Around 10 foreign investment cases have so far been examined under Cyprus’ foreign investment screening mechanism, covering sectors including financial services, education, cybersecurity, artificial intelligence software and dual-use technologies and equipment.
The figures were presented during Thursday’s meeting of the House Institutions Committee, which examined the issue following a proposal submitted by DISY MP Nikoleta Konstantinou.
The discussion focused not only on the cases referred to the competent authorities but also on the adequacy of available information, safeguards against conflicts of interest and the possibility of parliamentary oversight of the mechanism.
Most cases involve international acquisitions in which a company is bought abroad but has a subsidiary in Cyprus. As a result, Cyprus becomes involved in the screening process. The same transaction may also be notified to several EU member states where the wider corporate group operates.
How foreign investors are screened
The Ministry of Finance prepares the case file, while each ministry involved carries out its own due diligence, submitting relevant information and any potential concerns.
Procedures are not automatic, said Eleni Apegitou, a representative of the Ministry of Foreign Affairs, explaining that each ministry examines the proposed investment from its own area of responsibility.
The Advisory Committee consists of representatives from seven ministries, with particular importance attached to the assessment of the ministry responsible for the sector concerned.
Elena Zachariadou, representing the Ministry of Finance, said the legislation establishes the criteria and information required for the screening process.
“The law itself provides clarity to the screening framework,” she said.
Regarding the origin of investment funds, Maria Kyrmizi-Antoniou, head of the Unit for Combating Money Laundering (MOKAS), said the authority could be asked to provide information about any suspected transactions or money laundering cases linked to prospective investors.
MOKAS is not a member of the Advisory Committee.
The Police also expressed readiness to provide information from its own records, as well as information accessible through Europol and Interpol.
The Ministry of Finance said it could seek information from the competent authorities when required for the screening process.
Questions over foreign investment in healthcare
During the discussion, MP Irene Charalambidou raised concerns about the concentration of foreign investors in the healthcare sector, arguing that relevant investments had not been screened.
She was told that acquisitions in healthcare had taken place before Cyprus passed the legislation establishing the foreign investment screening mechanism.
It was also noted that Cyprus was among the last EU member states to introduce the relevant framework.
The relationship between foreign investment screening and other regulatory approval procedures was also discussed.
Pantelis Christofides, representing the Cyprus Bar Association, pointed out that a positive decision by a competition authority does not bind the screening mechanism.
A transaction may therefore receive competition clearance but still fail to secure approval under national security and public order criteria.
Conflict of interest safeguards and parliamentary oversight
Transparency and safeguards against conflicts of interest were also central to the discussion.
Konstantinou asked what measures were in place to prevent conflicts of interest among public officials involved in assessing investment cases.
The Ministry of Finance said private individuals invited to contribute to the examination of cases are required to submit declarations confirming the absence of conflicts of interest and their commitment to confidentiality.
Regarding public officials, Eleni Symeonidou, representing the Law Office of the Republic, referred to the impartiality obligations governing the civil service.
Konstantinou also called for an assessment of the results of investment initiatives, including incentives and any public funding involved.
The Ministry of Finance clarified that evaluating productivity and financial performance falls outside the responsibilities of the screening mechanism.
Regarding possible improvements to the process, the Ministry said it was open to discussing additional regulations.
It also said the possibility of providing further updates to the parliamentary committee could be examined in consultation with the Law Office of the Republic.
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