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 PapageorgiouUnderstanding Non-Governmental Organizations (NGOs)
Non-governmental organizations (NGOs), also known as civil society organizations, are groups or entities of volunteers that operate independently from any government. These organizations are established to contribute at community, national, or international levels, aiming to fulfill humanitarian purposes or environmental protection goals.
The Legal Framework for Establishing and Maintaining NGOs in Cyprus
In Cyprus, there are three primary options for establishing an NGO: Clubs, Foundations, and non-profit companies limited by guarantee. Clubs and Foundations are governed by the Clubs and Foundations Law (Law 104(I)/2017, as amended), with the latest amendment in 2020. Non-profit companies are regulated under the Cyprus Companies Law, Cap. 113.
If any of these entities are approved by the Council of Ministers of the Republic of Cyprus as a ‘charitable organization,’ their income is exempt from taxation. Donations to such approved organizations may also be tax-deductible under the Law on Income Tax (Law 118(I)/2002), though the tax treatment of donations depends on the laws of the donor’s jurisdiction.
Characteristics and Obligations of Different NGO Structures
Clubs:
- Require at least 20 members to form and must serve public purposes without commercial aims.
- Governed by their constitutional documents and the law, clubs must register with the Ministry of Interior’s Registrar of Clubs.
- Clubs must submit audited accounts annually and report changes in membership and board composition.
Foundations:
- Managed by a minimum of three persons, Foundations must register their incorporation act, detailing their purpose and assets.
- Must hold property valued at no less than €1,000, dedicated to non-profit purposes such as education, health, or environmental protection.
- Foundations are overseen by Commissioners or a Board of Directors and must file annual audited accounts.
Non-Profit Companies Limited by Guarantee:
- Established under the Companies Law, Cap. 113, these companies limit members’ liability to their guaranteed amount.
- Must state non-profit purposes in their memorandum of association and prohibit profit distribution to members.
- Managed by a Board of Directors, these companies must file annual audited accounts with the Registrar of Companies.
Conclusion
Establishing an NGO in Cyprus requires careful consideration of the legal form and compliance with specific regulatory requirements. Each type of entity—Club, Foundation, or non-profit company—offers distinct advantages and obligations. Proper registration and adherence to governance and reporting standards are crucial for maintaining the status and benefits of an NGO in Cyprus.
Should you have any further questions, please do not hesitate to contact us at info@apapageorgiou.com.
Disclaimer: Please note that the information provided above is intended as an overview of the four types of non-profit organizations and should not be regarded as legal advice. To ensure proper understanding and compliance with the specific requirements for registering a non-profit company, society, foundation, or club, it is strongly recommended to seek professional legal advice. 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 PapageorgiouDORA: Why it is relevant & why is it relevant to you?
The Digital Operational Resilience Act (DORA) is a significant development in EU regulation, compelling financial entities to ensure consistent cybersecurity and operational resilience maturity levels across all their operations within the EU. With a two-year preparatory phase, organizations face a significant task of implementation and demonstration of compliance.
To navigate this transition effectively, financial institutions must conduct comprehensive gap assessments to gauge their readiness vis-à-vis DORA, identifying areas necessitating further investment and prioritization. Proactively addressing these gaps positions businesses to meet more complex requirements such as supply risk management, threat intelligence, and advanced security testing, thus gaining a competitive edge in the market.
DORA marks a substantial shift for entities under ESMA or EIOPA supervision and banks already subject to existing EBA guidelines on banking supervision. Moreover, it extends its scope to encompass previously less regulated stakeholders in the financial sector, including crypto-asset service providers, intermediaries managing alternative investment funds, crowdfunding service providers, cloud-service providers, and ICT third-party service providers.
One of DORA’s key focuses is on third-party risk management, necessitating entities to ensure the resilience of their critical ICT third-party service providers. This requires close collaboration and joint efforts to satisfy regulatory expectations, particularly in supporting the delivery of essential business services.
DORA officially entered into force at the beginning of 2023, initiating a two-year implementation period. Financial entities are thus expected to achieve compliance with the regulation by early 2025. As this deadline approaches, proactive engagement with DORA compliance becomes essential to avoid penalties and maintain operational continuity.
In light of these developments, Andria Papageorgiou Law Firm is committed to assisting organizations in navigating the complexities of DORA compliance. With our outsourced DPO services and regulatory compliance consulting, tailored to address the specific requirements of DORA, we ensure that businesses are well-equipped to meet regulatory obligations and uphold operational resilience in an evolving digital landscape.
Contact us today at info@apapageorgiou.com to learn more about how we can support your journey toward DORA compliance.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as financial or investment or 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 PapageorgiouCySEC Circular on EBA Guidelines: Enhancing Anti-Money Laundering Measures for Crypto-Asset Service Providers
We would like to draw your attention to Circular C640 (the “Circular”), issued by the Cyprus Securities and Exchange Commission (the “CySEC”) on the 26th of April 2024, for the purposes of informing Regulated Entities, as these defined therein, about European Banking Authority’s Guidelines amending Guidelines EBA/2021/02 on customer due diligence and the factors credit and financial institutions
should consider when assessing the money laundering and terrorist financing risk associated with individual business relationships and occasional transactions under Articles 17 and 18(4) of Directive (EU) 2015/849 – Guidance to crypto-asset service providers to effectively manage their exposure to ML/TF risks
On January 16, 2024, the European Banking Authority (EBA) extended its Guidelines on ML/TF risk factors to CASPs, signifying a significant stride in the EU’s efforts to combat financial crime. The new Guidelines (EBA/GL/2024/01) underscore ML/TF risk factors and mitigating measures that CASPs need to adopt, recognizing the potential abuse of CASPs for illicit financial activities.
The risks associated with CASPs are manifold, ranging from the rapidity of crypto-asset transfers to the anonymity features embedded in certain products, heightening the susceptibility to ML/TF activities. Hence, CASPS must grasp these risks comprehensively and implement effective measures to mitigate them.
The amended Guidelines serve to equip CASPs with a framework for identifying these risks, offering a non-exhaustive list of factors indicating exposure to varying levels of ML/TF risk. By leveraging these risk factors, CASPs can gain insights into their customer base and pinpoint areas of vulnerability, thereby fine-tuning their mitigating measures, including the use of blockchain analytics tools.
Recognizing the interconnectedness of the financial sector, the Guidelines extend guidance to credit and financial institutions with CASPs as clients or exposure to crypto assets. This risk is exacerbated when institutions engage with unregulated crypto-asset service providers.
In essence, these Guidelines foster a unified understanding of ML/TF risks associated with CASPs and outline the requisite steps for CASPs and other financial institutions to manage these risks effectively. The amended Guidelines will come into effect on December 30, 2024.
In line with its overarching supervisory approach, CySEC urges all Regulated Entities to adhere to the Guidelines and demonstrate the appropriateness of their AML/CFT policies, controls, and procedures in light of identified ML/TF risks, thus ensuring robust measures to combat financial crime.
Should you have any further questions, please do not hesitate to contact us at info@apapageorgiou.com.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as financial or investment or 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 PapageorgiouSupervisory priorities for 2024, targets CIFs providing services on a cross border basis
Should you have any further questions, please do not hesitate to contact us at info@apapageorgiou.com.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as financial or investment or 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.