News that the European Commission has sent a reasoned opinion to Cyprus for failing to properly implement and enforce EU law on unfair contract terms (Council Directive 93/13/EEC) and unfair commercial practices (Directive 2005/29/EC).
The Commission opened this infringement case in 2013 based on a series of complaints from EU citizens who had bought real estate in Cyprus and had allegedly been misled by real estate developers, banks and lawyers.
The Commission found that the Cypriot authorities were not effectively enforcing either of the two relevant EU Directives.
In the framework of the infringement procedure, the Cypriot authorities responded constructively to several of the concerns raised by the Commission on the transposition and implementation of the two Directives.
However, the matter has not been fully resolved so far; there are still no adequate and effective means in Cyprus to prevent the continued use of unfair terms in consumer contracts.
The decisions of the Cypriot Consumer Protection Service are not enforceable and the Law Office of the Republic fails to follow up on its decisions, as it does not lodge applications for injunctions with the relevant civil courts.
In addition, lawyers are not subject to the rules on unfair commercial practices. Cyprus now has two months to reply to the arguments raised by the Commission. Otherwise, the Commission may decide to refer this case to the European Court of Justice.