The new payment moratorium enacted in Cyprus
The order of the Cyprus Minister of Finance in relation to a new payment moratorium came into force under the Financial and Regulatory Authorities’ Suspension Measures Law and was published on 15th January 2021.
In accordance with the Minister of Finance’s order, borrowers may apply by 31st of January 2021 to benefit from the new payment moratorium and their approval/rejection shall be notified by 28th of February 2021, with the payment holiday being activated with retrospective effect as of 1st of January 2021.
Financial institutions eligible to apply the payment holiday are licensed credit institutions, Cyprus Credit Acquiring Companies, the Cyprus Land Development Organisation, and non-credit institutions and credit brokers for consumer credit facilities relating to properties being used as a residence. Facilities include syndicated loans and loans concluded in Cyprus and governed by foreign law.
Applications for the new payment moratorium can be filed in relation to facilities concluded by 30th March 2020 the latest and which have either not been in arrears for more than 29 days as at 31st December 2020, or have been in arrears as at 31st December 2020 of not more than EUR 100 (retail loans) and EUR 500 (business loans).
Further, the right to apply for payment holiday is granted to physical persons, public legal persons, self-employed and businesses (their beneficial owners), provided they qualify under the criteria set by the relevant order, and the payment holiday relates to the repayment of both principal and interest.
The loan facilities eligible for the payment moratorium are:
Similarly to the payment moratorium that expired on 31st December 2020, under the new moratorium:
The declaration that must be completed by interested applicants is annexed to the relevant law in a template form, and in case of multiple borrowers it must be completed by each borrower and sent together to the financial institution for processing.
Our firm would be delighted to support any person interested in applying under the new payment moratorium or in case of non-eligibility to the criteria set by the new payment moratorium, evaluating their rights and obligations under their loan facility.
This publication is provided for your convenience and does not constitute legal advice.
Authors: Andria Koukounis, Huseyin Erguven