Gold Magazine November - December 2013, Issue 32 | Page 50

ADMINISTRATIVE SERVICES

CONTRARY TO THE PESSIMISTIC
PREDICTIONS AND EXPECTATIONS, WE
HAVE MANAGED TO MAINTAIN THE GREAT
MAJORITY OF OUR CLIENTS
ognised worldwide. Our Institute’s regulations
have been amended to bring them in line with
the legislation and therefore our self-regulation
does not in any way imply that the law is not
as strictly enforced.
Gold: Impressions often count for a great
deal so wouldn’t it give a better impression
to foreign investors if all administrative
service providers came under the same regulatory authority?
H.H.: What matters most to foreign investors
is the quality and reliability of the service they
receive from Cyprus and not who carries out
the regulation, which is nonetheless publicly
available information at their full disposal.
Having said this, all three competent authorities are in constant liaison and cooperation to
ensure across-the-board uniform implementation of the various measures.
Gold: Six months after the Eurogroup’s
decision on Cyprus, how are the fiduciary
firms regulated by ICPAC doing?
H.H.: The events of March no doubt had an
impact on the international business sector as
a whole, which, we need to remember, is one
of the highest contributing factors to the Cyprus economy, equalling approximately 45%.
Contrary to the pessimistic predictions and
expectations, we have managed to maintain
the great majority of our clients. I believe that
this is due to the high quality service our clients receive and the overall cost of such service
in comparison to other jurisdictions, together
with the strong long-term relationships built
and maintained with our clients.
Gold: What is ICPAC doing to help restore
the island’s reputation?
H.H.: ICPAC’s actions have been multidirectional, all in an effort to restore confidence and
trust. Proposals have been put forward to the
Government, the Institute’s regulations have
been amended to enhance self-regulation and
transparency, contributions have been made
to the enactment of various legislative acts and
full support has been given to CIPA. ICPAC
representatives have participated in meetings
with the Troika, publications and interviews
have been placed with the international press

and further efforts have been made by our
members on an individual basis with the aim
of restoring client confidence.
Gold: Does ICPAC have specific new proposals to improve and protect the fiduciaries sector?
H.H.: Our Institute indeed has proposals
which, as mentioned earlier, have been made
to the Government. More importantly, however, we have been involved in a number of
operations targeted at improving and protecting the fiduciaries sector such as our cooperation with the other competent authorities on
ensuring uniform regulation, the materialisation of the action plan with the Troika within
the agreed timeframes (hence reinforcing the
legal framework) and the participation in the
Committee specifically-established by the
Minister of Energy, Commerce Industry and
Tourism for the improvement of the legal
and operational framework of the Registrar of
Companies, delivering a set of clear proposals.
Gold: Are you confident that, by faithfully
implementing all the provisions of the
agreement with the Troika, Cyprus can
regain its place as a regional professional
and financial services centre?
H.H.: Despite the haircut and the implications it brought with it, many of the measures
imposed by the Memorandum effectively
rectify a number of weaknesses existing in
our systems. The structural reform measures
are fully supported by our Institute, some of
which were long-running recommendations
of ICPAC. It is an undisputed fact that painful
reforms mostly occur during difficult times,
as in good times complacency tends to grow.
We trust that the exit from the Memorandum
will be in the near future with the least possible
casualties.
Gold: In your capacity as Director of
Abacus, how have your clients reacted to
the haircut of deposits, capital flow restrictions and the blow to the country’s image
abroad?
H.H.: Our clients, who are essentially wellestablished international organisations, have
been affected by the actual decision taken in

50 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

March rather than by the events resulting
from that decision. This gave rise to concerns
in connection with our ability as an industry
to continue. However, business carried on as
usual from our side and this helped erase some
of our clients’ concerns. Other jurisdictions
were investigated at the time but it is apparent
now that they still feel that Cyprus is the jurisdiction which serves them best.
Gold: Do you predict large outflows of
capital once banking restrictions are lifted?
H.H.: Our Institute supports the lifting of the
capital controls in a well-structured and proper
manner. If all controls were immediately
removed, then this would inevitably result
in large outflows of capital. If the restrictions
remain, then they should be supported by the
European Central Bank.
Gold: Have other jurisdictions taken advantage of the situation si nce March to tempt
clients away from Cyprus?
H.H.: Competitive jurisdictions have tried to
take advantage of the situation, as would be
expected, but with very little success.
Gold: Overall, are you optimistic about the
country’s long-term future?
H.H.: International business and tax systems
are changing worldwide. I believe that the
other end of the tunnel will find us stronger
as a jurisdiction and in a position to handle
the new character of the international business industry which will be very different from
what it is today.

IT IS AN
UNDISPUTED FACT
THAT PAINFUL
REFORMS MOSTLY
OCCUR DURING
DIFFICULT TIMES