Increased efficiency: M&A can lead to increased efficiency by eliminating duplication of resources and streamlining processes.
4. Access to new markets: M&A can provide companies with access to new markets and customers, which can be difficult to achieve organically.
5. Increased competitiveness: By acquiring a competitor, a company can eliminate competition and gain a competitive advantage.

To ensure a successful M&A transaction, companies must take the following steps:

1. Perform Due Diligence: Before entering an M&A transaction, it is essential to perform due diligence on the target company. This includes reviewing financial statements, legal agreements, and any other relevant documents.
2. Negotiate Terms: Once due diligence is complete, the buyer and seller must negotiate the terms of the transaction, including the purchase price, payment terms, and any contingencies.
3. Obtain Regulatory Approval: In Cyprus, M&A transactions may require regulatory approval from the Competition Protection Commission or the Cyprus Securities and Exchange Commission.
4. Draft Legal Documentation: Once the terms of the transaction are agreed upon, legal documentation must be drafted, including a share purchase agreement, asset purchase agreement, or merger agreement.
5. Closing the Deal: After all the necessary approvals and legal documentation are in place, the transaction can be completed. This includes transferring ownership of shares, assets, or control of the company.

Mergers and acquisitions can be an effective way for companies to achieve growth, diversification, and increased competitiveness. In Cyprus, companies must take into account specific legal and financial considerations when pursuing M&A opportunities. It is essential to work with experienced lawyers and financial advisors who can provide the necessary guidance and support throughout the entire M&A process. If you are considering an M&A transaction, please contact us for more information on how we can help.

The post A Legal and Financial Perspective for Business Growth – Mergers and Acquisitions in Cyprus appeared first on Chambersfield Economides Kranos.

By: Christos G. Georgiou at Chambersfield Economides Kranos

The Cypriot legal and judicial system is currently undergoing one of its greatest reforms in the recent years, with the introduction of new civil procedural rules, laws, regulations and possible structural changes to the Court system itself. The aforementioned changes were deemed necessary in order to modernize the Court System of Cyprus and, inter alia, to integrate and to use the advantages brought about by modern technology and also to bring the Cypriot Courts vis-à-vis with the rise of the digital age.

The abovementioned reform will affect and bring fundamental changes not only to the Courts, the Judges, and the legal professionals, but also to various other stakeholders as well. Thus, many groups, including the House of Representatives (the Cypriot Parliament), are observing and trying to become involved in the said reform.

On that matter, on the 11^th of October 2021, the Plenary Session of the Supreme Court unanimously ruled on its per curiam Opinion that the Law passed by the House of Representatives on the 4^th of February 2021, titled “The Law (Amending) on Court of 2021”, was unconstitutional.[1]

The above Law specifically provided for the parallel filing of all court documents (including pleadings, affidavits, exhibits, etc.) in printed physical and electronic digital forms at the Court Registrars.[2]

Following the passing of the Law, the President of the Republic, based on the powers given to him by Article 140 of the Constitution of the Republic of Cyprus,[3] referenced the Law to the Supreme Court to give its Opinion as to the constitutionality of the Law passed by the Parliament, which affected the operations and workings of the Judiciary.

In its Opinion, the Supreme Court ruled that the law “The Law (Amending) on Court of 2021″ is contrary and inconsistent with Articles 61, 80.2, 163 and 179 of the Constitution[4] and with the principle of the Separation of Powers, a principle which derives from the Constitution itself.

Specifically, the Supreme Court ruled that the Law:

• Constitutes an interference with the judicial power of the Supreme Court by another Power (the Legislative Power),
• Is contrary to the provisions of the Constitution, and
• Violates the Constitution-derived Principle of the Separation of Powers, which ensures the functional independence of each of the three Powers (executive, legislative and judiciary).

This important ruling by the Supreme Court reaffirms the principle of the separation of powers as fundamental to the constitution and the workings of the Cypriot State. Finally, and more importantly, it is also a showcase by the Judiciary to both the Citizens of the Republic of Cyprus and to any other foreign physical person, legal entity or governmental body which looks to them in order to receive justice, that the Cypriot Courts are firmly independent and that the integrity and independence of the Courts will be defended and protected, no matter who tries to violate it.

* The content of this article is valid as at the date of its first publication. It is intended to provide a general guide to the subject-matter and does not constitute legal advice. We recommend that you seek professional advice on your specific matter before acting on any information provided. For further information or advice, please contact Mr. Christos G. Georgiou, Advocate, Mediator & Legal Consultant at the Law Firm CHAMBERSFIELD ECONOMIDES KRANOS, in Limassol Cyprus, # +357 25 356 800 or email at c.georgiou@eklawyers.com, info@eklawyers.com.

[1] https://www.pio.gov.cy/assets/pdf/newsroom/2021/10/Apofasi%20Anotatou-O%20peri%20Dikastirion%20Tropopoiitikos%20Nomos%202021_121021.pdf

[2] https://www.nomoplatform.cy/wp-content/uploads/2021/02/%CE%A0%CF%81%CF%8C%CF%84%CE%B1%CF%83%CE%B7-%CE%9D%CF%8C%CE%BC%CE%BF%CF%85-10.pdf

[3] http://www.cylaw.org/nomoi/enop/ind/syntagma/section-sc1200a230-2366-02c2-2492-690a6cca0027.html

[4] http://www.cylaw.org/nomoi/enop/non-ind/syntagma/full.html

The post Per Curiam Opinion on the separation of Power in Cyprus appeared first on Chambersfield Economides Kranos.

Mediation is an Alternative Dispute Resolution Method (ADR Method) which can be an alternative option for resolving a dispute between two (or more parties), other than through the Courts.

Mediation, like other ADR Methods (such as Arbitration), has advantages over a court process: it is faster, more cost-effective, and involves the confidentiality of the process, as opposed to a trial which is a general procedure open to the public.

In addition, Mediation, has the added advantage of being a more conciliatory and peaceful way of resolving a dispute between two parties, without necessarily causing the two parties to derail and terminate the relationship and/or cooperation of the two parties, as is almost always the case when a dispute leads to Trial or Arbitration.

In terms of its practical application, it is a structured process (regardless of the name), in which two or more parties try to reach an agreement on resolving their dispute voluntarily with the help of a Mediator, as a third, a neutral, independent and impartial party.

This impartial third party is a Certified Mediator, who is selected jointly and with the consent of all parties involved in a dispute.

Ways, the Disputing Parties, can enter into a Mediation process in Cyprus:

Under the current legal regime in Cyprus, there are three ways for the disputing parties to enter into a Mediation process:

1) By a voluntary agreement of the parties when a dispute arises

2)  Through a Mediation Clause in a Contract signed between the parties

3) During a court case, when both parties agree or when one party requests it and the Court deems that this is the best course of action in this particular case (rare application).

Informatively, it should be noted that in other countries, such as Greece and Italy, there is a mandatory pre-trial mediation procedure prior to the adjudication of the civil action, something which is not currently applied in the Cypriot legal system.

The Stages of Mediation:

When and if the disputing parties enter into a Mediation process, then the Mediation process is divided into the following five stages:

1)Preparation:  Where any possible conflict of interest of the Mediator is examined, e.g., if he had previously cooperated with one of the parties of the dispute (as it also happens in an Arbitration process for the selection of an Arbitrator), the acceptance of his appointment, the drafting and signing of the agreement affiliating the dispute to Mediation, the Mediator’s briefing, the appointment of the session, the venue, and the authorizations by the parties.

2) Opening Statements: Both of the Mediator (where he outlines his role, the way the procedure is conducted and the ultimate goal which is the resolve of the dispute) and of the Parties (where each party expresses its position on the dispute being mediated).

3) Investigation: Where separate confidential discussions take place between the Mediator and the parties, questions, investigation of the history of the dispute and the pursuit of interests.

4) Negotiations: Where the parties with the help of the Mediator create options and solutions for the dispute with proposals and dialogue between them.

5) Dispute Settlement Agreement: In case of a successful mediation process, the dispute is closed with the «Mediation Settlement Agreement» signing.

Mediation Settlement Agreement

«The Mediation Settlement Agreement» is probably the most crucial part of Mediation, as the Mediation process (and what has been agreed in it) is not binding until the two parties sign the Mediation Settlement Agreement.

The Mediation Settlement Agreement is drafted up by the Mediator, where what has been agreed is recorded in writing. It is then signed by him, and the parties and a true copy is given to each party of the Mediation. In this case, any party involved can file and register the Mediation Settlement Agreement in Court (as it is the case with an Arbitral Award) and then an Implementing Order is issued, and the Mediation becomes fullybinding.

 Laws and Procedures governing Mediation in Cyprus

The Laws governing Mediation in Cyprus are the following:

Law on Certain Matters of Mediation in Civil Disputes of 2012 (159 (I)/2012), which is the national law that governs the application and the procedure of Mediation in Cyprus, as well as the qualifications that a potential certified Mediator should possess.

Additionally, the above law stipulates the existence of two separate Registers of Mediators which are kept by the Ministry of Justice of the Republic of Cyprus:

Register of Mediators for Commercial Disputes

 Register of Mediators for Civil Disputes other than Commercial Disputes

Directive 2008/52/EC of the European Parliament and of the Council, of 21 May 2008, on certain aspects of mediation on civil and commercial matters, where this European Directive applies in the event of cross-border disputes in civil and commercial matters other than certain rights and obligations which the parties are unable to decide on the basis of the applicable law, and which dispute may be referred to Mediation as an ADR.

The European Code of Conduct for Mediators, which is currently the applicable Code of Conduct for Mediators in Cyprus, as the Cyprus Code of Conduct for Mediators has not yet been created.

Law on Family Disputes Mediation of 2019 (Ν. 62(Ι)/2019), which regulates issues that fall within the scope of Family Law such as Property Disputes, Alimony, and the Use of the Family House. Matters concerning Divorce and Child Custody remain in the exclusive jurisdiction of the Family Court.

Furthermore, informatively, due to the peculiarity of Family Mediation, discussions and actions have been taken to create a third separate Register of Mediators for Family Disputes.

The Future of Mediation in Cyprus: 

In recent years the number of registered Mediators in Cyprus has increased dramatically and the interest of the business and commercial world in finding an ADR Method, both from the Court and from Arbitration, which is not confrontational, has turned the eyes of several stakeholders to Mediation as an economic, speedy confidential and peaceful option to resolve a dispute between 2 two parties.

*Το περιεχόμενο του παρόντος άρθρου έχει ισχύει κατά την ημερομηνία της πρώτης έκδοσής του. Αποσκοπεί στο στα παρέχει μια γενική εισαγωγή και καθοδήγηση στον εν λόγω θέμα και σε καμία περίπτωση δεν συνιστά νομική συμβουλή. Σας συνιστούμε να αναζητήσετε επαγγελματικές συμβουλές σχετικά με το συγκεκριμένο σας θέμα προτού προχωρήσετε σε οποιαδήποτε ενέργεια με γνώμονα τις πληροφορίες που περιέχονται στο πιο άνω κείμενο. Για περισσότερες πληροφορίες ή συμβουλές, παρακαλώ επικοινωνήστε με τον Ko. Χρίστο Γ. Γεωργίου, Δικηγόρο, Διαμεσολαβητή & Νομικό Σύμβουλο στην δικηγορική εταιρεία CHAMBERSFIELD ECONOMIDES KRANOS, στην Λεμεσό, τηλ. +357 25 356 800 ή στα emails c.georgiou@eklawyers.com, info@eklawyers.com.   

* The content of this article is valid as at the date of its first publication. It is intended to provide a general guide to the subject-matter and does not constitute legal advice. We recommend that you seek professional advice on your specific matter before acting on any information provided. For further information or advice, please contact Mr. Christos G. Georgiou, Advocate, Mediator & Legal Consultant at the Law Firm CHAMBERSFIELD ECONOMIDES KRANOS, in Limassol Cyprus, # +357 25 356 800 or email at c.georgiou@eklawyers.com, info@eklawyers.com.

The post Mediation in Cyprus: Legal, Procedural and Practical Application appeared first on Chambersfield Economides Kranos.

GOLD: It’s a well-known fact that most companies in Cyprus are family businesses. Do they tend to have a succession plan in place or not?

Michalis Economides: In my experience, the majority of family businesses do not. I have seen many instances of companies only realizing the need for such a plan at a very late stage, usually when a dispute arises among the members of the next generation and it ends up in court. Such situations have become much more common over the past five years, as more and more young people take over the management of their parents’ companies. When several siblings are involved, things can become very complicated.

GOLD: What kind of advice do you give to clients who recognize that they need to take certain steps to ensure a smooth transition?

M.E.: We tell them that they need to draw up clear rules and guidelines, including the founder’s wishes about how he envisages the future management and strategy of the company and to put everything in writing. Some years ago, I had a case in which, on a Friday, agreement was reached between the company owner and his children – who were already working as managers in various departments – and on the following Monday, the father passed away. It was tragic but he had understood the importance of making sure that everything was clearly stated in writing. Years later, his children still go back to that agreement and its provisions, and that has enabled them to avoid the kind of disputes that arise in other companies that have no such agreements in place. When it was drawn up, we had considered all the possible outcomes,eventualities and scenarios – or at least 99% of them. So my advice to family businesses and Groups of Companies is always to plan ahead, have a corporate and shareholder structure that does not allow any room for interpretation or disputes,and determine separate and specific duties and roles to the members of the younger generation.

GOLD: It’s said that in some countries, 70% of businesses fail to make a successful transition to the 2nd generation. How are things in Cyprus?

M.E.: To be honest, I think it’s even more than 70% in Cyprus. Unfortunately, too many people in family businesses become so emotionally attached to the company – understandably so – that they fail to see the reality that time is running out. But it is essential to plan ahead, make agreements, give solid instructions to the next generation and, in particular, arrange the shareholding in such a way that will not allow any disputes between the siblings. This is an area that can lead to huge problems. When the founder of a business gives his children an equal number of shares, it might seem fair but it can lead to deadlock. If two children are each given 50% of a company, I can tell you with near-certainty that, at some point, there will be problems.

GOLD: So there has to be a distinction made between ownership and management?

M.E.: Exactly. Unfortunately, there is rarely a clear separation of ownership and management in Cyprus. People think that, once they are owners, they have to be involved in the management. There are exceptions but the majority think like this.

GOLD: What happens if the children either don’t want to join the company or they are just not right for the job?

M.E.: If someone has worked hard to create a successful Group of Companies, it is only fair for that business to continue to thrive. If your child is not interested in continuing what you have started, fair enough; you should not push him or her to do something they don’t want to do. Instead, you should appoint a professional manager and simply transfer the company ownership to your children, who will receive an annual dividend and a share of the profits. A more problematic situation arises when the children want to get involved in the business but they are not cut out for it. If the father realises this in advance, he can propose ownership only. If, for emotional reasons, he decides to appoint his children to management positions, time and the financial results will show if they are capable  or not. Huge groups have gone bust because of poor management by younger members of the family.

GOLD: How do you deal with such a situation?

M.E.: I have often told clients that not everyone is meant to be a manager but they don’t always accept this advice. On occasion I’ve proposed that, if it’s a Group of Companies, it should be divided up and each family member can be given one company and be responsible for its management. That, of course, means that the Group is diluted and it is not a solution I like. A much better one is to appoint professional business managers and to try and persuade the siblings to be owners, with no say in the day-to-day management of the company. Whatever the answer, if they don’t want their children to end up fighting each other in court, company owners have to take timely action.

GOLD: Given the changing business scene and the impact of technology, even the most successful established companies need to move with the times, so new blood and next generation managers are essential.

M.E.: Absolutely and we’ve seen many examples of young people coming in, changing the whole system and the company’s operations, resulting in the business doing even better than before. But again, that presupposes qualified and suitable family members or professionals from outside the family. On the negative side, I have noticed that members of the next generation often tend to be risky spenders – they are not the ones who have worked hard and for a long time to create wealth and they are more likely to take risks when it comes to marketing budgets and mergers & acquisitions, which their parents would never have done. When you find a few million euros of available funds, it’s very easy to spend it recklessly.

GOLD: In practical terms, how does a law firm like yours, help in the succession process?

M.E.: What usually happens is that we have numerous meetings over weeks and months – years sometimes – so that everything is thought out and put down in writing. We also advise the family from a business perspective because, during those meetings, we see things that they, for emotional reasons, may not see clearly. It’s much easier for us as outsiders to recognize potential problems in advance so we draw up agreements that clearly state the wishes of the founder/CEO, give clear instructions and identify specific roles and duties for those entering the company. They key is to plan ahead for all eventualities. We try to make family business owners understand that they need to think more as business people than as parents.

GOLD: Are there occasions when you propose solutions that are not accepted by the owner or the next generation? What happens then?

M.E.: Yes, there are such cases. Again, emotional reasons are usually behind the refusal of our proposed solutions but in 99% of such cases, after some months or longer, they will come back to us and admit that we were right and they want to do it that way.

GOLD: Is this a major part of your firm’s work? Is it an area that you see increasing?

M.E.: The answer is yes to both questions. Many company owners and founders are at retiring age and we are seeing more and more cases every month. I definitely expect this area of work to grow considerably as more businesses understand the need to ensure continuity and a smooth succession process.

GOLD: Did you follow in your father’s footsteps and join the family business?

M.E.: No, not at all. My father and mother are not related with the legal industry in any way what so ever, therefore my decision to become a lawyer was a genuine decision to do what I love. I started in the legal profession as an employee, then I became a partner in another firm and eventually took the risk of creating my own legacy.

GOLD: Your use of that word ‘legacy’ makes me want to ask if you imagine facing a succession problem in 20years’ time with your own children!

M.E.: I don’t think there should be a problem because I am already very clear about everything from now and I don’t even have any children yet! But the word ‘legacy’ doesn’t only refer to a business being passed on to the next generation. It’s about the brand and the name and, actually, this is the legacy of the founders of every business. So if my children decide that they want to join the firm, they will start from the bottom as trainees and then employees and they will have to prove that they are capable of managing the company. They won’t be given that responsibility from Day One. But although I have stressed the need for long-term planning, I think that in my case, it’s very early to be having such a discussion!

The post Succession Success appeared first on Chambersfield Economides Kranos.

An article by Mr. Michalis Economides, CEO | Advocate & Legal Consultant of the International Law Firm Chambersfield Economides Kranos |Magazine Publication Capital Today, June 2018

Personal Data – New Legal Framework – Practical Application

Following four years of debate, the (EU) 2016/679 regulation of the European Parliament and Council of the 27th of April 2016, is enforced.
The regulation refers to the protection of individuals, concerning the process of their personal data, as well as, the free exchange of those data (General Regulation for Data Protection).

The regulation of the 27th of April 2016 (having a two-year harmonization period) entered into force on the 25th of May 2018.
The aforementioned regulation replaced the Directive 95/46 / EC, the provisions of which were transferred to the 2001 Personal Data Processing (Protection of Individuals) Law (Law 138 (I) / 2001).

The regulation, unlike the Directive, ensures a high level of harmonization and it is directly applicable to all European Member States.
The protection of natural persons, in regard to the processing of their personal data, it is a fundamental right. The Article 8 (1) of the Charter of Fundamental Rights of the European Union and Article 16 (1) of the treaty for the operation of the European Union (TFEU), specify that every person has the right to protect its personal data.

The worldwide integration and rapid development of the data processing, as well as, the functioning of a global market, have resulted in an unparalleled increase flow of data collection, processing and cross-border exchange, from both private companies and public authorities.

Target

The Regulation aims the uniformity and decisive protection of the privacy, of the citizens of the European Union. This requirement ascended, due to the intense daily increasing trend of personal data exchange, worldwide, which in many cases was subject to violations of the personal data of individuals.

Interpretation of Definitions

According to the provisions of the Regulation, “personal data” is defined as the data and any kind of information that directly or indirectly identify an individual.

This information may relate to his / her private, professional and / or personal life.

The processing of personal data, in accordance with the Article 4 (2) of the Regulation, indicates that any act or series of operations carried out with or without the use of automated means, such as: collecting, recording, organizing, structuring, storing, adapting or modifying, recovering, searching of information, using, disclosing by transmission, distributing or any other form of supplying, associating or combining, restraining, removing or destructing of data.

“Controller” is the natural or legal person, public authority, service or any other body that defines the purposes and manners of processing personal data.

“Processor” is the natural or legal person, public authority, service or any other entity, which process the personal data on behalf of the controller.

The Basic Principles of the Regulation

The basic principle of the Regulation is the harmonization and introduction of a set of data protection standards, which will apply uniformly, throughout the European Union.

Undoubtedly, one of the biggest changes in the regulatory field of personal data protection derives mainly, from the extended jurisdiction of the Regulation, in all the European member states. The Regulation applies to all companies and organizations, which process personal data of people residing in the European Union, irrespective of the company’s registered office location.

Additionally, the Regulation refers to all private and public enterprises, as well as, government authorities that collect, process and generally manage personal data of customers, employees, associates or other natural persons, which are European citizens.

In summary, the new Regulation applies to all businesses that process personal data of European citizens, regardless of their location (inside and outside the European Union).

Moreover, an equally important characteristic of the Regulation is to introduce and strengthen the rights of individuals, whose personal data are being processed.

Additionally, it is notable to mention that the new Regulation introduced new obligations to businesses on the way they process personal data.

In fact, the Regulation is significantly increases the obligations of all entities that manage personal data of European citizens.

Severe amount penalties, according to Article 83 of the Regulation will be imposed to offenders, with fines ranging from €10,000,000 to €20,000,000 or from 2% to 4% of the total annual global turnover of the previous business year of a business (applies to whichever is the higher). The fines will be applied according to the nature of the violation. Hence, the heavier fines will be exercised for breaches concerning the basic principles of the Regulation, related to data processing, data transfer in a third country without the consent of the individual and to the non-compliance with an order or limitation of the data processing, imposed by the supervisory authority.

Decisions, which are issued by the supervising authorities, in the context of the fine exercise power, will be subject to appeal before the Administrative Court on the basis of Article 146 of the Constitution.

Furthermore, another important fact of the Regulation is to strengthen the existing principles governing the processing of personal data, and according to Article 5 of the Regulation, they state that personal data must:

• Be subjected to legitimate and lawful processing with a clear purpose (lawfulness, fairness and transparency).
• Be collected for specified, explicit and legitimate purposes, and, not to be further processed in a manner incompatible with those purposes (purpose limitation).
• Be appropriate, relevant and limited to what is necessary for the purposes for which they are processed (data minimization).
• Be accurate and proceed with all reasonable steps to immediately delete or correct personal data that is inaccurate (accuracy).
• Be stored, only for as long as it is required for the purposes of the processing of personal data and on the basis of the applicable legal requirements of each organization (storage period limitation).
• Be processed in a manner that assures the appropriate security of personal data, including the protection against unauthorized or unlawful processing, loss, destruction or deterioration, using appropriate technical or organizational measures (integrity and confidentiality)
• Entities collecting and processing personal data are responsible and must be able, at all times, to demonstrate compliance with all the principles governing the processing of personal data (accountability).

Rights of individuals

The Regulation based on the structure of the existing legislative framework, strengthens the rights deriving from the 1995 Directive and introduces new rights and obligations.

Indicative is the explicit legislative fortification of the “right to be forgotten”, which is the right that allows the individual to maintain control of his / her personal information, mainly in the cyberspace.

The imperative rights of individuals, whose personal data are being processed, are:

• The right to object at any time, to the processing of their personal data.
• The right to transfer the data that are based on their consent, on receiving or requesting the transfer of their data from one company to another.
• Right to the information
• Right to access the data
• Right to correct the data
• The right to “be forgotten” or delete the personal data
• The right to limit the processing of date, when the accuracy of the data is in dispute or is illegal or when the company no longer needs those data
• The right to object to an automated decision

Business Obligations

The Regulation significantly increases the obligations of businesses towards the protection of the personal data of their customers and employees, without though constraining the collection and processing of data for businesses.

Instead, the process of data will be based on a sequence of restriction series and new obligations for companies concerning:

• The processing of personal data throughout its life cycle, from collection to destruction
• Portability of data to other countries
• Protecting the rights of physical entities
• Security (confidentiality) of personal data
• The notification actions that the business should proceed in the event of a violation

In order for a business to be able to demonstrate its compliance with the provisions of the Regulation, it is required to implement procedures that follow the principles governing the processing of personal data.

In particular, the Regulation imposes a series of new obligations on businesses including:

• Development of the appropriate technical and organizational measures. Business entities must apply all the appropriate technical and organizational measures for the protection of the data (i.e. pseudonym, minimization of data etc.)
• Formation of the processing responsibilities, where joint controllers are in place.
• Incorporation of technological tools, from the manufacturers, which will provide the necessary protection to the user’s personal data during the usage of the product or service that, must be applicable from the creation, design, implementation etc.
• Manufacturer’s responsibility to protect data by definition. Meaning the application of the appropriate technical and organizational measurements, so as to ensure by definition that only the necessary data are being process per purpose.
• Strengthening the conditions for obtaining the consent of the individual. If the consent of the physical person’s data is provided in the context of a written declaration, which also concerns other matters, the request for the consent should be stated clearly with a distinctive way that will separate it from the other subjects, and, in a comprehensible, accessible form with the use of clear and simple wording.
• Acquisition of consent for minors, under the age of 16, by a person who has the parental responsibility of the child, in relation to the services of the Information Society.
• Disclosure and announcement of data breaches. The controller is required to notify the competent supervisory authority, as well as, the natural person who is the owner of the data, without any delay, within 72 hours the breach of the personal data.
• The retain of records of the processing activities.
• An Impact assessment on data protection and prior consultation. Meaning, an assessment should take place specifying the risk, impact and actions, before any process that may involve a high risk.
• The formation of codes of conduct in the business, which will specify how the personal data will be processed.
• The Establishment of data protection certification mechanisms that will demonstrate the Regulation compliance.
• Establishment of a Data Protection Officer. This is a new obligation provided by the Regulation, for persons who process personal data (definition of Data Protection Officer). This person enacts as the depositary of the personal data, and, is responsible, inter alia, for (i) monitoring company’s compliance according to the Regulation (ii) contacting with the competent supervisory authority, (iii) advising the company for any matter in relation to the protection of personal data and (iv) providing all the information to the persons’, whose personal data are being processed. The Data Protection Officer is being defined according to professional qualifications and may be a member of the company’s staff or perform the duties on a service contract notion.

The obligation for appointing a Data Protection Officer is formed when:

• The processing is performed by a public authority
• There is a regular and systematic monitoring of physical persons data, on a large scale
• There is a process of special categories of data, or, the data are relating to criminal convictions and offenses

A “large scale”, according to the Regulation, is when there is a process of a significant amount of data, or for a long duration of time, or when a large number of people are affected, or when the processing covers a large geographical area. Hospitals, banks, educational institutions, insurance companies, telecommunication services, internet search engine platforms etc, have large-scale monitoring.

Prerequisites for a lawful processing of personal data:

According to the Article 6 of the Regulation, in order for a process of personal data to be lawful, at least one of the following conditions should be applied:

• The person has given the consent to process his / her personal data
• The process should be necessary for the performance of a contract
• The process should be a necessity having the legal conformity of the entity or organization for processing the personal data
• The process is necessary for safeguarding the vital interest of a person
• The process is necessary for the fulfillment of a duty that is being performed for the public interest
• The process is necessary for the purposes of the legitimate interests pursued by the organization.

The processing of specific categories of personal data, it is only permitted when there is an explicit consent for the individual, performed within the labor law, social security and protection, or, when there is a vigorous interest.

Consent in accordance to Articles 4 and 7 of the Regulation, is the most common legal framework of personal data processing. The Regulation becomes rigorous under the conditions, which consent is considered as valid. “Valid consent” means any indication of will; free, specific, explicit, and informed of the procedures of personal data, relating to the individual. Silence, pre-filled boxes, or inactivity are not considered as consent. Consent should cover all the processing activities carried out for the same purpose or for the same purposes. When the process includes multiple purposes, consent should be given for all these purposes, separately.

As a result, some methods that were considered as legitimate or gray areas (i.e a predefined box accepting the Privacy Policy) are not currently, according to the Regulation, sufficient to justify the legitimacy of data processing.

As far as concern the children under the age of 16, who fall into the category of sensitive persons, and, therefore are not in the position to cope with consciousness the data processing, their consent in order to be considered valid, should be given by a person who has the parental responsibility of the child.

The harmonization and modification of each organizational structure, which maintains a database has already begun. In summary, the steps for the harmonization of the companies with the new Regulation are as follows:

• Appropriate training and briefing of the staff and customers, in a simple language, of the purposes of processing the data, the length of time that the personal data will be retained and the business identity
• Incorporating in their procedures, the rights of individuals of their data
• Development of the appropriate security measurements and necessary policies for the protection of the information
• Provision of the appropriate technical and organizational measures to ensure the availability of information (Business Continuity Plan)
• An analysis of the consequences that may arise from privacy violations (Data Protection Impact Assessment)
• Privacy protection consideration during the design of products and services
• Informing competent authorities within 72 hours, of the detection of system breaches and data loss
• Appointment of a data protection officer (DPO), as well as, persons who will have access to the data
• Implementation of an action plan that will deal with the confrontation of system breaches and data loss

The major sanctions and the innovations of the existing legal framework of the protection of personal data introduced by the Regulation, specify clearly the objective of the new regulation, which is none other than the creation of a single, stricter and adequate framework for the protection of personal data, which all Member States should apply.

The collection and processing of citizens’ personal data will now be based, on a balanced system governed by the trust between individuals and organizations, which the collection processing data activities will be under the notion of full transparency.

Citizens will have the opportunity to know, which organizations hold and manage their personal data, having the right to submit complain to the supervisory authority, when a violation and / or an incorrect processing of their personal data has been occurred.

The post GDPR – The Beginning of a New Era appeared first on Chambersfield Economides Kranos.

An Article by Michalis Economides, Advocate & Legal Consultant | CEO of Chambersfield Economides Kranos Law firm

Article Publication: Capital Today Magazine July 2018.

The last decade formed a new reality in the Intellectual Property sector, which made its registration essential to any business.

The cyberspace with its continuous information flow, as well as the expansion of most businesses abroad, have already established the new, modern, framework for the intellectual property.

Intellectual Property is defined as the competitive advantage of a private or legal entity and is categorized as follows:

• Industry and Industrial Property that includes inventions – patents, trademarks, industrial designs and intellectual property rights.
• Creators’ Copyright rights. This category includes scientific, musical, literary and artistic works as well as television shows, software, databases, architectural plans, advertising and multimedia.
• Business strategies which include business secrets, confidentiality agreements and know-how.

As a business investment center and member of the European Union, Cyprus provides protection under the Community law while being harmonized with all the standards and requirements of the World Intellectual Property Organization (WIPO) and the European Union Intellectual Property Office (EUIPO). Additionally, the Republic of Cyprus has numerous Community and international conventions and related sanctioning laws, including the Bern Convention on the Protection of Literary and Artistic Works, the Madrid Agreement and Protocol on the Registration of Trademarks at International Level, the Paris Convention on the Protection of Industrial Property etc., and has rightfully earned its position on the world map as one of the most favorable jurisdictions for company formation and intellectual property management.

The competitive advantage gained by the intellectual property protection is of major economic importance for today’s businesses because it can provide instant awareness and / or differentiation in the company’s products and services, while adding value to its reputation. This is exactly why reputation is considered to be a fixed asset of a business.

Another competitive advantage, for reducing the taxation on intangible assets such as intellectual property, is the company’s formation in jurisdictions with a favorable tax regime. Republic of Cyprus is definitely a privileged jurisdiction due to the various double taxation treaties which maintains its favorable tax status with other countries, as well as the low to zero tax retention of dividends.

It is vital to understand the differentiation of the trademark, the business trade name and their significance.

The trademark guarantees the name and / or logo and / or both, while the business trade name basically protects only the name, without fully guaranteeing the owner’s copyright. The trademark is what effectively protects the name of the product or service, the logo, or the combination of both.
Additionally, the company name is not copyrighted if the company does not make the appropriate procedures provided by the legal framework for its registration as a trademark.

Subsequently, in order to be protected by the registration of the company name, it should be registered as a trademark, as defined by the Trademark Law (Chapter 268), combined with the provisions, principles and guidelines deriving from the International Convention of Paris for the Protection of Industrial Property (Laws 63/65 and 66/83).

As a law firm that operates internationally in more than twenty one jurisdictions by providing corporate services, we advise our customers, especially those operating abroad, to register their trademark so that they can prevent any use and / or exploitation, by third parties. Specifically, this process is of upmost importance when it comes to companies investing remarkable funds in branding the services and products they provide.

Besides, the trademark is the one characteristic that differentiates and highlights the innovative ideas and activities of the businesses. For that reason, huge branding, preservation and development budgets are being invested for the product or service concerned, always aiming at the establishment of reputation, which is inseparably interrelated with the profitability of the company.

Furthermore, our highly competitive business environment, having as its main feature the widespread and immediate dissemination of information, indicates the significance of branding, making it a matter of major importance.

In the Republic of Cyprus, the Intellectual and Industrial Property sector of the Department of Company Registrar and Official Receiver, is the one who manages and regulates Intellectual Property issues. This sector includes trademarks, patents, industrial designs, record keeping and intellectual property rights.

In conclusion, the registration of Intellectual Property should not be overlooked; on the contrary, it is an investment and at the same time, an intangible asset, which adds value to the products and / or services of each business. Moreover, it is important that an intellectual property owner monitors and protects his intellectual property rights in a wider range, especially when they operate in other countries, where appropriate actions should be taken to register and protect such intellectual property rights to all required entities.

Based on our experience and due to the fact that not all cases are simple, we recommend that all intellectual property procedures must be supervised by experienced and accredited law firms, which can provide the necessary and appropriate advice throughout the procedure, both at national and international level.

The post Intellectual Property | IP appeared first on Chambersfield Economides Kranos.

An Article by Michalis Economides, Advocate & Legal Consultant | CEO of Chambersfield Economides Kranos Law firm

Article Publication: Capital Today Magazine November 2018.

The business sector is very challenging but also thrilling. The stunning technological development has overturned the balance of businesses across the globe and led to the formation of a new, modern and multidimensional environment that requires immediate action, consistency and confidence from the companies.

GREAT EXPERTISE

As a law firm with physical presence in more than nine countries and activities at an international level, we have noticed (although each case is unique) that entrepreneurs are constantly seeking new business actions. In this way, particular emphasis is placed on finding strategies that aim at achieving a more favorable result and thus the diversification of their company both locally and internationally.

There is no doubt that the main objective of the businesses is to maximize productivity, increase profitability and minimize operating costs. Based on our experience, businesses are primarily considering scenarios and strategies, which have the privilege of delivering a direct result, which will have as an outcome the reduction of operating costs, increase of productivity and therefore an increase in profits.

LEGAL CONSULTANT IS ESSENTIAL

My experience as CEO and Legal Advisor at Chambersfield Economides Kranos, has repeatedly taught me that every strategy and every business case requires thorough and systematic analysis and review. Besides, each case receives influences (positive or negative) from the various changes and fluctuations of both domestic and international markets as they arise from the political, economic, social, technological, environmental and legal framework.

Consequently, it is important to note that choosing the right legal consultant is of upmost importance as along with the entrepreneur, they can create favorable conditions for achieving growth strategies.

BEFORE IT’S TOO LATE…

At this point, it is noteworthy to mention that we have repeatedly observed that, unfortunately, company founders and entrepreneurs addressed to legal counselors at a later stage, when they actually face problems with their businesses. Problems that could have been avoided through proper collaboration with reputable lawyers familiar with the company’s business, how their market operates, the model they follow and the goals they set.

Thus, our advice, regarding the development of a business is to build a stable and uninterrupted cooperation with a well-established, accredited law firm which specializes in corporate, commercial and labor matters and will have knowledge and connections at international level. With this cooperation, each entrepreneur will ensure that strategies are properly implemented and aligned with all the procedures resulting from the legislative framework.

At the same time, with the goals set by businesses in order to increase cash flow, reduce costs and develop the business, strategic actions are proposed on a case-by-case basis. Actions that, if properly executed, can contribute to the further development of the business.

WHAT WE PROPOSE

Specifically, some of the strategic actions that we have already implemented in several businesses and resulted in the development of the businesses, both locally and internationally, are:

• Better management of corporate loans through restructuring, which has increased liquidity and hence expansion, retention and growth strategies
• Company Formation / Re-domicile in a more tax-favorable jurisdiction
• Shareholders Restructuring
• Group Restructuring
• Debt Collection Strategies
• Trading Agreements
• Mergers & Acquisitions
• Franchise Agreements
• Trust Services
• Windup Voluntarily Insolvency
• Investment Management
• Portfolio Management

SAFETY

As I have already mentioned, each case is unique, that is why the close cooperation with a legal consultant is essential and necessary because the consultant’s comprehensive and analytical knowledge of the economic, financial, investment, real estate and technological field assist in finding the appropriate strategic and business model that can be adapted by the business.

As a lawyer and businessman, I believe that each business / company, before implementing any strategy, should have a clear and precise picture of the legislative and business framework governing the country / business sector it is located in and set the necessary legally available safety measures, so as to avoid any negative consequences that may result from misconduct.

The post Key Men Behind Successful Businesses appeared first on Chambersfield Economides Kranos.

The group includes the internationally recognized Law Firm Chambersfield Economides Kranos and GFA Trust, provider of a comprehensive range of corporate services as well as services for the formation of trusts.

The multi-awarded international law firm Chambersfield Economides Kranos was founded by Michalis Economides, a distinguished approved Barrister of the Cyprus Bar Association, as well as Barrister of the United Kingdom and Wales.
Chambersfield Economides Kranos has physical presence in more than nine jurisdictions and undertakes a wide range of complex, integrated, legal, corporate and consulting services on an international level.

Chambersfield Economides Kranos focuses on providing legal and advisory services in civil, political, maritime, commercial, banking, corporate, labor, energy, European, immigration, family, criminal law, liquidation as well as issues resolution of commercial disputes and mediation.

The legal department of Chambersfield Economides Kranos focuses on the understanding of business activity that receives either positive or negative influences from the various changes and fluctuations that occur on the domestic and international markets from the political, economical, social, technological, environmental and legal framework. It implements strategic approaches and develops methodologies that focus primarily on risk mitigation and situation management as they arise from the microeconomic and macroeconomic environment in which each legal entity operates.

Also, the immigration department specializes in naturalization through investment and immigration services. With extensive experience in the field of naturalization through investment, as well as immigration services, it provides solutions tailored made for every individual’s requirements and needs and are fully compliant with the legal provisions of the countries in which they operate.

Additionally, Chambersfield Economides Kranos provides legal and corporate advice with a wide range of specialized services for individuals, legal entities and financial institutions which need an impartial, professional, legal and advisory perspective.

With the company focusing on continually satisfying the customer, Chambersfield Economides Kranos aims to create long-lasting relationships based on the principles of trust, ethos, mutual respect, transparency and understanding.

Simultaneously, the subsidiary of Chambersfield Economides Kranos, GFA Trust, provides a comprehensive range of corporate and fiduciary services in more than twenty-one jurisdictions, especially targeting business development and worldwide expansion.

Among other things, GFA Trust provides services such as company formation and management, nominee & fiduciary services, trusts, re-domicile, mergers and acquisitions, escrow services, bank accounts opening, fund formation and reviewing contracts and agreements.
GFA Trust’s broader activities cover a wide range of services that fall within the international business, financial, administrative, banking and corporate sectors.

CEO’s Story
Michalis Economides is a Legal Advocate and CEO of Chambersfield Economides Kranos and GFA Group. Additionally, he is a licensed Attorney-at-Law of the Cyprus Bar Association and Barrister of the United Kingdom and Wales, as well as Licensed Insolvency Officer of Cyprus, Certified Regulator of the Cyprus Civil and Commercial Registry and member of The Chartered Institute of Arbitrators of England and Wales.

Michalis Economides, as well as the GFA Group’s companies, have won multiple awards and recognitions, with the most recent Michalis international title as “CYPRUS GAMECHANGER OF THE YEAR” by the ACQ5 Law Awards, Chambersfield Economides Kranos honorary award and recognition for its corporate services as well as Michalis Economides honorary title as proposed lawyer in Cyprus by the Global Law Experts Network, Honorary Recognition for Chambersfield Economides Kranos by Advisory Excellence with the award of the «Full Service Law Expert Firm in Cyprus 2018», Leading Firm 2018 by «Legal500» and Chambersfield Economides Kranos’ award from International Advisory Experts as a «Full Service Law Firm in Cyprus» for the year 2018.

The post Multi-awarded International Law Firm appeared first on Chambersfield Economides Kranos.

Article Publication: Forbes Magazine April 2019

Our era is characterized by intense economic, political, social fluctuations, technological changes and complex legal conditions, which, combined with the companies’ activities in an internationalized and fully legislated environment, make the Legal Advisor an important key partner when conducting business.

The Legal Advisor, due to its specialized knowledge of the legal framework, is the most suitable partner, who meets the requirements to provide professional consulting services to the entrepreneurs.

Besides, it is no coincidence that several modern companies cooperate with law firms on a yearly basis to provide legal and advisory services, covering their entire activities range and their legal relationships with customers as well as their employees.

The importance of a Legal Advisor for the businesses is essential, especially in matters such as business’ strategic actions mainly aimed at reducing and minimizing the risks, increasing the activities as well as improving their management and operation.

The Legal Advisor in association with the entrepreneur can design and create the appropriate development conditions by implementing strategies intended to achieve the set goals.

For example, in many cases, our company has been called upon to advise and undertake the formation of strategic prerequisites for:

• Optimizing the company’s organizational structure
• Establishment of subsidiaries in more favorable jurisdictions
• Creating effective strategies for collecting outstanding amounts
• Creating strategies including corporate loan restructuring, for a more efficient management
• Drafting new trade agreements and exploiting business opportunities
• Forming franchise
• Evaluation of investments for further expansion of the existing portfolio as well as liquidation of businesses that harm and negatively affect the viability of the business and significantly increase operating expenses
• Generating strategies for improving asset performance and utilization
• Intellectual Property registration which is considered an intangible asset
• Drafting manuals for actions and procedures to be followed within the company in order to harmonize the business in accordance with:

*  The AML (Anti-Money Laundering) guidelines to prevent and combat money laundering,

*  The guidelines of the European regulation concerning the protection of personal data of European citizens in a global scale. (GDPR)

*  Τhe legal framework governing the jurisdictions in which the companies operate (Legal Audit)

My personal viewpoint is that all strategies of modern businesses must be thoroughly studied and after the proper legal guidance, to be adopted. This is mainly because the corporate and legal framework cannot be easily understood because of specific conceptual terms involved.Every transaction, agreement and operation is considered to follow the legislative framework while the legal advice ensures complete harmonization.

As a lawyer and founder of the international law firm Chambersfield Economides Kranos, I therefore advise entrepreneurs to establish a systematic partnership with a well-established law firm which specializes in corporate, commercial and labor law, has the knowledge and experience in the business, financial and investment sectors and be distinguished and well-established in the domestic and international market.

The post Legal Advisors & Businesses appeared first on Chambersfield Economides Kranos.

It will also ensure consistency in the application of such laws across all EU Member States.

by Michael Economides, CEO, Chambersfield Economides Kranos | Gold Magazine, October 2017, issue 79

History

The 1st Anti-Money Laundering Directive (AMLD) was enacted in 1991 and primarily concerned drug-related offenses, initiating monitoring requirements that financial institutions had to adhere to, such as reporting all suspicious transactions.

In 2001, the 1st AMLD was replaced by the 2nd AMLD, which mainly harmonized the framework of the European Union with that of the Financial Action Task Force (FATF).

In 2005, the 3rd AMLD came into force, extending the Anti-Money Laundering (AML) coverage, in connection with certain businesses and professions, such as accounting and legal services, as well as establishing a risk- based method applicable to customers (due diligence).

Additionally, the 3rd AMLD introduced the notion of simplified due diligence (SDD) and enhanced due diligence (EDD).

More recently, terrorist incidents and the leaking of the so-called ‘Panama Papers’ indicated the need for new, stricter regulations in order to prevent tax fraud, money laundering and terrorist financing.

The main aim is to safeguard the financial systems of member states from abuse: the releasing of illegitimate funds laundered via business entities that end up committing severe criminal offences, with harmful consequences for society as a whole. In fact, the European Commission has taken up the fight against tax avoidance, money laundering and terrorism finance, very seriously and, in 2015, the EU proceeded with the introduction of the most comprehensive AML legislation in Europe, with a two-year implementation period for the member states.

The 4th AML Directive (AMLD4) applies to a diversified number of businesses (referred to as “obliged entities”) which, regardless of their size and business volume, are conducting financial transactions.

The main scope of AMLD4 is to further intensify the ownership transparency of firms, by strengthening standard practices:

Know Your Customer (KYC), Customer Due Diligence (CDD) and Politically Exposed Persons (PEP’s). Basically, AMLD4 will be implemented in many types of businesses, from financial institutions to gaming companies, real estate agents and traders, when proceeding with transactions in cash form exceeding €10,000.

In addition, AMLD4 introduces the prerequisite of a significant requirement for member states: the establishment of national registers of the beneficial owners of companies and business-related trusts, which will be interconnected, so as to achieve and enhance collaboration between the member states and local competent authorities. Law firms and banking institutions, as well as individuals or entities with a proven legitimate interest, will have access to the new central registers.

In summary, through AMLD4, the European Union is introducing strict regulation for tackling money laundering and terrorism financing, so as to safeguard its financial system from being used fraudulently.

Key Changes

The key changes introduced by AMLD4 may be summarized as follows:

• Further enhancement of Customer Due Diligence (CDD). AMLD4 specifies that only through the provision of adequate documentation and risk analysis may simplified CDD be applied.
• Additional emphasis is placed on the concept of Ultimate Beneficial Ownership (UBO), which, under Article 3 (6) of AMLD4, means “any natural person who ultimately owns or controls a company, or who holds more than 25% of the issued share capital”.

As per the new provisions, company ownership can no longer be anonymous and shareholders’ information should be public.

Legal entities and individuals should hold sufficient, accurate, up-to-date data regarding the UBO and the information is to be available at any time, upon the request of the responsible authorities. Moreover, the same practice applies to business trusts, trustees and beneficiaries.

• A more detailed definition of a Politically Exposed Person (PEP) is introduced. The Directive expanded its coverage by including national PEPs, not just foreigners, as high-risk customers due to exposure through their public position. Additionally, the Directive includes “family members” and close associates, as well.
• According to AMLD4, PEPs are under a 12th month “surveillance period” that may be prolonged and should be periodically evaluated as per the sanction lists of each business sector.
• The cash payment threshold has been reduced to €10,000 from €15,000 and could be set even lower on a national level.
• Occasional transactions – referred to as any dealings outside the scope of a regular business relationship – of €15,000 euro and more must also be monitored.
• E-Money products are regulated for the first time under AMLD4.
• AMLD4 integrates the entire gambling sector, not just the casino industry as per previous Directives.

In addition, the 4th AML Directive prescribes that “obliged entities” should review and verify at all stages Customer Due Diligence (CDD) by adapting a risk-based approach and undertaking ongoing monitoring, so as to specify the degree of risk through, inter alia, KYC assessments, and thus proceed accordingly, either by accepting the transaction or reporting it to the Financial Intelligence Unit (FIU) as suspicious.

Know your Customer | (KYC) and the Risk-Based Approach

The Know Your Customer (KYC) assessment responds to questions concerning the origin of the money in a transaction, the reason for the transaction, the intention and nature of the transaction, as well as the engaging parties.

As far as the risk-based approach in AMLD4 is concerned, it has been observed that it now has a wider coverage, describing risk assessment and CDD in a more detailed and descriptive way. Business owners must perform their own evidence-based decision making, referred to in the Directive as a “holistic risk-based approach”, so as to identify any risk of money laundering and financing of terrorism, depending on the nature and activities of their business. Basically, business owners are obliged to be constantly up to date and to take into consideration all the

facts associated with a customer’s profile and origin, cash flow and annual turnover, jurisdiction and/or geographical area, services, products, business deals and/or distribution channels and methods.

Making the Transition

The changes that AMLD4 brings to business operations are significant and businesses have immense challenges to overcome.

However, AMLD4 has made breakthrough advances as regards the approach to the control, monitoring and prevention of money laundering and terrorism financing.

First – and most importantly in my opinion – businesses need to thoroughly educate their personnel and implement control procedures through compliance checklists, so as to ensure that they are conforming to all required specifications, policies, standards and regulations.

Secondly, firms need to fully comprehend AMLD4 and its requirements, so as to be able to identify the risk analysis procedures, specify the methodology and structure to be followed, establish and apply control mechanisms and checklists for an up-to-date CDD, and formulate the procedures for reassessing existing clients and assessing new ones.

In summary, the impact of AMLD4 on businesses goes way beyond affecting resources and mostly concerns the application of risk management, comprehending and blueprinting their current operations so as to set up processes that constantly comply with legislation and the regulations of this Directive and others that will follow.

The businesses and corporations to which AMLD4 is applicable are obliged to appoint professional compliance officers and invest in their ongoing education. Most importantly, such businesses and corporations may also outsource such significant tasks to third party professional entities, i.e. law firms, for ongoing support in compliance, training of their in-house personnel and providing an up-to-date overview of their AML policies and practices.

The post 4th EU Anti-Money Laundering Directive appeared first on Chambersfield Economides Kranos.