Cyprus Law Articles

Fraud and assets recovery

Many fraud cases involve complex corporate structures, incorporated in various jurisdictions some of which might cause obstacles or create problems for victims.

Cyprus Courts, have jurisdiction to assist victims of fraud, in the recovery of stolen assets, by inter alia granting the following interim relief:

I. Issuing freezing orders, to block assets held by the wrongdoers within the jurisdiction.
II. Issuing the so called “Mareva type” freezing orders, blocking assets, held by a third party, when there is prima facie evidence that, such assets are beneficially owned by the wrongdoers.
III. Issuing discovery orders or Norwich Pharmaceutical orders against third parties (i.e. Banks etc.) for the disclosure of information or documents to assist the victims of fraud to:

(i) To trace their assets;
(ii) To identify the wrongdoers;
(iii) To plead their case; and
(iv) To prove their case.

Issuing the so called “Gagging orders”, to preclude any party served with freezing orders or discovery orders to alert the wrongdoers, about the legal steps taken by the victims in Cyprus.

Issuing freezing orders blocking assets of legal entities affiliated or owned or controlled by the wrongdoers.
Issuing orders against the wrongdoers, or their agents – (provided that there is an in personam jurisdiction of Cyprus Courts over them) – to disclose on oath, the value and location of the assets, which are legally or beneficially owned by them.

Tracing has been used in Cyprus as a mechanism to provide recompense to victims of fraud.

Tracing refers to the process, whereby assets, which in equity belong to another person, or may be said to be impressed by a constructive trust in another’s favour, may be traced by their beneficial owner, from their point of departure, through to their current location.

It provides an answer, to the question of who, is the true owner of the assets – if they have been misappropriated, or lost due to some form of wrongdoing.

Except, from the legal steps, which are available to be taken by a victim of fraud, before Cyprus Courts, there is also available the mechanism of reporting such fraud, to the Money Laundering Unit (“MOKAS”) of the office of the Attorney General of the Republic, or to the Cyprus Police (Financial Crime Bureau), in order to request the obtaining of freezing orders etc., on the basis of inter alia the provisions of the Money Laundering Legislation, of the Republic of Cyprus.