Fraud in Cyprus

“fraud in Cyprus does not exist as specific criminal offence”

When the Editor saw an article headed ” Shark hauled up off Paphos” in the Cyprus Mail, he immediately thought of the Cyprus Informer article Beware of Property Sharks.

But it was a real shark where Egyptian fishermen had caught a large shark, 2.5 metres, called ‘Pambakas’.  So we know what that shark must look like.

But what does a real estate shark look like?

A study by KPMG Forensic profiles a Fraudster by examining the characteristics of the perpetrators of fraud cases, and the circumstances in which the frauds were perpetrated. The survey covered 360 cases that have recently been investigated by KPMG Forensic in the Europe, Middle East and African region.

The key characteristics identified were as follows:

85% of fraudsters were male.
The typical fraudster was aged between 36 and 55 years.
The fraudster will continue to commit fraudulent acts until caught:
91% of profiled perpetrators acted multiple times, often over a period of several years

Maria Krambia-Kapardis in the Journal of Financial Crime says “that in Cyprus, despite the fact that most victim companies had not reported the crime, the estimated losses run into hundreds of millions of Cyprus pounds, and it took the forms of mismanagement of public funds, tax evasion, stolen cheques, bounced cheques, forged cheques, pensioner fraud, share price manipulation, deception and false documentation, pharmaceutical and accountancy fraud.” 

But Krambia-Kapardis also says “that fraud in Cyprus does not exist as specific criminal offence”.  In the UK however a reform of the criminal law has introduced the Fraud Act 2006 which creates a new general offence of fraud.  Perhaps the Cyprus Government needs to attend to this in Cyprus?  

Why does Cyprus seem to have so many sharks?

Attractiveness of the Cyprus domestic and corporate tax regimes is a possible reason as well as ranking high in the world’s list of the most free economies.

According to a another recent survey conducted by KPMG, Cyprus is one of the most attractive offshore tax havens in Europe. Together with Ireland and Switzerland, Cyprus enjoys relative transparency in its tax structures, suffers lower levels of taxation change and upset annually compared to other European countries.

For companies seeking a European base for international business transactions, Cyprus could just be the ideal offshore tax haven for incorporation. 

For a start the nation is in the EU, therefore companies enjoy the associated status by establishing operations therein.  Secondly, the country has managed to maintain a low level of corporation and even personal income tax as well as dividend and royalty tax despite gaining EU entry in 2004…and now, from the 1st of January 2008 Cyprus has adopted the Euro as its official currency which makes European based trading simpler for companies and gives businesses even greater confidence in the jurisdiction.

CYPRUS HAS the world’s 22nd freest economy according to an assessment by The Heritage Foundation in Washington and published in the Wall Street Journal yesterday.

Founded in 1973, The Heritage Foundation is a research and educational institute – a think tank – whose mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.

More specifically, the island is characterised with a free market economy of 71.3 per cent and is ranked 11th out of 41 countries in the European region, with an overall score higher than the regional average and an above average score in nine of ten ‘economic freedom’ categories.

Coming out on top with 90 per cent are property rights, with the foundation reporting that, “contracts and property rights are enforced effectively.”

We don’t think that Conor O’Dywer would have thought that nor those who featured in the Channel 4 programme on Cyprus.

The Heritage Foundation in Washington is a world renowned organisation.  Has it been duped by Cyprus? Or is the number of property frauds in Cyprus proportionately low as compared against the total number of safely conducted property transactions across Cyprus?

The Cyprus Informer estimates that the annual figure could be 4000.

Perhaps that is why the Government of Cyprus is not moving fast with the reforms demanded by the Cyprus Property Action Group (CPAG)?  The Cyprus Informer suggests that CPAG needs to publish some figures on its web site to support its campaign.

Cyprus Property Help & Advice Centre™ ® ©
The Black Art of Buying Property in Cyprus™ ®
The Cyprus Informer™ ® ©
http://cyprusinformer.eu

Related posts:

1. Mobile Home Sites in Cyprus – An New Attractive Proposition for UK InvestorsPeople will always wish to live in a climate as Cyprus is lucky to have.    Image courtesy of http://www.cyprus-lodgehomes.com/ So what do UK Investors know most about that the others do not?  Mobile and Lodge Homes is the answer.  There are many, many holiday and semi residential sites across the UK.  Spain and France have been "invaded" by the mobile...
2. Cyprus Property, Mortgages, Land, Title Deeds and BanksI am pleased to be able to explain in detail the relationship between Cyprus Property, Mortgages, Land, Title Deeds and Banks. Are these mortgages scams?  It is important that each instance is considered seperately.  Some instances may be scams, taking advantage of a system which can be manipulated to facilitate fraud.  But, in Cyprus, we are dealing with a country...
3. Cyprus Property – Low-cost flights swell numbers to euro-havenTelegraph 24/03/2007 Cyprus is a British favourite and development is proceeding apace. However, some believe that the essential quality of the island could be compromised. Ben West reports Agents and developers in the south of Cyprus - the Greek sector - have been trumpeting the fact that budget airline Monarch is about to launch low-cost flights from Britain to the...
4. Beware of Black Money in CyprusBlack Money is common in transactions in Cyprus.  I once saw an article which alleged that only 4000 people pay tax in Cyprus !! What is a black money transaction?  Another way of looking at it is an "under the table" transaction or part of a transaction. Black Money is used as a way of reducing income tax because it...
5. Cyprus Property News Snippets  VAT on Land Sales This was due to be introduced in January 2008 which coincides with the change over to the Euro. The Cyprus Government has asked the European Commission for permission to defer this until July 2008.  Other rumours include a deferral until 2010 and that the VAT rate will be 6% but there have been no official...
6. Cyprus Property – It should be “No Title Deeds” then “No Purchase” !! There has been a flurry of articles published recently on the subject of buying a home in Cyprus.  These publications have been in the Cyprus Mail Newspaper and a Magazine called "In Touch". (How did the Editor of the Cyprus Informer get on the front cover of Fortune? That is another story !!)  If you don't want to read...
7. Cyprus Property News Grapevine Magazine on Cancellation Fees “There was shock amongst developers when, for the first time, Paphos District Court ordered a property company to reimburse a British couple monies they were obliged to pay when they sold a house without Title Deeds. The homeowners were never issued Title Deeds and when they decided to sell on their property, had to...
8. Cyprus Property Market – A Survival Guide  The Cyprus Informer says "it is not a great time to buy off plan right now with the build in of big commissions and VAT which have to unwind. That might not unwind by appreciation over the next 2 years or so as the Cyprus market currently comes off boom if you wanted to sell quite quickly. But looking...
9. Contract Flipping – Much MoreContract Flipping is a situation where a person enters into a contract to purchase a new property off plan but only pays 30% as a deposit before he/she sells it on for a profit. Essentially the speculator is able to leverage the potential price increase in property over the one or two years it takes to complete the property. In...
10. Cyprus Property Bubble on Verge of Bursting  A new Cyprus Law is proposed making any mortgage rank behind a registered contract for sale will mean that banks will want their money back. Once the mortgage is out of the way then Title Deeds can be issued doing away with waits for legal ownership of 10 years or more becoming a thing of the past. Also Contracts with...