Bill has emerged against a troubling backdrop of endemic corruption that has eroded public confidence

By Emilios Charalambous, Maria Aristidou and Anastasios Kostekoglou

Cyprus is possibly heading towards comprehensive anti-corruption legislation aimed at establishing unprecedented transparency in public sector financing.

The first version of the bill of ‘Law on Donations and Contributions to the State, Public Entities and Other Bodies and Related Matters of 2025’ proposed by the independent member of Parliament Alexandra Attalides seeks to regulate the provision of donations and contributions so that all included organisations receiving them maintain a public registry with donor details, amounts, and purposes.

The initiative emerges against a troubling backdrop of endemic corruption that has eroded public confidence across Cypriot society. According to the 2025 Rule of Law Report, 90 per cent of Cypriots believe corruption is widespread, significantly higher than the EU average of 69 per cent, while 60 per cent feel personally affected in daily life, compared to just 30 per cent across the European Union.

The business community shares this bleak assessment, with 93 per cent of companies viewing corruption as native to Cyprus and 66 per cent identifying it as a direct barrier to fair competition. Perhaps most concerning is the collapse in confidence regarding enforcement mechanisms: only 15 per cent of the public are convinced that prosecutions effectively deter corruption, and a mere 10 per cent of companies believe that bribery is punished effectively. These figures paint a picture of a jurisdiction where corruption is not merely perceived as prevalent but is seen as operating with virtual impunity.

Background of the bill

The legislative proposal was directly prompted by a controversial donation for the Limassol public garden by a foreign donor who attached conditions to the contribution. The project was substantially altered without fully considering the garden’s historical and architectural value, triggering widespread protests and subsequent court cases.

This incident crystallised long-standing concerns about how unregulated donations can compromise public interest and institutional integrity, demonstrating that the absence of transparency mechanisms allows private interests to reshape public projects according to donor preferences rather than community needs or heritage preservation obligations.

The urgency of reform was further underscored by recent findings from the Audit Office of the Republic which revealed a systematic pattern of donations at the Independent Social Support Body coinciding with commercial interests and regulatory decisions.

The report documented that companies actively negotiating contracts worth €10 million made simultaneous donations totaling €695,750, while shipping companies that had never previously donated suddenly contributed between €200,000 and €900,000 during precisely the period when a decree affecting their tax obligations was being issued. Financial companies under active investigation contributed €10,000 to €50,000, and individuals participating in the citizenship-by-investment scheme contributed €685,000.

The cumulative effect was dramatic: the Independent Social Support Body experienced a 500 per cent revenue increase, surging from €0.5 million to €2.5 million in 2023 and 2024. The temporal correlation between these donations and the donors’ regulatory or commercial interests raised fundamental questions about the integrity of decision-making processes.

The bill proposals:

To address these structural vulnerabilities, the bill is attempting to establish a comprehensive regulatory architecture built on mandatory disclosure, strict eligibility criteria and multi-tiered publication obligations.

Some of the main provisions to preliminarily consider are:

  • Article 4, which mandates that every obligated entity including all state services, ministries, public and private law entities, local authorities and organisations receiving donations, must maintain a Donations and Contributions Registry, with all donations published within three days of receipt.
  • Article 6, specifying the precise content that must be recorded in the registry, establishing a dual standard based on donor type
  • Article 5, which introduces substantive eligibility requirements that donors contributing €5.000 or more must satisfy before their donations can be accepted, including but not being limited to:
    • Complete maintenance of tax records;
    • Clean criminal records;
    • Industry related prohibitions;
  • The publication framework established by Article 7 creates disclosure obligations calibrated to donation size, for different obligations for donations of €5,000 or more and donations exceeding €50,000.
  • Article 8 establishes an enforcement mechanism authorising the finance minister to impose administrative fines reaching up to three times the difference between €5,000 and the donation value for violations.

According to the finance ministry, existing Law 38(I) of 2014 already requires the finance minister to approve donations to the central government. Last year, approximately 100 small donations were reviewed, with the smallest being just €140. The ministry emphasised that current practice involves ensuring public benefit and confirming that no obligations to the donor arise from acceptance. However, the ministry’s statement implicitly concedes that while current mechanisms work for small donations, they have failed to adequately detect or prevent large contributions, often amounting to hundreds of thousands of euros, that coincide with regulatory or procurement decisions.

This legislative initiative can possibly represent Cyprus’ formal commitment to confronting systemic corruption through a combination of mandatory disclosure, strict donor eligibility criteria, multi-level publication requirements, and meaningful oversight mechanisms.

Whether the legislation, if enacted, will prove sufficient to reverse deeply entrenched patterns remains to be determined, but its adoption will signal recognition at the highest levels that the status quo has become untenable and that fundamental structural reform is both necessary and overdue.

Emilios Charalambous and Maria Aristidou are associates and Anastasios Kostekoglou is a trainee at Elias Neocleous & Co LLC