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Cyprus Advances Legislation To Safeguard National Security Against Foreign-Controlled Enterprises

by THEFUTURE.TEAM

February 20, 2026

Cyprus is poised to implement significant changes to its corporate registration process amid rising national security concerns. New legislation under discussion will empower authorities to block the registration of companies controlled by non-EU nationals, with a particular focus on entities where Turkish individuals hold the ultimate beneficial ownership.

Targeted Reforms And Enhanced Scrutiny

Lawmakers have raised concerns about potential espionage risks and the strategic acquisition of immovable property by companies linked to Turkish interests. Parliamentary discussions referenced multiple cases in which companies with Turkish ultimate beneficial owners were registered in Cyprus. Registrar of Companies Irini Mylona-Chrysostomou said authorities are already monitoring attempts by individuals with such connections to establish companies, with the registrar’s office coordinating with district authorities before approvals are granted.

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Regulatory Adjustments To Combat Loopholes

A key component of the proposed reforms is stricter disclosure requirements for Turkish nationals acting as ultimate beneficial owners of companies or partnerships operating in Cyprus. In line with EU Anti-Money Laundering directives, the framework requires identification of any natural person holding more than 25% of shares or voting rights. Officials say the measures aim to close existing loopholes and strengthen oversight. Two separate bills are under review, one focused on corporate entities and another covering partnerships. The proposed legislation would also allow authorities to remove companies from the registry when national security concerns arise.

Calls For Swift Legislative Action

Several political figures have called for rapid adoption of the reforms. DIKO MP Zacharias Koulias, Chair of the House Audit Committee, argued that the issue has remained unresolved for too long and urged lawmakers to approve the measures before parliament dissolves in April ahead of legislative elections. AKEL representative Christos Christofides said authorities are already reacting to developments rather than preventing them, warning that acquisitions of land near sensitive locations such as airports and military facilities raise broader security concerns.

Evolving Real Estate Dynamics

The proposed changes come amid increased scrutiny of foreign investment in Cyprus’ real estate market. Recent data shows that non-EU nationals, including investors from Lebanon, Israel, Russia and China, account for more than one-quarter of property transactions recorded in 2024. Officials note that companies controlled by non-EU beneficiaries are often classified as domestic entities, a factor that complicates oversight and has prompted calls for clearer regulation.

The forthcoming legislative measures reflect a broader trend in European regulatory practices, balancing open economic policies with strong safeguards to protect national interests. As Cyprus navigates these challenges, the new rules promise to build a more resilient framework to counter potential threats posed by unscrupulous foreign investments.

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Banks Required To Refund Unauthorized Transactions Immediately, Confirms EU Prosecutor

Introduction

Advocate General Athanasios Rantos of the Court of Justice of the European Union stated that banks must refund customers without delay for unauthorized transactions, even when the client may have acted with gross negligence. The opinion clarifies how European legislation should be applied in cases involving payment fraud.

Case Overview

The case concerns a Polish bank customer who became the victim of a phishing attack. A fraudster posed as a buyer on an online auction platform and sent the customer a link that closely resembled the bank’s official website. After entering her login credentials, the customer unintentionally gave the attacker access to her account. The fraudster subsequently carried out unauthorized transactions.

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The bank refused to reimburse the funds, arguing that the client had demonstrated gross negligence by entering her banking details on the fraudulent website. The dispute was later brought before the Polish courts.

Legal Implications

The Polish national court asked the Court of Justice of the European Union to clarify whether European law requires banks to refund unauthorized payments immediately, even when the customer may have acted negligently.

Advocate General Rantos stated that EU legislation requires banks to restore the funds without delay unless the institution has reasonable grounds to suspect fraud and has formally reported the matter to the competent authorities. The opinion also explains that an immediate refund does not prevent the bank from later seeking compensation if it can prove that the customer failed to comply with their obligations under payment services regulations.

Consumer Protection And Regulatory Outlook

European payment legislation places strong emphasis on protecting consumers from financial fraud. The regulatory framework aims to ensure that users of payment services receive prompt reimbursement when unauthorized transactions occur. Banks may still investigate individual cases and pursue legal action if they believe the customer breached their responsibilities under payment service rules.

Conclusion

The Court of Justice of the European Union will now consider the Advocate General’s opinion before issuing its final ruling. Such decisions are often influential in shaping the interpretation of EU law. A ruling in line with the opinion could have significant implications for banks across the European Union and for how financial institutions handle reimbursement claims in cases of payment fraud.