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Capital controls in Cyprus

The International Monetary Fund (IMF), European Commission (EC), European Central Bank and Eurozone Finance Ministers have agreed with the Cypriot Government a package of measures for addressing the financial situation in Cyprus.

As part of the measures to reopen banks in Cyprus, the Cypriot authorities have imposed certain capital controls.

An English version of the text of the initial decree introducing capital controls in Cyprus is available from the Cypriot Ministry of Finance.

Implications for UK businesses trading with or inside Cyprus

The capital controls may affect your business if you trade with companies in Cyprus, sell into the Cypriot market, or if you have a Cypriot subsidiary. The way your company is affected will depend on the business that you do, the contracts you have and whether your bank is affected (if it is based in Cyprus). It will also depend on how the controls are implemented and administered in practice.

If you think your business might be affected, you should take steps to be prepared for disruption. You should plan ahead for possible delays to your dealings with Cypriot based firms.

There are provisions in place, subject to certain approvals, to allow for trade payments and to allow Cypriot businesses to pay for imports. You should consider how these apply to your business.

You may wish to contact your Cypriot trading partners to agree a way forward. If you have any concerns, you may wish to speak to your legal adviser.

If you think you may experience cash-flow problems as a result of the disruption, you should have an early conversation with your bank. If you are concerned the disruption may impact your ability to meet tax payments, you should have an early conversation with your tax office, contact HMRC’s Business Payment Support Service or call them on 0845 302 1435.