Key Provisions of the Privatisation law

Summary of the Key Provisions of the Law on Privatisation
«Ο περί της Ρύθµισης Θεµάτων Αποκρατικοποίησης Νόµος του 2014»)
The aim of the Law is to set the legal and institutional framework enabling
privatisations in the Republic of Cyprus. Its key provisions are as follows:
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Institutional framework:
Council of Ministers (CoM): The overall guidance and approval of the
Privatisations Programme rests with the CoM. It takes all decisions of which
assets are to be privatized and provides approvals for all major stages of the
related process, including that of the final agreement with the potential
investor, subject to an overall approval by the HoR (a set of Regulations).
House of Representatives (HoR): All legislative proposals that approved by the
CoM, for the privatisation of each organization, need to be enacted into law by
the HoR. In addition, at the final stage, a set of regulations will be submitted
by the CoM to the HoR for approval, regarding the final stage of privatisation,
including the deal with the investor.
Interministerial Committee (Committee): To facilitate the overall process, the
CoM has set up this Committee, comprising of the Minister of Finance (chair),
Minister of Communication and Works, Minister of Energy, Commerce, Industry
and Tourism and Minister of Labor and Social Insurance. The Committee will
not have executive powers but will examine matters in relation to the
privatisations and review recommendations from the Privatisations Unit, before
these are forwarded to the CoM for approval.
Privatisation Unit (Unit): The Unit (independent) will have the overall
responsibility for administrating the processes of the Privatisations Programme
and it will make recommendations in relation to the various stages of the
transaction for the approval by the CoM. The Unit will be comprised of the
Head (Commissioner for Privatisations), who will have the overall responsibility
for the Unit operation, up to 6 Experts from the private sector and up to 4 civil
servants.
Technical Committees: These Committees will be established at each
organization subject to privatisation, in order to cooperate with
the Commissioner, undertake the performance of specific jobs and provide
information, mainly of technical nature, in matters relating to the activities of
the said organisations.
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Stages of privatisation:
o Consultation and exchange of information between the
Interministerial Committee and the representatives of the employees
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o
o
o
o
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regarding their rights and benefits as they derive from the
Constitution, the European Law and the existing laws of the Republic.
Decision making by the CoM regarding the privatisation method for
each organization.
Ensuring all issues of national security.
Settlement of any liabilities of the organizations.
Amendment or repeal of any other legislation which regulates
matters concerning the establishment, the operation, the local or
international obligations and the rights of the staff of the
organizations.
Enactment of appropriate legislation to regulate monopolies.
Approval of Regulations by the HoR regarding the time of
commencement of the privatisations, the assets to be privatized, the
procedure and the amount of the consideration.
•
Methods of Privatisation: All methods that are used in commercial practice
(sale, lease, grant of operational rights, etc.) are available for the
privatisation of state-owned assets. The potential combination of more than
one method in a single transaction is permitted.
•
Prior Consultation: In cases of major decisions, including capital
investments, incurrence of liabilities beyond the ordinary course of
business, affecting directly or indirectly the value of an organization
subject to privatization, the Board of Directors of the said organization will
consult with the Unit and the line Ministry, before proceeding with the
implementation of the decisions.
•
Proceeds: All proceeds received from the privatization processes will be
deposited in the Consolidated Fund of the Republic and will be used for the
reduction of Public debt. It is noted that the proceeds from privatisation
will fully arise from the private sector, inside and outside of Cyprus, and
form other state funds outside Cyprus.
•
Other provisions regarding conflict of interest, monitoring mechanisms,
auditing procedures, confidentiality and transparency issues, offences etc.
Note: The Law is currently being translated from Greek to English. Once
completed, it will be uploaded on the website.

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