E & G Economides LLC

The gaming industry in Cyprus, like in other jurisdictions, has evolved significantly, transitioning from traditional gaming to advanced digital platforms. With this growth it comes the necessity for strict regulatory frameworks, for ensuring security, fairness, and consumer protection. The legislation of the gambling sector in Cyprus is primarily governed by the Betting Law 37(I)/2019 and is regulating gambling activities in Cyprus. It establishes licensing requirements for betting operators and outlines obligations related to financial operations, transparency, and anti-money laundering (AML). The Importance of Industry Standards Industry standards in Cyprus gaming sector are designed to ensure consistency, quality, and security across gaming platforms. These standards serve several critical purposes: Consumer Protection The Cyprus National Betting Authority (NBA) enforces consumer protection measures to prevent fraudulent gaming practices. Regulations mandate that all licensed gaming operators provide fair and transparent gaming environments, particularly in online gambling, where risks of fraud and unfair gameplay are higher. NBA is also responsible to issue the following licenses for land-based and online betting: the provision of carrying out betting services within licensed premises excluding online betting services and horse racing betting (land-based betting); Τhe provision of electronic betting services excluding slot machines, on-line casino games of chance provided with a direct link and electronic horse racing (online betting). Quality Assurance Gaming operators in Cyprus must adhere to strict quality benchmarks. This includes compliance with technical standards to ensure the stability and performance of gaming systems, which is essential for consumer trust and industry credibility. Accessibility Under European Union (EU) regulations, which Cyprus follows, gaming platforms are encouraged to incorporate accessibility features for players with disabilities. This ensures inclusivity in the gaming experience. On the 2nd of May 2024 Cyprus announced the introduction of the Accessibility of Products and Services Law of 2024, upon the ratification of the EU Accessibility Act and the EU 2019/882 directive on the accessibility requirements for products and services. Key Industry Standards in Gaming Several key standards have been established to address various aspects of the gaming industry: Game Rating Systems The Pan-European Game Information age rating system (PEGI) is a voluntary, self-regulatory system. It was introduced following consultations with the industry and civil society in order to replace national age rating systems with a single European system. Most European Union (EU) Member States use PEGI, and some also have specific legislation.  While Cyprus does not have its own game rating authority, it follows the Pan European Game Information (PEGI) system. PEGI is an age rating system for video games which is used throughout the European Union, for age rating. This provides age and content ratings, ensuring that games are appropriately classified based on their content. Data Protection (GDPR Compliance) Gaming operators in Cyprus must comply with the General Data Protection Regulation (GDPR), which governs the collection, storage, and processing of personal data. The Data Protection Law of 2018 (Law 125(I)/2018) enforces GDPR requirements in Cyprus, ensuring that players personal and financial information is safeguarded. The Role of Regulation The Cyprus gaming industry is subject to a robust regulatory framework aimed at maintaining market integrity and protecting players. Regulatory authorities oversee several key areas: Player Protection Regulations impose strict measures to protect vulnerable groups, particularly minors. These measures include: No, entrance to a licensed premise is not allowed to minors that are either unaccompanied or accompanied by an adult. Mandatory Age Verification; Players must verify their age before accessing gambling platforms. Administrative fines The NBA may impose an administrative fine In case it is found that a person has performed an act, or has omitted to do so, either in breach of a condition in a Class A or B bookmaker’s or authorised agent’s licence, or in breach of the present L.37(I)/2019 69 Law, or in breach of the regulations, or in breach of the Directives issued. Data Security With the rise of online gaming, the security of players and financial information is very significant. The primary legislation governing Cybersecurity in Cyprus is the Security of Networks and Information Systems Law of 2020 (Law 89(I)/2020) (referred to as the “NIS Law”), which enforces the NIS Directive, Directive (EU) 2016/1148. The Digital Security Authority (DSA) oversees the enforcement of this law. The DSA is tasked with developing a national strategy for the security of networks, information systems, and cyber security. This strategy will outline strategic goals and relevant policy and regulatory measures to ensure a high level of security for networks and information systems. Companies designated as operators of essential services or as Competent Authorities fall under the regulation of this law. Gaming operators must implement strict security measures, such as encryption and secure payment processing, to protect player’s data. Conclusion A well-regulated gaming industry is essential for ensuring fairness, consumer protection, and market integrity in Cyprus. Implementing industry standards and regulatory supervision fosters sustainable growth while safeguarding the interest of players. As the gaming sector evolves, Cyprus adapts it’s regulatory framework in order to address adapt into new technologies and emerging risks, ensuring a safe and fair gaming environment for all participants. Author: Xenia Kasapi, LL.B., LL.M., MCIArb Senior Advocate Head of Intellectual Property & Data Protection [email protected] https://www.legal500.com/firms/17733-e-g-economides-llc/c-cyprus/lawyers/2159518-xenia-kasapi

E&G Economides LLC is pleased to announce the promotion of Maria Theocharous and Simoni Pilatsi to Senior Advocates. George Economides, Managing Partner, commented: "Maria and Simoni have shown outstanding leadership, expertise, and commitment. Their promotions are a reflection of their significant contributions and will further strengthen our firm’s position in the Corporate & Commercial sector. We are confident that both will continue to excel and play a pivotal role in the firm’s success." Maria will continue to focus on Corporate & Commercial law, with her specialized expertise in Shipping-related matters. Simoni, as Team Leader within Totalserve, will guide her team’s continued success in Corporate & Commercial law, contributing to the firm’s overall strategic goals.  

A family office serves as a dedicated platform for high-net-worth families to manage their wealth, protect assets, and plan for future generations.By offering services like investment control, succession planning and family governance, it provides financial stability and long-term growth. In simple terms, it is a great option for wealthy families to better control their wealth and manage their private affairs. Why a Cyprus Family Office? With its attractive tax benefits, strategic location and strong legal infrastructure, Cyprus has become a leading destination for establishing a family office. A family office can provide a structured way for high-net-worth families to manage their financial affairs, offering several key advantages including:   Wealth Management and Preservation Ensures effective management of investments, assets, estate planning and taxes, maintaining wealth across generations. Personalised Services Personalised solutions like customised investment strategies, family governance and charitable initiatives aligning with the family’s unique goals and values. Privacy and Confidentiality Consolidating financial activities and promotes discretion, making it ideal for families seeking to maintain a low profile. Succession Planning A family office facilitates smooth wealth transfer and prepares the next generation for leadership positions and decision-making. Centralised Control Provides a hub for managing business interests, luxury assets and philanthropic efforts. Cyprus’s Strategic Advantages Cyprus offers a favourable tax regime, including a corporate tax rate of just 12.5% and access to a wide network of double tax treaties (currently more than 60), no taxation on the distribution or receipt of dividends, as well as on interest payments and royalties, a solid legal framework and a strategic location. Strong Legal Foundation Cyprus’s legal system, based on English common law, provides reliability and familiarity to investors. As an EU member, the country complies to international standards, offering a secure and compliant environment for family offices. Legal Vehıcles for Establishing a Family Office in Cyprus  Cyprus provides various legal options for establishing a family office, such as limited companies, trusts and foundations. Private Limited Company A private limited company (‘Ltd’) is a flexible and efficient choice for establishing a family office in Cyprus due to its flexible structure and limited liability protection. This structure allows family offices to align their operations to meet specific financial goals while maintaining a separate legal entity, which helps safeguard personal and family assets from business liabilities. Additionally, a private limited company can effectively incorporate other favoured investment structures, such as Alternative Investment Funds (‘AIFs’) or Registered Alternative Investment Funds (‘RAIFs’). These funds, which operate under the supervision of the Cyprus Securities and Exchange Commission (‘CySEC’), can be established to pool and manage investments across various asset classes, including private equity, real estate, cryptocurrency and other non-traditional assets. Operating under the umbrella of a private limited company post-incorporation provides a regulated framework, making it an ideal vehicle for managing family wealth effectively. Cyprus International Trust (“CIT”) While not a family office in itself, a CIT, governed under law 69(I)/1992, serves as a powerful legal structure for asset protection and most importantly, it provides great flexibility in succession planning by allowing families to allocate assets according to their preferences, irrespective of Cyprus’s forced heirship laws. This structure can work alongside a family office to safeguard assets and generally align with the family’s broader financial and planning goals. Additionally, it can be established as a Private Trust Company, allowing the family to retain greater control over the administration of the trust. A CIT functions in accordance with the terms specified in its trust deed, with minimal limitations. The trust can hold a wide range of assets and property situated anywhere in the world. For beneficiaries who are not Cyprus residents, income and profits derived from the trust are exempt from Cypriot taxation. CITs are particularly appealing to international families due to their effectiveness in cross-border asset protection and tax efficiency, making them a popular choice for global wealth management. Foundation Governed by Cyprus's Associations and Foundations Law (104(I)/2017), a foundation manages assets dedicated to specific non-profit objectives, such as charitable activities or succession planning. Foundations provide a structured way to protect family wealth, allowing assets to be managed and distributed in line with the founder's wishes. This structure offers continuity and is ideal for preserving wealth across generations while supporting philanthropic objectives. Conclusion Setting up a family office in Cyprus provides a valuable opportunity for affluent families seeking to manage their wealth and personal affairs while benefiting from the country's advantageous legal and tax framework; As an additional benefit, families establishing a presence in Cyprus may also qualify for permanent residency by investing in either real estate, corporations or investment funds for a minimum of EUR 300,000. This incentive further promotes Cyprus’s appeal as a jurisdiction for wealth management, offering both financial advantages and long-term residency options for eligible individuals and their families. Author: Michalis Nikolaou

In recent years, one common word we frequently hear in conversations – whether with professionals, students, or even teenagers – is Artificial Intelligence (“AI”). In reality, AI is a fast-evolving family of technologies that contributes to a wide array of economic, environmental, and societal benefits across the entire spectrum of industries and social activities. What does Artificial Intelligence really mean? What does this term entail? Defining AI is not easy; in fact, there is no generally accepted definition of the concept. It is tricky though because while organizations and experts have tried to define artificial intelligence, there is no consensus on a single definition. Its definition can vary depending on the context, which may have helped AI to be adapted and advance in different scenarios. Definition In the UK, the House of Lords’ Select Committee on AI recently released a report that used this definition: ‘Technologies capable of performing tasks that would otherwise require human intelligence, such as visual perception, speech recognition, and language translation.’ As AI has a major impact on society and as part of its digital strategy, the European Union (EU) wants to regulate artificial intelligence to ensure consistency and protection of public interests regarding health, safety, and other fundamental rights, while supporting innovation. The EU wishes for AI systems to be overseen by people, rather than by automation, to prevent harmful outcomes. For this purpose, the Parliament adopted the Artificial Intelligence Act, Regulation (EU) 2024/1689 (“AI Act”) in March 2024, which was published in the Official Journal of the European Union in July 2024, making it the first comprehensive legal framework for the regulation of AI systems across the EU. The AI Act is a legal framework regulating the development, placing on the market, putting into service, and use of artificial intelligence systems (AI systems) in the Union to ensure protection of public interests regarding health, safety, the environment, and fundamental rights. It sets specific requirements for high-risk systems, obligations for operators of such systems, and transparency rules for certain AI systems. Application This AI Act applies to Union institutions, bodies, offices, and agencies when acting as a provider or deployer of an AI system. Specifically, it applies to: Providers placing on the market or putting into service AI systems or general-purpose AI models in the Union, irrespective of whether they are established within the Union or in a third country, and authorised representatives not established in the Union; Deployers of AI systems established or located within the Union; Importers and distributors of AI systems; Manufacturers placing on the market an AI system. The EU AI Act also enumerates certain exceptions to its material scope. For example, the EU AI Act does not apply to AI systems released under free and open-source licenses unless they are prohibited or classified as high-risk AI systems, or AI systems used for the sole purpose of scientific research and development, and to deployers who are natural persons using AI systems in the course of a purely personal, non-professional activity. To distinguish AI from simpler software systems, the AI Act defines an AI system as "a machine-based system that is designed to operate with varying levels of autonomy and that may exhibit adaptiveness after deployment, and that, for explicit or implicit objectives, infers, from the input it receives, how to generate outputs such as predictions, content, recommendations, or decisions that can influence physical or virtual environments." The definition is broad enough to cover a wide range of data analysis techniques.   Assessment of Risk The AI Act is a legal framework laying down rules on the development and use of AI in the internet market. The new rules establish obligations for providers and users depending on the level of risk from artificial intelligence. While AI systems pose minimal risks, according to the AI Act, this risk needs to be assessed. The AI Act lays down a solid risk methodology to define “high-risk” AI systems that create significant risk to health, safety, or fundamental rights. It prohibits certain AI practices, lays specific requirements for high-risk AI systems, and establishes obligations for the operators concerned, along with transparency rules for lower-risk AI systems. The framework identifies four categories of risk: Unacceptable Risk: The EU AI Act prohibits certain uses of artificial intelligence (AI). These include AI systems that manipulate people's decisions or exploit their vulnerabilities, systems that evaluate or classify people based on their social behavior or personal traits, and systems that predict a person's risk of committing a crime. High Risk: AI systems identified as high-risk include AI technology used in: Critical infrastructures (e.g., transport), that could put the life and health of citizens at risk Educational or vocational training, that may determine access to education and professional course of someone’s life (e.g., scoring of exams) Safety components of products (e.g., AI application in robot-assisted surgery) Employment, management of workers, and access to self-employment (e.g., CV-sorting software for recruitment procedures) Essential private and public services (e.g., credit scoring denying citizens the opportunity to obtain a loan) High-risk AI systems are subject to strict obligations before they can be put on the market: Adequate risk assessment and mitigation systems High quality of the datasets feeding the system to minimize risks and discriminatory outcomes Logging of activity to ensure traceability of results Detailed documentation providing all information necessary on the system and its purpose for authorities to assess its compliance Clear and adequate information to the deployer Appropriate human oversight measures to minimize risk High level of robustness, security, and accuracy Limited Risk: A classification for AI systems or uses that do not fall within the High-Risk category but do pose certain transparency risks and requirements not associated with Minimal Risk systems (such as chatbots). Minimal Risk: A classification for AI systems or uses with minimal impact on individuals and their rights (e.g., spam filters or games), and are largely unregulated by the AI Act directly (and are instead regulated by other EU-wide and national legislation). Governance Member States hold a key role in the application and enforcement of this AI Act. Each Member State should designate at least one notifying authority and at least one market surveillance authority as national competent authorities for the purpose of supervising the application and implementation of this Act. Member States can appoint any kind of public entity (i.e., competition authority, data protection authority, cybersecurity agency) to perform the tasks of the national competent authorities, in accordance with their specific national organizational characteristics and needs. According to Article 77, by 2 November 2024, each Member State shall identify the public authorities or bodies and make a list of them publicly available. Member States shall notify the list to the Commission. On 6 November 2024, in Cyprus, the Deputy Ministry of Research, Innovation, and Digital Policy notified the European Commission of a list of three national public authorities that will supervise or enforce compliance with the obligations under EU law to protect fundamental rights, in accordance with Article 77 of Regulation (EU) 2024/1689 on Artificial Intelligence (AI Act). This action completes the first obligation of Cyprus for the national implementation of the AI Regulation. The list of public authorities of the Republic of Cyprus is as follows: Commissioner for Personal Data Protection Commissioner for Administration and the Protection of Human Rights (Ombudsman) Attorney-General of the Republic It is noted that the authorities included in the list will be granted additional powers under the Regulation to facilitate the exercise of their existing responsibilities in protecting fundamental rights in cases where the use of artificial intelligence (AI) poses high risks to these rights. These powers will take effect from 2 August 2026. Enforcement The regulation will fully apply from 2 August 2026, while prohibitions on high-risk AI practices and other general provisions will take effect earlier, on 2 February 2025. This phased approach reflects the urgency of mitigating risks while allowing stakeholders time to adapt.  

The "Trapped Buyers Law" in Cyprus, formally known as Law N.139(I)/2015, was enacted to address the predicament of buyers who,despite fulfilling their contractual obligations by paying the seller the full purchase price of the property, were unable to obtain the title deed. This issue primarily arose due to outstanding mortgages, unpaid taxes, or other encumbrances on the property created by the seller. The law was designed to protect buyers who found themselves unable to secure a title deed despite having met their contractual responsibilities. It allowed such buyers to apply to the Land Registry of Cyprus to have the property transferred to their name and obtain a title deed without the seller's consent. In order to submit an application as a trapped buyer, the applicant needed to demonstrate that they had paid the full purchase price as stipulated in the sale agreement, that the sale agreement had been duly lodged with the Land Registry of Cyprus, and that the failure to transfer the property was due to circumstances beyond their control. The Land Registry would then assess the application to identify any mortgages or encumbrances affecting the property. If the application satisfied these criteria, the property could be transferred to the buyer's name, and a title deed issued. Since the law's enactment, it has facilitated the resolution of a longstanding issue in the Cyprus real estate market, enabling many trapped buyers to obtain their title deeds. However, on 20th June 2024, the Court of Appeal of Cyprus issued a ruling following an appeal by a banking institution against a District Court decision concerning trapped buyers. The Court of Appeal held that the transfer of the property to the buyer should not proceed if there were mortgages on the property, as this would infringe upon the rights of the bank as creditor. The Court deemed certain provisions of the law unconstitutional, particularly where it sought to protect buyers at the expense of the seller's creditors, thereby recognizing the banks' right to retain mortgages. In light of the Court of Appeal's decision, the authorities have suspended all applications previously submitted to the Land Registry and ceased accepting new applications. It is anticipated that amendments to the law will be required following this ruling. Prospective buyers should seek legal counsel before proceeding with any property purchase in Cyprus to ensure that their rights and interests are fully protected. Author: Cathy Georgiou, LL.B. Senior Advocate