Filenews 8 December 2024 - by Eleftheria Paizanou
Even one cent to be owed, either to the state, to local authorities, to EAC or Cyta, to banks, to credit acquiring companies, will immediately be recorded in the Register of Recording and Monitoring of Liabilities of natural and legal persons.
This register will be implemented in the context of the implementation of the Recovery and Resilience Plan, through which the Republic will receive an amount of €1.2 billion by the end of 2026. The procedures, which are under the umbrella of the General Accounting Office of the Republic, are already running, so that the registry can operate within the time targets set.
Circular
According to a circular of the Treasury, the creation of this register will contribute to the fair and accurate recording of public and private debt of natural and legal persons, in a way that will contribute to the protection of both the proper functioning of the financial system and the public sector.
As highlighted in the circular, signed by the Accountant General Andreas Antoniadis, the implementation of the registry will be done by extracting data (amounts receivable and identification data), by directly connecting the government information warehouse (CAP) with various departments of the state.
Data will also be collected through the CIR interface and data extraction from the Treasury's year-end platform.
At the same time, it is clarified that this platform is used to collect data for the preparation of the statement of financial position on the basis of accruals.
At the same time, he points out that for the purpose of implementing the specific reform included in the Cypriot Recovery Plan, the platform will draw the receivable amounts from the debtors' identification data.
Specific guidelines are also set for filling in debtors' details. The Treasury has already issued instructions for filling in the debtor identification fields that users of the platform should apply, so that it is possible to correctly identify debtors when extracting data through the interconnection with the Central Information Warehouse.
"Users of the platform of the Treasury of the Republic are encouraged to start collecting the necessary information for its proper registration on the platform at the close of 2924," he adds. In conclusion, he underlines that the deadline for completing and submitting the relevant form of the General Accounting Office will be April 4, 2025.
Targeted policies
Based on the provision included in the Recovery Plan, the aim of the register will be to improve the authorities' capacity to design and implement targeted policies for the prevention and management of private debt.
Under the reform, an action plan will be implemented that includes the design and development of a register of credit obligations for reporting, decision-making and policy-making, including the production of individual liability reports. The implementation of the reform will be completed by 31 December 2024.
The stages of implementation
According to government plans, the register will be implemented in three phases:
– In the first phase, there will be "collection and analysis of obligations of persons towards the State at central government level (e.g. Income Tax, Social Insurance, Registrar of Companies, Department of Road Transport, Cadastre, etc.)".
– In the second phase, "obligations of persons towards credit institutions and credit acquiring companies will be added (by extracting data from the Artemis database)".
– In the third phase, "obligations of persons towards Local Government Authorities (e.g. municipalities, semi-governmental organizations) will be added.
It is recalled that, a few months ago, the Parliament had approved the release of a fund allocated for the preparation of a study by a specific company.
In a clarification note, the Ministry of Finance states that the register is part of axis 3.5 of the Recovery Plan, with the overall objective of ensuring financial stability by reducing risks in the banking sector, introducing measures against high private debt and improving supervision in the non-bank sector.
It is also emphasized that the aim of the reform is to develop/create a register that will record liabilities, especially monetary debts of natural and legal persons on a pseudonymised basis. The debts will cover liabilities to the State, credit institutions (including credit acquiring companies), local authorities, and public utilities in order to provide the Ministry of Finance with a comprehensive picture of private debt in a grouped picture which is particularly important and useful for the competent authorities, in particular for the Ministry of Finance, in order to formulate the appropriate policy to ensure the sustainability of private public debt by improving the authorities' ability to design and implement targeted policies to manage the stock of private debt.
Legal weakness: high private debt
At the same time, the Ministry of Finance points out that high private debt is a structural weakness of the Cypriot economy and weighs on growth rates and the creation of new jobs.
It also indicates that the creation of this register will contribute to the fair and accurate recording of the private debt of natural and legal persons, in a way that contributes to the protection of both the proper functioning of the economy at large. In addition, he points out that this reform is expected to receive a positive response from international rating agencies and international organizations, which stress over time that monitoring and further reducing private debt is a necessary condition for upgrading the creditworthiness of the Republic of Cyprus.
Finally, he emphasizes that access to this register will be shared between the Ministry of Finance and the Central Bank. It concludes that "access to this register will concern exclusively pseudonymised data and which will therefore not be identifiable to the relevant officers who will process the said data".
