Asset Tracing & Recovery in Cyprus

Author: N. Pirilides & Associates LLC
Date:2020-02-07
With Cyprus being established as an international financial centre, mainly because of its beneficial corporate tax rate and wide network of Double Taxation Treaties, the set up of complex corporate structures with various layers of companies from different jurisdictions often includes Cyprus. Inevitably, cross-border transactions which involve Cypriot entities may end up with commercial fraud being committed from a Cyprus company or a company managed and controlled from Cyprus.
 
Our experienced Litigation & Dispute Resolution team has been regularly called upon by fraud victims, whose assets have ended up in Cyprus, to provide legal assistance. We are able to draw on an array of tools available in Cyprus to trace information of the whereabouts of misappropriated assets and secure them for recovery.
 
These ‘tools’ mainly include the following:
 
• Freezing (‘Mareva’) and ancillary disclosure orders:
We are mainly instructed to seek freezing injunctions, usually with a worldwide effect, and ancillary disclosure orders on behalf of clients in order to secure assets of the fraudsters against dissipation and obtain information in support of the freezing injunction, generally with a view to ensuring better enforcement and/or policing of the injunction.
 
• Third party disclosure orders (‘Norwich Pharmacal’):
As part of the identification of assets that have been misappropriated, disclosure orders against third parties ‘mixed in the wrongdoing’ or banks are regularly sought, especially against the latter so as to locate funds that have been transferred through multiple bank accounts. 
 
• Search orders (‘Anton Piller’):
Admittedly the most hardly granted order due to its draconian nature, yet available in Cyprus as a remedy to preserve evidence that may be relevant to a claim when it is situated on premises that are not under the control of the claimant.  
 
• Appointment of interim receivers:
Cyprus Courts have also the power under section 32 of the Courts of Justice Law (14/1960) to appoint interim receivers whenever it is “just and convenient” to secure any type of asset, even assets outside the jurisdiction, pending trial. It should be noted that the nature of this remedy is more intrusive than the granting of an injunction thus the claimant has the burden to show that the appointment is appropriate because other less invasive remedies would be inadequate.
    
• Securing and enforcing foreign judgments and arbitral awards:
In certain circumstances, Cyprus Courts may be used to secure and enforce foreign judgments or arbitral awards. Cyprus Courts have the power to issue any type of interim relief in aid of foreign pending or contemplated court or arbitration proceedings. Our Litigation & Dispute Resolution team works with foreign claimants who wish to freeze the assets of defendants, irrespective of whether such defendants are domiciled in Cyprus or not, located in Cyprus.
 
Our services in this area are mostly sought after by victims of dishonesty to tackle further dissipation of their assets which has been ended up in Cyprus. N. Pirilides & Associates LLC has the necessary expertise with a proven track record to assist clients in fraud cases to trace and recover their assets.

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