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Offshore banks in Cyprus

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Central Bank of Cyprus (CBC) has always been guided in its supervisory role of the recommendations of the Basel Committee on Banking Supervision and the EU directives on banking regulation, following the new developments and are constantly reviewing their supervisory functions, to take into account new developments and changes in circumstances and conditions.

═══════════ Surveillance is carried out through both internal control and external expertise. Control external position entails the provision by banks of an extensive range of periodic results, which cover numerous aspects of banking operations. Any areas of concern, based on the results, quickly marked by the bank and are subject to adjustments. At the site in a timely examination performed to assess the current financial position and stability of the bank and its future prospects. ═══════════ CBC may provide a banking license for the following two types of legal institutions: ═══════════

The bank was founded in Cyprus. The bank was founded in Cyprus can take the form of: (a) branch, while legally independent, wholly or majority of the shares owned lending institution created or Cyprus or abroad, or (b) a joint venture between legally independent institutions run by two or more parent institutions, which are local or foreign, and not all of them must necessarily be lending institutions. ═══════════

Branches of foreign banks that non-EU member. CBC can provide a banking license to a foreign bank, giving him the opportunity to register and manage the office in Cyprus, with the operating entity has no separate legal status but as the main office. The Cyprus branch must be registered in the registry of companies in accordance with paragraph 347 of the Companies Act of Cyprus. Because of its legal status, the Cyprus branch of a foreign bank is not obliged to have its own minimum capital as required for the bank, established in Cyprus. In this regard, for a foreign bank, which was licensed banking CBC to create a branch in Cyprus, through a network of branches, not just through a single department, does not require a separate permit. ═══════════

CBC may also grant permission to establish a representative office of a foreign bank ("RO"), or registered in the EU, or in a third country. This - the office in Cyprus, which promotes the interests of the entity to which it belongs, or to help him, but that does not conduct any banking business or the business of deposit. So it must be made clear that RO did not have a license to conduct banking business from CBC, a simple solution to representation. ═══════════════════════

Statement for the provision of banking licenses ═══════════════════════

The following conditions and guidelines are provided for application for a banking license: IBU, branches of foreign banks or local registered entities are required to be licensed under the terms of the Law on banking business (with time limits), Chapter 124 As a rule, only the branches or subsidiaries of banks, having good international reputation, registered in the countries where taken adequate measures of banking supervision and lender of last resort available to be considered for a license ═══════════ Head Office IBU in case of separation, or the main bank branch in the case, should ensure the appropriate letter of recommendation in support of operations in Cyprus IBU IBU, is expected to operate as fully staffed units and not simply as the main controlling body IBU, as expected, the conditions CBC and the Law of Cyprus or the relevant regulations, but are exempt from compliance with the formal relations of liquidity, to maintain reserves with the CBC and the Ratio of capital. Of IBUs, however, be required to provide on-demand CBC information about their actions, their ability to meet their obligations and their generally strict observance of rules banking practices IBU pay annual dues to the Central Bank of Cyprus in the amount? 20.000 ═══════════

Applications for granting banking licenses or permits RO must be submitted in writing by or on behalf of the applicant in the CBC, along with any documents and information that may require CBC. Application is developed in such a way as to give the CBC information regarding: - business plans, providing insight into the proposed banking operations of the applicant management and organizational structure, including the internal management of the financial position of the banking institution of the applicant / financial institution's procedures for compliance and systems that are used in - The identity of all directors, supervisors and managers of the applicant institution of the bank / financial institution

The procedure for obtaining a license IBU ═══════════

Statements to create the IBU should be submitted to bank management, which, by law, the governing body of the Central Bank of Cyprus. Authority of the Bank, in granting a license banking business, may nominate such terms as it deems necessary. Banking Business Act gives power to the bank's governing bodies have access to any records, accounts or records of any licensed bank. ═══════════ Each application is considered on its own criteria, and, if not created by an international bank in Cyprus, the requirement to provide the necessary information is significantly reduced. Below is information normally required.

Branches If the IBU - branches of foreign banks require the following details: - Financial statements for the last three financial years audited - A short history of applicants, reflecting a gradual and continuous achievement of new and improved levels of financial capability - The degree of future contribution to the improvement, expansion, or a variety of banking and financial services offered - A list of the main controlling shareholders with their respective percentage shares and a short description of their financial prospects - Experience, qualifications, reputation, nationality and address of people who are expected to be responsible for local leadership and management - Feasibility study for the proposed operations IBU, estimated consolidated profit and loss statement, balance sheet and the source and application of capital in the first five years of work - The current geographical distribution of applicants - A copy of the memorandum of association of the applicant and articles of association, translated, if necessary, into English - Organizational chart of the main office of the applicant, together with the profile of executives and senior staff


If this IBU - the local branch of a foreign bank, requires the above information. In addition, the following should be included in the statement: - A full list of proposed shareholders affiliate with their respective percentage shares and a short description of their economic and financial perspective - Draft statute proposed by the branch and the Memorandum of Association Joint Stock Company - A written security agreement and the establishment of the proposed capital fully paid or paid at the time when the branch starts a business - A letter of guarantee from the applicant - A certified copy of the decision of the Board of the parent company to establish IBU in Cyprus

Minimum Requirements ═══════════

Minimum statutory criteria for obtaining a license, which must be met by the applicant that CBC has provided a license banking business, as set out in the legislation on banks in 1997 and subsequently completed, are as follows: "The availability and accuracy of" Directors, managers and directors of the Director, Heads and managers of the bank alleged or perceived separation, respectively, must satisfy the requirements of the CBC is that they - "fit and proper" people to be involved in the provision of banking services. The law prescribes the conditions that CBC should be taken into account, specifying the "suitability and accuracy." These include the integrity of the people, reputation, integrity, diligence, competence, and adequate experience.

The principle of "four eyes" At least two people are required to participate and agree on solutions for effective leadership and management of the banking business. CBC expects in the case of banks established in Cyprus, that interested persons are managers, or they are granted executive powers, and they report directly to the Board of Directors of the bank. Minimum Capital Bank, established in Cyprus, must always have a minimum capital of not less than? 5.1 million or more, if so determined CBC. Department is not obliged to have its own minimum capital as necessary for the bank, established in Cyprus, although the CBC will be welcome the existence of a designated capital. "

Suitability of Supervisors CBC attaches great importance to "suitability and correctness" of alleged bank supervisors (both physical and legal persons), as well as and their financial reputation, with the approval of candidates for supervisors. Suitability is determined by the supervisors, to the extent possible, by means of detailed questionnaires, which must be filled out by interested persons, as well as in the case of Directors, and managers. ═══

The constant demands of Expertise in the field and check on the document after obtaining a license and commencement of operations, licensed banks are subject to monitoring in accordance with CBC Section 26 of the Act. Surveillance is carried out by visiting the bank or branch, as well as verification of information provided by the bank / branch offices in the CBC. Purpose of the visit of the bank are to assess the quality of bank assets, its financial stability, adequacy and quality of its management, its internal control systems, following prudent policies and the implementation of license conditions of the banking business. Providing information to the supervisory authority by submitting a few kinds of reports the offices of the CBC.

Minimum requirements for the reserve in accordance with Section 41 of the Central Bank of Cyprus, 2002, as subsequently amended, the banks, based on Cyprus, or branches of foreign banks are required to maintain minimum reserves with the CBC, according to the requirements of monetary policy. Annual financial statements in accordance Section 24 of the Act, banks are based on Cyprus, or branches of foreign banks are required to prepare annual accounts and submit them, together with the auditor, the CBC within four months after the end of each fiscal year. These financial statements must be checked by auditors in accordance with International Standards on Auditing issued by the International Federation of Accountants, the external auditors appointed by the bank and approved by the CBC.

Participation in the Deposit Protection Scheme Cypriot banks, or branches banks registered in Cyprus with a head office outside the EU are obliged to become parties to the Cyprus deposit protection schemes, except in cases where a bank specifically exempted from this requirement, the decision of the Steering Committee, responsible for the administration of the Scheme. Participation in the Investor Compensation Fund for Clients of Banks All banks, which are based Cyprus, as well as branches banks registered in Cyprus with a head office outside the EU, and intends to offer investment services, are obliged to become members of the Investor Compensation Fund for Clients of Banks, except in cases when the bank has definitely relieved the decision of the Steering Committee, responsible for the administration of the Fund.

Measures to combat money laundering of illegally acquired banks operating in Cyprus are required to have and comply with strict procedures to prevent the use of their services for the legalization of income obtained by illegal means in accordance with the Law on the Prevention and suppression of money laundering of illegally obtained of 1996 (subsequently amended) and the instructions issued in the light of the Act, CBC. Payment of fees is authorized to CBC Section 26 of the Act, to require