Cyprus is an EU member state and is predominantly a hub for acquisition and project financing, holding investments and assets worldwide, and establishing EU headquarters and alternative investment funds. Cyprus' strategic position as an investment and asset management centre is enhanced by more than 60 double tax treaties and benefits from the legal certainty conferred by its common law-based legal system.

The Cyprus shipping sector is a strong contributor to the economy. Cyprus hosts the largest ship management hub in the EU, its ship registry ranking third in the EU and tenth globally.

International trade is on the rise, solidifying Cyprus' position as a regional transactional hub. More than half of Cyprus' trade in goods is within the EU. Its main domestic export commodities are pharmaceuticals, photosensitive devices, and food products. Its three leading import partners are Greece, Israel, and the UK. Cyprus imports most of its machinery, chemical, vehicles, iron, and steel requirements. The discovery of hydrocarbons in Cyprus' exclusive economic zone is expected to decrease the island's dependence on energy imports and should enable it to export natural gas.

Cyprus affords investors with a reliable common law system and a regulatory environment that is fully compliant with the US Foreign Account Tax Compliance Act and rules and standards adopted by:

Exports from Cyprus are mainly governed by:

The export procedure under Article 269 of the UCC is mandatory (subject to a few exceptions) for EU goods leaving the EU customs territory. All goods to be placed under the export procedure must be covered by a customs declaration. These goods must be subject to customs supervision from the time of acceptance of the declaration until they are taken out of the customs territory, are abandoned to the state concerned, are destroyed, or the customs declaration is invalidated.

The Customs and Excise Department of the Ministry of Finance (Customs Department) is responsible for enforcing export regulations and controls. The competent customs offices are those of the districts of Nicosia, Limassol, Larnaca, and Paphos.

The export of certain goods is prohibited. As a general rule, goods subject to an import prohibition cannot be exported. Imports of the following products (among others) are prohibited:

The export of certain goods is subject to specific restrictions and controls, including export licensing or certification requirements, depending on the nature and use of the goods. These goods include:

An export licence may also be required for the export of textile and steel products.

Export licences are issued by the Export Licencing Section of the Ministry of Energy, Commerce and Industry.

Applications for export authorisations/licences must be submitted to the Minister of Energy, Commerce and Industry on a prescribed form, depending on the type of licence required. The application must include all necessary and relevant documents, including commercial documents (sales contract, order confirmation, invoice, technical specifications, and so on). The applicant must also promptly provide any information or documents deemed necessary by the Minister.

The Minister may also require an application to include:

Following examination of the application, the Minister can accept or reject the application, or issue the licence subject to specific conditions.

Decisions of Cyprus public authorities are administrative executive acts subject to judicial review under Article 146 of the Constitution of the Republic of Cyprus. An aggrieved party having a legitimate interest and seeking to annul the decision of a public authority can file an administrative recourse application with the Administrative Court.

Non-compliance with export restrictions under EU law can constitute a criminal offence under the Criminal Code, punishable by either a monetary fine or a maximum of two years' imprisonment.

The Customs Code sets out a series of customs offences and the relevant penalties. Relevant offences include the following:

If a legal entity committed the offence, its directors are also liable for the offence and corresponding penalties.

In addition, specific sanctions apply for non-compliance with the requirements of the Imports and Exports of Controlled Goods and the Conduct of Controlled Activities Law of 2011 (Law 1(I)/2011)). A person is guilty of a criminal offence punishable by a fine of up to EUR100,000 or imprisonment for up to three years, or both, if they:

Regardless of whether a person has exported or attempted to export a controlled good in breach of any export prohibition, a person omitting to present an export licence is guilty of a criminal offence punishable by a fine of up to EUR7,000 or imprisonment for up to one year, or both.

There is no procedure to file a voluntary self-disclosure of a violation under Cyprus law.

The Customs Code sets out an internal review procedure. A request for review of a decision of the Customs Department can be filed with the Director of the Department. An intra-department hierarchical review of a decision is also available under certain laws that provide for the imposition of export prohibitions or restrictions.

Decisions of Cyprus public authorities are administrative executive acts subject to judicial review under Article 146 of the Constitution of the Republic of Cyprus. An aggrieved party having a legitimate interest and seeking to annul the decision of a public authority can file an administrative recourse application with the Administrative Court.

See Question 19.

Cyprus is bound by EU legislative instruments enacted under Article 215 of the Treaty on the Functioning of the European Union (TFEU), and decisions adopted in the framework of the Common Foreign and Security Policy that impose trade restrictions on third countries. Cyprus must support the EU's external and security policy actively and unreservedly, and comply with corresponding EU actions.

Sanctions and restrictive measures applicable under EU law and implemented by Cyprus are published in the Official Journal of the EU and can be accessed on the website of the EU's External Action Service.

Sanctions of the UN Security Council adopted in resolutions passed under Chapter VII of the Charter of the United Nations (UN Charter) are binding on all UN member states. Cyprus implements binding UN Security Council resolutions through the relevant decisions and regulations of the European Council.

The Customs Department is responsible for enforcing sanctions in Cyprus.

The Financial Sector Sanctions Enforcement Unit of the Ministry of Finance is responsible for examining petitions to conduct financial transactions affected by UN and EU sanctions.

Under Chapter VII of the UN Charter, the Security Council can take action to maintain or restore international peace and security. Sanctions include complete or partial interruption of economic relations and of rail, sea, air, postal, telegraphic, radio, and other means of communication, and the severance of diplomatic relations (Article 41, Chapter VII, UN Charter). The EU implements UN sanctions.

The EU implements two main types of sanctions:

The EU Sanctions Map provides comprehensive details of all EU sanctions regimes and the corresponding legal acts.

See Question 5 for information on the procedure to obtain licences for the export of controlled items.

To obtain a licence to conduct a transaction that would otherwise be prohibited by UN or EU sanctions, a person must submit a petition (in the prescribed form) to the Financial Sector Sanctions Enforcement Unit of the Ministry of Finance.

Decisions of Cyprus public authorities are administrative executive acts subject to judicial review under Article 146 of the Constitution of the Republic of Cyprus. An aggrieved party having a legitimate interest and seeking to annul the decision of a public authority can file an administrative recourse application with the Administrative Court.

See Question 7.

There is no procedure to file a voluntary self-disclosure of a violation under Cyprus law.

Decisions of Cyprus public authorities are administrative executive acts subject to judicial review under Article 146 of the Constitution of the Republic of Cyprus. An aggrieved party having a legitimate interest and seeking to annul the decision of a public authority can file an administrative recourse application with the Administrative Court.

The EU maintains:

For more information, see the EU Sanctions Map.

Any trader can complain to the Government of Cyprus against foreign trade barriers that are contrary to the WTO or other trade agreements, whether concluded by Cyprus or the EU.

Additionally, the Trade Barriers Regulation ((EU) 2015/1843) sets out the procedure to request the initiation of a multilateral action against violations of international trade rules, primarily WTO law. Any EU enterprise or association, or any natural or legal person acting on behalf of an EU industry, can lodge a complaint if they consider that they have suffered injury as a result of obstacles to trade that have an effect on the EU market, asking the European Commission to initiate an examination procedure. Member states can also ask the European Commission to initiate this procedure. Following the examination procedure, the European Commission may seek to settle the dispute through bilateral contacts or by initiating dispute settlement proceedings.