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Cyprus Implements Advanced Foreign Investment Screening Framework

The House has approved a pivotal law designed to refine the screening process for foreign direct investments (FDI), particularly those that may pose a threat to national security. This initiative signifies Cyprus’s commitment to aligning with contemporary EU regulatory frameworks and enhancing the security measures surrounding strategic sectors.

Regulatory Alignment With EU Mechanisms

Legislators underscored the necessity for Cyprus to integrate with the EU acquis, referencing the FDI Screening Regulation that became operational in October 2020. This regulation establishes a collaborative framework between EU member states and the European Commission, focusing on the assessment of investments on the grounds of security and public order. With this domestic measure, Cyprus is poised to contribute to a broader European security agenda.

Key Provisions and Scope of the New Legislation

The new law mandates that any foreign investment reaching a threshold of €2 million will undergo scrutiny by a designated national monitoring authority. Special attention is given to acquisitions of land and immovable property, particularly when associated with critical infrastructures. To facilitate this, the government is actively mapping these vital assets while the finance ministry prepares interim guidelines to assist potential investors.

Clarifications and Enforcement Measures

Notably, the legislation distinguishes between foreign investors and individuals holding dual nationality, with the latter excluded from the new oversight regime. For designated foreign investors, the law requires advance notification of investment intentions, granting the national monitoring authority the discretion to enforce conditions or levy fines for non-compliance.

Political Debate and Legislative Outcome

During the plenary session, attempts by the opposition party, Akel, to introduce amendments were decisively overruled, signaling broad consensus on the importance of robust investment controls. This decisive legislative action reinforces Cyprus’s commitment to protecting its national security while ensuring compliance with EU directives.

Copyright Law Struggles To Keep Up With AI Training

Courts Are Still Applying Old Copyright Rules To AI

AI companies train models on enormous amounts of published material, including books, articles and academic research. Whether using that content without authors’ permission violates copyright law remains unresolved.

Much of the debate centres on fair use, which allows copyrighted material to be used without permission in certain circumstances. Courts consider factors such as the purpose of the use, how much material was involved and its impact on the original market.

Anthropic Case Sets An Important Precedent

A major case involving Anthropic and a group of authors provided one of the clearest rulings so far. Judge William Alsup found that using copyrighted books to train AI models was lawful, comparing the process to people reading and studying literature before creating something new.

Anthropic was nevertheless ordered to pay $1.5 billion in a settlement. The penalty concerned books the company had obtained from illegal online libraries rather than the AI training itself.

For AI companies, that distinction could prove significant because it separates studying copyrighted material from directly copying it.

Competition Could Be The Key Issue

A case involving Thomson Reuters and Ross Intelligence offers a different perspective. A court ruled that Ross could not claim fair use after using Reuters’ copyrighted material to develop a competing AI-powered legal research platform.

The decision suggests courts may be less willing to consider AI training fair use when copyrighted content is used to build a product that directly competes with the original.

For authors, an unresolved question is whether AI-generated content should be considered competition for the works used to train these models.

The Law Has Yet To Catch Up

US copyright law predates generative AI by decades, leaving courts to apply old principles to new technology. Questions also remain over copyright protection for AI-generated works. In Thaler v. Perlmutter, a court ruled that material created entirely by AI cannot receive copyright protection.

Major AI companies remain involved in copyright litigation, and different courts could reach different conclusions. For now, there is no universal rule: the legality of AI training will depend on the circumstances of each case and how courts ultimately interpret copyright and fair use.

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