by Andria PapageorgiouAI Act Set to Come into Force on 1 August 2024
The countdown to compliance with the Artificial Intelligence Act (“AI Act”) has started. Signed into law on June 13, 2024, the AI Act was set for publication in the EU Official Journal on July 12, 2024, and will enter into force on August 1, 2024.
Background
The AI Act establishes a legal framework aimed at achieving human-centric AI, protecting health, safety, and fundamental rights from the harmful effects of AI, while promoting innovation.
Scope of the AI Act
The AI Act applies to all stakeholders in the AI value chain, including AI providers (such as those of general-purpose AI, or “GPAI”), users, importers, distributors, manufacturers, and authorized representatives. Exemptions exist for AI systems used in scientific research, military, defense, or international cooperation, provided fundamental rights safeguards are in place.
Extra-Territorial Scope
The AI Act has extra-territorial reach, impacting organizations inside and outside the EU. It applies to entities placing AI on the EU market, using AI outputs within the EU, or providers of AI systems and general AI models outside the EU, who must appoint an EU-based representative.
Risk Categories
The AI Act adopts a risk-based approach, with regulations varying based on the severity and likelihood of harm:
- Prohibited: AI systems for social scoring, cognitive behavioral manipulation, biometric categorization.
- High: AI in employment, credit decisions, health/life insurance risk assessment.
- GPAI: Large language models like ChatGPT.
- Limited: Chatbots.
- Minimal: Spam filters, video games.
High Risk Providers
High-risk AI system providers must adhere to various obligations:
- Risk management systems
- Data governance
- Technical documentation
- Record-keeping
- Transparency
- Human oversight
- Accuracy, robustness, and cybersecurity
- Quality management systems
- Documentation and log generation
- Cooperation with authorities
- Displaying the CE Mark
- Registering with the EU database
GPAI Providers
GPAI providers must prepare technical documentation, copyright policies, and publish training data. They may adhere to voluntary codes of practice for compliance. GPAI systems posing systemic risks must undergo model evaluation, ongoing assessment, risk mitigation, and incident reporting.
User Obligations
AI users have fewer obligations but must ensure staff have AI literacy. Users of high-risk AI must implement technical and organizational measures, human oversight, monitoring, and data protection impact assessments. Transparency rules apply to AI systems creating deep fakes or involving emotion recognition.
Enforcement
The EU AI Office will regulate the AI Act’s implementation, supported by the AI Board and national supervisory authorities. National authorities will oversee enforcement, appointing a public authority to supervise fundamental rights.
Fines
The AI Act imposes significant fines:
- Up to €35 million or 7% of annual global turnover for breaches of prohibited AI provisions.
- Up to €15 million or 3% of annual global turnover for other breaches.
- SME fines will consider economic viability, applying the lower of the percentages or amounts mentioned.
SME Support
Special provisions help SMEs boost innovation:
- Priority access to AI regulatory sandboxes free of charge.
- Tailored training on the AI Act.
- Information and templates for documentation.
- Simplified technical documentation for high-risk AI system providers.
Timeline
Key dates for compliance:
- November 1, 2024: Identify and notify the Commission of the national public authority for fundamental rights.
- February 1, 2025: Scope, definitions, and prohibited AI systems provisions apply.
- August 1, 2025: GPAI, penalties, and EU governance provisions apply.
- August 1, 2027: Safety components and specific high-risk products (Annex I) provisions apply.
Future Developments
The AI Act is part of the EU’s broader legal approach, including the proposed AI Liability Directive and the Product Liability Directive, addressing procedural rules for civil claims and compensation for defective AI systems.
What to Do Now
Organizations should proactively:
- Identify AI used in the business and the applicable risk category.
- Implement an AI governance framework with policies, staff training, and vendor due diligence.
- Communicate compliance measures to stakeholders.
Developing an AI compliance program is time-consuming, and businesses must start early to meet the deadlines. Detailed guidance will take months to emerge, so a risk-based approach and benchmarking against industry practices are essential in the meantime.
In case you have any questions, please do not hesitate to contact us for further professional assistance.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.
by Andria PapageorgiouA New Legislative Framework for Mediation Introduced by the Ministry of Justice and Public Order
Mrs. Papageorgiou boasts an impressive array of qualifications, including LLB, LLM, and LPC degrees from esteemed UK universities and professional institutions, as well as CySEC Advanced and AML Certificates. Her extensive experience spans various sectors, having held pivotal roles such as Senior Associate Lawyer in top-tier law firms, where she served high-net-worth individuals and corporations with distinction.
Furthermore, Mrs. Papageorgiou has held various managerial positions, ascending to the pinnacle of Chief of the Legal and Compliance Department in a prominent Fintech Group of Companies, specializing in forex and payments industries. In these roles, she led dynamic legal teams, adeptly resolving complex legal matters daily.
Our law firm proudly holds Affiliate Membership in prestigious organizations such as the International Compliance Association, International Compliance Professionals Association, and Cyprus VAT Association, among others, as detailed on our website www.apapageorgiou.com.
With Andria Papageorgiou Law Firm, you can expect unparalleled expertise, dedication, and professionalism in every aspect of legal representation and mediation services.
In case you have any questions, please do not hesitate to contact us for further professional assistance.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.
by Andria PapageorgiouWhy Utilise a Family Office?
In case you have any questions, please do not hesitate to contact us for further professional assistance.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.
by Andria PapageorgiouThe legislation concerning paternity, parental, caregiving, force majeure leave, and flexible work arrangements aimed at promoting work-life balance
The recent enactment known as The Work-Life Balance Law encompasses provisions regarding paternity, parental, caregiving, force majeure leave, and flexible work arrangements. On December 16, 2022, the House of Representatives approved this legislation. It guarantees paid paternity and parental leave, carer’s leave, and force majeure leave. Moreover, it grants parents of children up to 8 years old and caregivers the entitlement to request flexible work schedules from their employers. Notably, certain rights previously covered by the Paternity Protection Law and the Parental and Force Majeure Leave Law have been replaced by this new law.
Paternity Leave
The entitlement to statutory paternity leave remains unchanged, with a maximum duration of 2 weeks. This leave can be taken within the timeframe starting from the week of birth or adoption and concluding 2 weeks after the conclusion of the maternity leave period, as stipulated by the Maternity Protection Law.
The right to paternity leave is applicable irrespective of the duration of the employee’s tenure with the employer and is applicable even in instances where the child does not survive birth.
In situations where the mother passes away during childbirth or at any point during the maternity leave period, the duration of paternity leave extends for the same number of weeks as the remaining duration of the mother’s maternity leave entitlement, had she survived.
The paternity allowance is disbursed by the Social Insurance, adhering to the regulations outlined in the Social Insurance Law. Employees must inform their employer of their intention to take paternity leave at least 2 weeks in advance.
Parental Leave
Employees who have maintained continuous employment with the same employer for at least 6 months are eligible for parental leave. This leave spans 18 weeks per child, with an extension to 23 weeks under specific circumstances: (i) if the employee is a widower or single parent, (ii) if parental care rights are revoked from the other parent, or (iii) if the other parent does not acknowledge the child.
Parental leave can be taken intermittently, ranging from a minimum of 1 day to a maximum of 5 weeks per calendar year.
Except in cases where no parental leave allowance is provided for a specific period, parental leave entitlements cannot be transferred between parents. However, one parent can transfer a maximum of 9 remaining weeks to the other parent.
Employees must inform their employer at least 3 weeks in advance of the intended start date of parental leave.
Statutory Parental Leave Allowance
Until August 1, 2024, the Social Insurance Fund provides a parental leave allowance for the initial 6 weeks of parental leave. From August 2, 2024, onwards, this allowance extends to the first 8 weeks, subject to the eligibility criteria outlined in the Social Insurance Law. The applicant must have completed 12 months of employment within the last 24 months. In cases of a disabled child, the duration of the parental leave allowance is prolonged.
Flexibility
Employees retain the right to request flexible parental leave arrangements (such as part-time or reduced hours work) without forfeiting their entitlement to parental leave allowance. This request can be made for a minimum of 1 day. When making such a request, employees must specify the desired type of flexibility, duration of leave, and which portion of the parental leave should be taken flexibly.
Employers can defer the commencement of parental leave for up to 2 months for operational reasons, provided they first offer flexible work options where feasible.
Carers Leave/Force Majeure Leave
For the first time, the Law grants employees the right to request up to 5 days of unpaid leave annually as carer’s leave. This entitlement applies when an employee needs to attend to the care of a family member (as defined by the Law) or a person residing in the same household who requires substantial care or assistance due to a severe medical condition.
Carer’s leave can be taken either consecutively or intermittently.
The provision for 7 days of unpaid force majeure leave per year, previously addressed in distinct legislation, is now governed by the Law.
Flexible Work Arrangements
Under the new legislation, working parents with children up to the age of eight and any caregiver (as outlined in the Law) now have the right to seek flexible work arrangements for caregiving purposes. Flexible work arrangements encompass adjustments to an employee’s work patterns, which may include remote work options, flexible schedules, or reduced hours.
To qualify for this benefit, employees must have maintained six months of continuous employment with the same employer. Employers are required to respond to such requests within one month and retain the authority to defer or decline requests, providing pertinent justifications for their decisions.
Preservation of Employment Rights during Paternity, Parental, Care, or Force Majeure Leave
According to the Law, taking leave under its provisions should not impact an employee’s seniority, opportunities for promotion, or their ability to return to equivalent positions with the same pay and benefits. Additionally, any period of absence is considered as time worked when calculating an employee’s annual leave entitlement. Similarly, under the Termination of Employment Law of 1967, such absences are to be counted as part of the employment period. Given these changes, employers are encouraged to review and revise their employment manuals, contracts, and practices to align with the new legislation.
In case you have any questions, please do not hesitate to contact us for further professional assistance.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.
by Andria PapageorgiouIntroducing Family Office Services
Safeguarding and effectively managing your family’s wealth, estate, assets, and other familial matters for future generations is a decision of utmost importance, requiring careful attention from a firm well-versed in the intricate complexities of the Family Office and sensitive to its multifaceted functions.
The essence of a Family Office extends beyond mere administrative and managerial tasks concerning familial wealth. It encompasses a suite of integrated services and functions, tailored to meet the unique lifestyle and requirements of each individual client, thus forming a customized service package.
Whether the aim is to preserve an existing estate or facilitate its growth, Andria Papageorgiou Law Firm can establish the appropriate Family Office, leveraging a wealth of expertise from legal, tax, and accounting firms, investment advisors, and real estate professionals, all consolidated into a comprehensive portfolio.
Family Office services encompass a wide array of offerings tailored to individual client needs, including the management of wealth, lifestyle, trusts, charitable foundations, valuable collections, succession plans, as well as the secure storage of essential family documents and records.
Furthermore, the Family Office addresses various legal considerations relevant to clients, spanning corporate governance, tax and estate planning, compliance, real estate transactions, employment matters, and employee benefits, among other areas.
In case you have any questions, please do not hesitate to contact us for further professional assistance.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.
by Andria PapageorgiouParliament Passes Landmark Artificial Intelligence Act: Ensuring Safety, Compliance, and Innovation
In a historic move, Parliament has greenlit the Artificial Intelligence Act, marking a significant step towards ensuring safety, compliance with fundamental rights, and fostering innovation in the AI landscape.
This legislation, which underwent negotiations with member states in December 2023, received overwhelming support from MEPs, with 523 votes in favor, 46 against, and 49 abstentions. Its primary objective is to safeguard fundamental rights, democracy, the rule of law, and environmental sustainability from the potential risks posed by high-risk AI technologies, all the while propelling Europe forward as a global leader in the field.
Among its provisions, the Act prohibits certain AI applications deemed detrimental to citizens’ rights, such as biometric categorization systems based on sensitive characteristics and the indiscriminate collection of facial images from sources like the internet or CCTV footage for facial recognition databases. Additionally, practices like emotion recognition in workplaces and schools, social scoring, predictive policing solely based on profiling, and AI manipulation of human behavior or exploitation of vulnerabilities are strictly forbidden.
However, the legislation acknowledges exemptions for law enforcement agencies, allowing the use of biometric identification systems under tightly defined circumstances, such as targeted search operations for missing persons or counterterrorism measures, with strict safeguards in place.
Furthermore, the Act imposes clear obligations on high-risk AI systems, mandating risk assessment and mitigation measures, transparent operations, accurate decision-making, and human oversight. Citizens are granted the right to lodge complaints regarding AI systems affecting their rights and to receive explanations for decisions made by such systems.
Transparency is a cornerstone of the Act, requiring general-purpose AI systems and their underlying models to adhere to stringent transparency standards, including compliance with EU copyright laws and the disclosure of comprehensive summaries of training data. Additionally, measures are introduced to combat the proliferation of manipulated media content, such as deepfakes, by mandating clear labeling.
To support innovation and empower small and medium-sized enterprises (SMEs), regulatory sandboxes and real-world testing environments will be established at the national level, providing opportunities for developing and training innovative AI solutions before market entry.
In reflecting on this milestone, co-rapporteurs Brando Benifei and Dragos Tudorache emphasized the Act’s significance in shaping a future where AI aligns with European values, protects citizens’ rights, and fosters responsible innovation.
Looking ahead, the Act is slated for final adoption pending legal review and endorsement by the Council, with provisions set to come into effect progressively over the next few years. This landmark legislation not only responds to citizens’ demands for a safer and more trustworthy AI environment but also sets a precedent for global governance in the rapidly evolving digital landscape.
In case you have any questions, please do not hesitate to contact us for further professional assistance.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.
by Andria PapageorgiouNew Membership Announcement
We are thrilled to announce a momentous achievement for our esteemed Founding Lawyer, Ms. Andria Papageorgiou, who has been elected by the Board of the Cyprus Bar Association (CBA) to serve on the prestigious Committee of Finance of the CBA. This appointment stands as a testament to Ms. Papageorgiou dedication, expertise, and unwavering commitment to excellence in the finance industry.
This Committee will be responsible, among others, for the below:
This appointment not only reflects Ms. Papageorgiou’s individual accomplishments but also highlights the caliber of talent and expertise within our Firm. It reinforces our commitment to fostering a culture of excellence and innovation that extends beyond our Firm’s boundaries.
The role of Ms. Papageorgiou in the Committee of Finance at the CBA will undoubtedly pave the way for groundbreaking initiatives and strategic decisions that will shape the future of the finance industry in Cyprus. We are immensely proud of her achievement and are confident that her invaluable insights and expertise will continue to drive positive change and growth within our Firm and the industry at large.
We look forward to witnessing the continued success and impactful contributions that Ms. Papageorgiou will bring to both the CBA and our Firm.
In case you need our legal support, please do not hesitate to contact us for further professional assistance.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.
by Andria PapageorgiouImportant update on the Cyprus UBO Register
The Department of Registrar of Companies and Intellectual Property has announced that the final electronic system solution of the Register of Beneficial Owners of Companies and other legal entities (UBO Register) is now implemented. The final system solution replaces the existing system, which was implemented with effect as of 12 March 2021 as an interim measure for the collection of information on beneficial owners. Access to the final system solution begins on 14/11/2023. You may access the official announcement of the Registrar (which is in Greek) by clicking here.
PERIOD A: 14/11/2023 – 31/12/2023
All companies established or registered under the Companies Law, Cap. 113, all European Public Limited Liability Companies (SE) and all Cooperatives (hereinafter Organizations) or their officers/partners are invited to enter the final system and proceed with the “Initial Registration”. That is, to update/ re-register their UBOs, even if they have already done so in the interim solution system. During this period there will be no fines imposition.
In effect, this means that all previously inserted UBO-related details into the interim system must be processed again into the final system with the most up-to-date status as of 14/11/2023 and also record any updates thereafter. In order to avoid fines this must be done by 31/12/2023.
Period B: 01/01/2024 – 29/02/2024
Those who have not complied with the updating/ re-registration of their UBOs into the final system during Period A, will be subject to a fine. The fine will be calculated daily from 01/01/2024 until the date of submission (* see fines note below). After the resulting fine is paid, they will then be able to proceed with registration and/or suspension and/or change without any further financial burden.
*Fines: By failing to comply, the legal entity and potentially each of its officers shall be subject to a fine of €200 and a further daily fine of €100 until the date of compliance, with a maximum charge of €20,000. Further, there could be a criminal liability or prosecution of any person failing to comply.
Period C: 01/03/2024 onwards
During this period, all actions based on the relevant Directive (K.D.P. 112/2021, as amended) will be available as below:
• Updating the Register of Beneficial Beneficiaries
• Confirmation of Beneficial Beneficiaries
• Mismatch
• Electronic Research in the Register of Beneficial Beneficiaries
• Request for exemption from disclosure of information
• Request for access to the details of a minor
• Calculations of monetary charges where applicable
In case you have any questions, please do not hesitate to contact us for further professional assistance.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.
by Andria PapageorgiouOpinion on the product intervention measures on CFDs and other high-risk products proposed by the Spanish CNMV
This article is about the Opinion of the European Securities and Markets Authority (“ESMA”) on the adoption of additional product intervention measures on Financial Contracts for Difference (“CFDs”) and other high-risk products by the Spanish Comisión Nacional del Mercado de Valores (the “CNMV”) issued on the 11th of July 2023 (the “ESMA’s Opinion”).
- Background and Rationale:
After the completion of the consultation process that the CNMV launched in November 2022 with respect to its intention to introduce additional restrictive measures on the trading of CFDs, the CNMV notified ESMA in May 2023 of its decision to ultimately proceed with the adoption of additional restrictive measures on the trading of both CFDs and certain futures and options (the “High-Risk Products”) in pursuance to its mandate under the Regulation (EU) 600/214 on markets in financial instruments (the “MiFIR”).
The CNMV’s decision, as summarised in ESMA’s Opinion has been based on a multi-faced spectrum of considerations, as outlined below:
- Significant investor protection concerns;
- Degree of complexity, transparency, and the specific features of CFDs and other High-Risk Products;
- Size of potential detrimental consequences and the degree of disparity between the expected return and the risk of loss;
- Selling practices associated with CFDs and other High-Risk Products; and
- Existing EU regulatory requirements did not sufficiently address the risks.
A. Restrictions applying to CFDs:
As far as concerns CFDs, the additional restrictive measures will prohibit their marketing, distribution, sale, and related services by means of advertising communications aimed at retail investors in Spain. More specifically:
I. Prohibition of certain marketing communications, including, inter alia, the following:
- Redirecting to a website that offers CFDs or related services;
- Sending of a contact form, an application download, or any other kind of tool intended to put the client in touch with investment service providers that offer CFDs or related services; and
- Offering of training, technical seminars, courses or sessions whenever such offers are related to CFDs or related services, including training demo accounts or tools for retail investors or which encourage using these, whenever such offers are free or have a token charge, either if they are promoted or held by the regulated entities or by related or affiliated parties.
Exclusions to the prohibition on marketing communications will be applicable when:
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- The provision of information related to CFDs is made in response to a request made upon the sole initiative of the client; and
- The provision of the following kind of information:
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- the one required to contract CFDs or related services that are subject to the measures;
- to perform a transaction regarding CFDs, such as the precontractual and contractual information; and
- the information or warnings regarding the characteristics and risks of CFDs or related services offered that are provided to investors.
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II. Prohibition of any event or organisation sponsorship operation and brand advertising, including:
- the use of public figures, whenever their purpose or effect is to directly or indirectly advertise CFDs or related services; and
- the cases where such sponsorship or brand advertising does not intend to offer such products or services, in particular, when such products or services only account for a small part of the offers on the website of the firm when compared with its general activity.
III. Prohibition of certain marketing practices, including:
- Rewards to customers who provide new retail customers;
- Remuneration to marketing networks or to third parties of which their remuneration is determined based on the number of clients acquired, the cash deposits by clients, the deposits by the entity providing the investment service, or the losses by clients and, in general, any type of remuneration that may come into conflict with the interests of the clients;
- The use and remuneration of collaborators to train new potential clients without these clients having accredited knowledge and experience;
- The use of call centers which contact clients or possible clients to promote the provision of investment services regarding the instruments that are subject to the restriction;
- The use of software in which the remuneration of the software providers is determined based on the cash deposits of clients, or deposits of the distributor or losses of clients;
- The acceptance of credit card payments for cash deposits.
C. Restrictions applying to other High-Risk Products:
As far as concerns other High-Risk Products, the additional restrictive measures subject the marketing, distribution and sale to Retail Clients of other High-Risk Products to the following conditions:
- The provider of the instrument provides initial margin protection by requiring the customer to pay the initial margin; and
- The provider of the instrument will provide margin close-out protection to the Retail Client.
D. ESMA’s conclusions:
ESMA concluded that the CNMV’s proposed national measures are justified and proportionate and encourage national competent authorities (the “NCAs”) to monitor the marketing, sale, and distribution of CFDs and the impact of other High-Risk Products in their national markets to assess whether similar risks for retail investors as those identified by the CNMV exist.
E. CySEC Circular C602:
Further to all of the above, CySEC issued Circular C602 on the 12th of October 2023, for the purposes of informing Cyprus Investment Firms (the “CIFs”) in relation to the Resolution of the CNMV on product intervention measures relating to CFDs and other leveraged products to retail investors in Spain and the corresponding Press Release that were issued during July 2023.
As already mentioned above, the said Resolution forbids the advertisement of CFDs and other leveraged instruments to retail investors as well as certain remuneration policies and sales techniques and establishes intervention measures for the marketing, sale, and distribution to retailers of other leveraged instruments. It is noted that the relevant measures are applicable from the 3rd of August 2023 to all entities authorized to provide investment services in Spain regardless of the origin of the investment firm marketing and distributing such products, or whether there is not a branch in Spain (i.e. including entities under the freedom to provide services without an establishment).
In view of the above, all CIFs that are marketing, distributing, and selling CFDs and other leveraged products to retail investors in Spain are urged by CySEC to take all the appropriate steps and measures in order to ensure their adherence to the CNMV’s Resolution.
In case you have any questions, please do not hesitate to contact us for further professional assistance.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.