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Heavy restrictions on capital movements enter into force — Orbitax Tax News & Alerts

On 27 March 2013, the Cypriot Ministry of Finance adopted a decree relating to the capital export ban and the restrictions on the withdrawal of cash (the Decree). The Decree enters into force immediately for 4 days.

Details of the decree are described as follows:

-   The daily limit on withdrawals is fixed to EUR 300 per person or its equivalent in any foreign currency. This limit is calculated per person, on an aggregate basis (i.e. all accounts per credit institution). The above limit is EUR 1,000 for any money transfer per person and per trip abroad.
-   Any payment without cash is forbidden.
-   Cashing out of checks is forbidden.
-   Payments for commercial transactions falling into the scope of usual business activity of the client are exceptionally allowed, under the condition specific documentation is submitted, as follows:
     
-   daily payments up to EUR 5,000 per account and per person are allowed without any further restriction;
-   payments from EUR 5,001 to EUR 200,000 are allowed only after prior approval of a committee processing the request sent by the credit institution involved, which will be granted within the same day, taking into account the total liquidity available; and
-   any payment above EUR 200,000 is allowed if prior approval of the same committee has already been granted, taking into account the total liquidity available.
-   The termination of term deposits before the term ending date unless the amount of money released is to be used for the payment of loans within the same credit institution.
-   Any financial transaction which has not been completed before the publication of the Decree falls into the scope of its restrictive provisions.
-   The execution of any transaction with or without cash aimed at circumventing the restrictive measures is forbidden without any exception.
-   The Decree applies to any bank account, payment and/or money transfer, in any currency.
-   A special repatriation provision stipulates that any individual or legal entity, resident in the Cypriot Republic is obliged to transfer in the country, within 2 weeks as from their acquisition, any amount of money acquired after the entry into force of the Decree, from exports or sale of assets located within the Cypriot territory.
-   From above restrictive measures, the following cases are excluded:
-   all inbound money transfers (i.e. from abroad to Cyprus);
-   cash withdrawals from foreign bank accounts using a credit or debit cards or prepaid cards issued by foreign credit institutions;
-   payments approved by the above-mentioned committee;
-   money withdrawals from bank accounts with the Central Bank of Cyprus;
-   transactions made by the Cypriot State; and
-   transactions made by the Central Bank of Cyprus.

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