Author: Paschalis Paschali

Abstract:

This article attempts to critically examine the legal protection that the traditional cheese of Cyprus named halloumi could receive in the field of intellectual property law in the light of the European Union law and, in particular, under the status of Protected Designation of Origin and the status of Protected Geographical Indication. Crucial to the issue is the Regulation 1151/2012, which establishes the framework and the content of protection that halloumi can receive under the abovementioned schemes.

Keywords:
Protected Designation of Origin – Protected Geographical Indication – Halloumi – Traditional Cheese

I. Introduction

It is undeniable that the European Union (EU) has a common geographical policy, with significant benefits in regards to the quality of European products and to European producers and consumers. These policies derived from the Regulation 2017/1001 on the EU trademark and the Regulation 1151/2012 on quality schemes for agricultural products and foodstuffs. The analysis of this article will be based on the abovementioned regulations.

II. Regulation 1151/2012 on quality systems for agricultural products and food 

With the enactment of the Regulation 1151/2012 (hereinafter referred to as the “Regulation”) and taking into account the increased demand of European consumers for agricultural products and high quality food with specific characteristics associated with a certain geographical origin, the European legislator, guided by both the benefit of farmers and producers as well as the benefit of consumers, seeks to establish rules for the disclosure of these specific characteristics. The Regulation, starting with the strongest protection and ending with the least strong, introduces four different systems of protection of agricultural products and food: the system of Protected Designation of Origin (PDO), the system of Protected Geographical Indications (PGI), the system of Traditional speciality guaranteed (TSG) and the system of Optional Quality Terms (OQT). For the purposes of this article, an analysis of the first two systems will follow.

A. Protected Designation of Origin and Protected Geographical Indications Systems

The Regulation establishes an integrated system for the application, registration, use, protection and official control of PDOs and PGIs in the EU in order to prevent misuse, counterfeiting or other false or misleading indication of protected products. The products that fall within the concept of PDO and PGI are occupied by a cultural dimension and are enriched with the idea that they differ from the common products, since their reputation derives from their geographical origin. In other words, they are inextricably linked to their place of origin, as there is an essential link between their characteristics and their geographical origin. 

In particular, the PDO and PGI systems aim to ensure fair performance for farmers and producers in terms of quality data and characteristics of a given product or method of production, and to provide clear information on products with particular characteristics related to geographical origin, so that consumers are better informed when choosing products during the purchase process. The protection of PDOs and PGIs is provided through a registration system.

It is noted that the definitions of PDO and PGI under Article 5 of the Regulation are similar. In particular, both systems have the same function of identifying a product as coming from a specific place. However, there are specific differences that give PDO products more protection than PGI products.

Specifically, products identified as PDOs have stronger links with their place of origin, since all stages of their production must take place there. It is emphasized that PDO products are strongly associated with specific areas, in which there are special natural or human factors. Natural and human factors take the form of a number of variables such as climate, geological and hydrological aspects, processing methods, technical knowledge, traditional skills and local customs. Likewise, the source of inspiration for the PDO system is the need for consumer protection. Therefore, the PDO regime imposes strict requirements, which are stated in the product specifications.

On the contrary, PGI products have a looser connection to a specific location, despite the wording that the products must have a specific quality, reputation or other characteristics attributed to the geographical origin, as to qualify a product as a PGI product, only one phase is enough of its production to be performed in the relevant area. Therefore, the raw materials may not come from this area. At the same time, the reputation factor alone is sufficient to justify protection as a PGI. 

Despite the aforementioned differences in the specifications for the award of a product as a PDO or as a PGI, it is argued that in practical application there are no substantial differences between the mentioned systems regarding their specificity and quality. It is suggested, that the separation of the two should be lifted. 

For the sake of completeness, it should be noted that six hundred forty-two PDOs and seven hundred fifty-six PGI have been registered throughout the EU. Regarding the Cypriot production, the PDO has already been registered “Kolokasi Sotiras / kolokasi- poules sotiras” while as PGI are considered the ” Glyko Triantafyllo Agrou”, the “Paphiko loukaniko”, the “Koufeta amygdalou Geroskipou” and the “loukoumi Geroskipou”.

A.1 Greek feta cheese as a product of PDO

It is a fact that the majority of product names that enjoy PDO protection are related to the geographical name of the region in which they are produced. Indicative examples are the Greek products “Pefkothymaromelo Kritis”, “Galano Metaggitsiou Halkidikis”, “Tomataki Santorinis”, “Prasines Elies Halkidiki”, “Fava Santorinis” and “Stafida Zakynthou”. However, names that are not direct geographical names can also be registered as PDO, such as, the name “feta” as a cheese from Greece.

With regard to the name “feta”, there has been intense controversy and speculation as to whether this name is considered “generic”, ie whether it is a common name for the type of cheese. Pursuant to Article 3 of the prior Council Regulation (EEC) No 2081/92 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs, the common name was considered to be the name of an agricultural product or a food which, although it refers to the place or area where the agricultural product or food in question was originally produced or marketed, has now become the common name of an agricultural product or food. The outcome of the feta decision was crucial. The Court of Justice of the EU (hereinafter referred to as “CoJ”) has ruled that although “feta” and similar expressions do not in themselves constitute a region, they can be registered as PDOs if consumers associate the product with that region of production. The CoJ has taken into account various data on the consumption of the aforementioned product in the Member States (hereinafter referred to as “MS”), which indicate that the name “feta” does not have a common name and can therefore be treated as a PDO. A key factor taken into account by the CoJ in deciding in favor of PDO protection was the fact that a significant proportion of European consumers, in fact, perceived “feta” as a cheese associated with Greece, even if it was actually produced in another MS. At the same time, the CoJ took into account that in other MS, except Greece, feta is usually available in the trade with labels that refer to Greek cultural traditions and Greek culture.

For this reason, the Attorney General, Dāmaso Ruiz-Jarabo Colomer, argued that the memory of the past influences the assessment of whether a name is perceived as common, mainly in order to determine whether that name has always been common. In the present case, the historical background was of great importance since it seems that, already from the Homeric epics, the presence of cheese in Ancient Greece was important.

Furthermore, the CoJ took into account that in Greek legislation the name “feta” is recognized as a PDO for white brine cheese traditionally produced in Greece from sheep’s milk or a mixture of it with goat and exclusively in the regions of Macedonia, Thrace, Epirus, Thessaly, Central Greece, Peloponnese, as well as the Prefecture of Lesvos. There was, therefore, a clearly demarcated area for feta production that includes exclusively the mainland of Greece, as well as the Prefecture of Lesvos. For all the above reasons, the CoJ concluded that the name “feta” is not of a general nature, with the consequence that cheese producers outside the specified area are not allowed to refer to their product as “feta cheese” or “feta”.

A.2 The Cypriot cheese “Halloumi” (“Halloumi) /” Hellim “as a product of Protected Designation of Origin

Regarding the use of the name” Halloumi “(Halloumi) /” Hellim “, it is important to note that since 2014 the process for its establishment as PDO exclusively for cheese produced by Cypriot producers is pending. At the same time, the Republic of Cyprus, as well as other entities such as the Cyprus Dairy Industry Organization and the Foundation for the Protection of Traditional Cypriot Cheese called Halloumi (hereinafter referred to as the “Foundation”) are making efforts to prevent some companies from using the name “halloumi” as a trademark. An example is the Case C-766/18, which shows the Foundation’s attempt (which owns the European collective mark “HALLOUMI”) to prevent a Bulgarian company from registering a figurative mark which also concerns cheece and contains the word “BBQLOUMI”.

It is worth noting that the Secretary-General, Juliane Kokott, defends the position of both the EUIPO (EU Intellectual Property Office) and the EU General Court, arguing that the distinctive character of the term “HALLOUMI” is weak because it describes that cheese. Therefore, despite some similarities between the terms “HALLOUMI” and “BBQLOUMI”, the use of the latter name does not pose a risk of being associated by the public with the producers who are members of the Foundation. However, the decision of the General Court was overturned by the CoJ on 5 March 2020, according to which the fact that the distinctive character of an earlier mark is weak does not preclude the likelihood of confusion. As a result, the decision was referred back to the General Court in order to make a comprehensive assessment of the risk of confusion, which should take into account all the critical factors and their interdependence.

Interesting is the comparison of the collective mark “DARJEELING” with the collective mark “HALLOUMI” by AG Juliane Kokott, who noted that the collective mark “DARJEELING” is an excellent example of the application of the collective European mark because it corresponds to a city name and region of India and at the same time is identified with the famous black tea grown there. In contrast, the mark “HALLOUMI” does not correspond to a specific place name, but can only be associated with one place, ie Cyprus, and this is questionable since it seems that such cheeses are produced in other countries, often under the same or similar names. It is argued that the enjoyment of the PDO system is given to an entire country only “in exceptional cases” and especially when the MS is small. Through this comparison, it could reasonably be said that there would be a better chance of the application being approved for the name “Halloumi” / “Hellim”as PDO, if the product with this name was restricted to specific areas of the Republic of Cyprus and not in its entire territory.  In case of failure to register halloumi as a PDO, the Republic of Cyprus may take the appropriate measures in order to protect the product in question under the PGI regime. However, the provision of protection under this regime will be of less scope, as the product will have a weak connection with the Republic of Cyprus and this will result in the encouragement of foreign producers to reap the reputation of the product with the only obligation to carry out only one stage of the production within the demarcated area. 

III. Summary

It is considered indisputable that the EU has developed an important system for the protection of European products. However, intense controversy is observed, in the effort to secure absolute protection for the benefit of the cheese “Halloumi” from the Republic of Cyprus and from Cypriot organizations and institutions. As a result of the above, the Republic of Cyprus must immediately proceed with actions that ensure the strong protection of halloumi. It has the obligation to intensify the political negotiations and to collect the necessary data that prove the origin of the product in question, in order to be approved as a PDO or as a PGI. At the same time, through political initiatives, it should conclude bilateral agreements with EU Member States and third States, which will recognize the Cypriot origin of Halloumi and will ensure the shielding of its quality and consequently the Cypriot tradition. 

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The above article can also be found in Greek by clicking here.

Ηλιάνα Νικολαΐδου, Δικηγόρος – Ιωαννίδης Δημητρίου ΔΕΠΕ

Abstract:

Το παρόν άρθρο επιχειρεί να εξετάσει, από κριτική σκοπιά, τη νομική προστασία που μπορεί να λάβει το κυπριακό παραδοσιακό τυρί χαλλούμι στο δίκαιο της διανοητικής ιδιοκτησίας υπό το πρίσμα του δικαίου της Ευρωπαϊκής Ένωσης και, συγκεκριμένα, υπό το καθεστώς της Προστατευόμενης Ονομασίας Προέλευσης και το καθεστώς της Προστατευόμενης Γεωγραφικής Ένδειξης. Καθοριστικής σημασίας επί του ζητήματος είναι ο Κανονισμός 1151/2012, ο οποίος καθιερώνει το πλαίσιο και το περιεχόμενο της προστασίας που μπορεί να λάβει το συγκεκριμένο προϊόν υπό τα προαναφερθέντα καθεστώτα.

Λέξεις κλειδιά:
Προστατευόμενη Ονομασία Προέλευσης – Προστατευόμενη Γεωγραφική Ένδειξη – Χαλλούμι – Τυρί

     I.        Εισαγωγή

Είναι αδιάψευστο, ότι η Ευρωπαϊκή Ένωση (ΕΕ) έχει χαράξει μια κοινή γεωγραφική πολιτική, η οποία επιφέρει σημαντικά οφέλη στην ποιότητα των ευρωπαϊκών προϊόντων και στους ευρωπαίους παραγωγούς και καταναλωτές. Καρποί της εν λόγω πολιτικής ορίζονται ο Κανονισμός 2017/1001 για το σήμα της ΕΕ[i] και ο Κανονισμός 1151/2012 για τα συστήματα ποιότητας των γεωργικών προϊόντων και τροφίμων της ΕΕ υπό το πρίσμα των οποίων θα βασιστεί η ανάλυση του παρόντος άρθρου.[ii]

    II.        Ο Κανονισμός 1151/2012 για τα συστήματα ποιότητας των γεωργικών προϊόντων και τροφίμων

Με τον Κανονισμό 1151/2012 (εφεξής ως ο «Κανονισμός») και λαμβάνοντας υπόψη την αυξημένη ζήτηση των Ευρωπαίων καταναλωτών για γεωργικά προϊόντα και τρόφιμα υψηλής ποιότητας με ιδιαίτερα χαρακτηριστικά που συνδέονται με ορισμένη γεωγραφική προέλευση, ο Ευρωπαίος νομοθέτης, με γνώμονα τόσο το όφελος των γεωργών και των παραγωγών, όσο και το όφελος των καταναλωτών, επιδιώκει τη θέσπιση κανόνων γνωστοποίησης των συγκεκριμένων ιδιαίτερων χαρακτηριστικών.[iii] Ο Κανονισμός, εκκινώντας από την ισχυρότερη προστασία και καταλήγοντας στην λιγότερο ισχυρή, καθιερώνει τέσσερα διαφορετικά συστήματα προστασίας των γεωργικών προϊόντων και τροφίμων: το σύστημα Προστατευόμενης Ονομασίας Προέλευσης[iv] (ΠΟΠ), το σύστημα των Προστατευόμενων Γεωγραφικών Ενδείξεων[v] (ΠΓΕ), το σύστημα των Εγγυημένων Παραδοσιακών Ιδιότυπων Προϊόντων[vi] (ΕΓΙΠ) και το σύστημα των Προαιρετικών Ενδείξεων Ποιότητας[vii] (ΠΕΠ). Για τους σκοπούς του παρόντος άρθρου, θα ακολουθήσει ανάλυση των δύο πρώτων συστημάτων.

A.   Συστήματα Προστατευόμενης Ονομασίας Προέλευσης και Προστατευόμενων Γεωγραφικών Ενδείξεων

Ο Κανονισμός διαμορφώνει ένα ολοκληρωμένο σύστημα για την εφαρμογή, την καταχώριση, τη χρήση, την προστασία και τον επίσημο έλεγχο των ΠΟΠ και ΠΓΕ στην ΕΕ, ώστε να αποφευχθεί η κατάχρηση, απομίμηση ή άλλη ψευδής ή παραπλανητική ένδειξη των προστατευόμενων προϊόντων.[viii] Τα προϊόντα που εμπίπτουν εντός της έννοιας των ΠΟΠ και ΠΓΕ διακατέχονται από μια πολιτιστική διάσταση και εμπλουτίζονται με την ιδέα ότι διαφέρουν από τα κοινά προϊόντα, αφού η φήμη τους πηγάζει από τη γεωγραφική τους προέλευση.[ix] Είναι δηλαδή,  άρρηκτα συνδεδεμένα με τον τόπο καταγωγής τους, καθότι, υπάρχει ένας ουσιαστικός δεσμός μεταξύ των χαρακτηριστικών τους και της γεωγραφικής τους προέλευσης.[x]

Ειδικότερα, τα συστήματα ΠΟΠ και ΠΓΕ αποσκοπούν στην εξασφάλιση δίκαιης απόδοσης για τους γεωργούς και τους παραγωγούς, όσον αφορά τα στοιχεία ποιότητας και τα χαρακτηριστικά δεδομένου προϊόντος ή του τρόπου παραγωγής του, και την παροχή σαφούς πληροφόρησης για προϊόντα με ιδιαίτερα χαρακτηριστικά συνδεόμενα με τη γεωγραφική προέλευση, ώστε οι καταναλωτές να είναι καλύτερα ενημερωμένοι όταν επιλέγουν τα προϊόντα κατά τη διαδικασία αγοράς.[xi] Η προστασία δε, των ΠΟΠ και ΠΓΕ παρέχεται μέσω ενός συστήματος καταχώρισης.[xii]

Παρατηρείται ότι οι κατ’ άρθρο 5 του Κανονισμού ορισμοί των εννοιών ΠΟΠ και ΠΓΕ είναι παρόμοιοι. Ειδικότερα, και τα δύο συστήματα έχουν την ίδια λειτουργία αναγνώρισης ενός προϊόντος ως προερχόμενου από συγκεκριμένο τόπο.[xiii] Ωστόσο, υπάρχουν συγκεκριμένες διαφορές, οι οποίες προσδίδουν στα προϊόντα ΠΟΠ μεγαλύτερη προστασία συγκριτικά με τα προϊόντα ΠΓΕ.

Συγκεκριμένα, τα προϊόντα που αναγνωρίζονται ως ΠΟΠ, έχουν ισχυρότερους δεσμούς με τον τόπο από τον οποίο κατάγονται[xiv] αφού όλα τα στάδια παραγωγής τους πρέπει να πραγματοποιούνται σε αυτόν.[xv] Τονίζεται δε, ότι τα προϊόντα ΠΟΠ συνδέονται έντονα με συγκεκριμένες περιοχές, στις οποίες ενυπάρχουν ιδιαίτεροι φυσικοί ή ανθρώπινοι παράγοντες.[xvi] Οι φυσικοί και ανθρώπινοι παράγοντες λαμβάνουν τη μορφή μιας σειράς μεταβλητών στοιχείων όπως το κλίμα, οι γεωλογικές και υδρολογικές πτυχές, οι μέθοδοι επεξεργασίας, οι τεχνικές γνώσεις, οι παραδοσιακές δεξιότητες και τα τοπικά έθιμα.[xvii] Εξίσου, η πηγή έμπνευσης του συστήματος των ΠΟΠ είναι η ανάγκη  προστασίας των καταναλωτών.[xviii] Ως εκ τούτου, το καθεστώς των ΠΟΠ επιβάλλει αυστηρές απαιτήσεις, οι οποίες εκπονούνται στις προδιαγραφές των προϊόντων.[xix]

Αντιθέτως, τα προϊόντα ΠΓΕ έχουν μία πιο χαλαρή σύνδεση με συγκεκριμένη τοποθεσία,[xx] παρά τη διατύπωση ότι τα προϊόντα πρέπει να έχουν συγκεκριμένη ποιότητα, φήμη ή άλλα χαρακτηριστικά που αποδίδονται στη γεωγραφική προέλευση,[xxi] καθώς για να χαρακτηριστεί ένα προϊόν ως προϊόν ΠΓΕ, αρκεί μία μόνο φάση της παραγωγής του να εκτελείται στην σχετική περιοχή. Συνεπώς, είναι δυνατό οι πρώτες ύλες να μην προέρχονται απ’ αυτή την περιοχή.[xxii] Παράλληλα, μόνο ο παράγοντας της φήμης είναι αρκετός για να δικαιολογήσει την προστασία ως ΠΓΕ.

Παρά τις προαναφερόμενες διαφοροποιήσεις στις προδιαγραφές κατακύρωσης ενός προϊόντος ως ΠΟΠ ή ως ΠΓΕ, διατυπώνεται και η γνώμη πως στην πρακτική εφαρμογή δεν υφίστανται ουσιαστικές διαφορές μεταξύ των αναφερόμενων συστημάτων σχετικά με την ιδιαιτερότητα και την ποιότητά τους. Προτείνεται, μάλιστα, ότι ο διαχωρισμός των δύο πρέπει να αρθεί.

Για λόγους πληρότητας, αναφέρεται πως έχουν καταχωρηθεί εξακόσια σαράντα δύο ΠΟΠ και εφτακόσια πενήντα έξι ΠΓΕ σ’ ολόκληρη την ΕΕ.[xxiii] Όσον αφορά την κυπριακή παραγωγή, ως ΠΟΠ έχει ήδη καταχωρηθεί το «κολοκάσι Σωτήρας / κολοκάσι – πούλλες Σωτήρας», ενώ ως ΠΓΕ θεωρούνται το «γλυκό τριαντάφυλλου Αγρού», το «παφίτικο λουκάνικο», η «κουφέτα αμυγδάλου Γεροσκήπου» και το «λουκούμι Γεροσκήπου».[xxiv]

Α.1. Ελληνικό τυρί «φέτα» ως προϊόν Προστατευόμενης Ονομασίας Προέλευσης

Είναι γεγονός, ότι η πλειοψηφία των ονομασιών προϊόντων που απολαμβάνουν την προστασία των ΠΟΠ σχετίζονται με τη γεωγραφική ονομασία της περιοχής που παράγονται. Ενδεικτικά παραδείγματα αποτελούν τα ελληνικά προϊόντα Πευκοθυμαρόμελο Κρήτης, Γαλανό Μεταγγιτσίου Χαλκιδικής, Τοματάκι Σαντορίνης, Πράσινες Ελιές Χαλκιδικής, Φάβα Σαντορίνης και Σταφίδα Ζακύνθου.[xxv] Ωστόσο, ως ΠΟΠ δύνανται να καταχωρηθούν και ονομασίες που δεν αποτελούν άμεσες γεωγραφικές ονομασίες, όπως για παράδειγμα, η ονομασία «φέτα» ως τυρί προερχόμενο από την Ελλάδα.[xxvi]

Όσον αφορά την ονομασία «φέτα», υπήρξε έντονη διαμάχη και προβληματισμός κατά πόσον αυτό το όνομα θεωρείται ως «γενικό», δηλαδή αν είναι μια κοινή ονομασία για το είδος του τυριού.[xxvii] Δυνάμει δε, του άρθρου 3 του προγενέστερου Κανονισμού (ΕΟΚ) 2081/92 του Συμβουλίου, της 14ης Ιουλίου 1992, για την προστασία των γεωγραφικών ενδείξεων και των ονομασιών προέλευσης των γεωργικών προϊόντων και των τροφίμων, ως κοινή ονομασία θεωρείτο το όνομα ενός γεωργικού προϊόντος ή ενός τροφίμου το οποίο αν και αναφέρεται στον τόπο ή την περιοχή όπου το εν λόγω γεωργικό προϊόν ή τρόφιμο έχει παραχθεί αρχικά ή εμπορευθεί, έχει πλέον καταστεί κοινό όνομα ενός γεωργικού προϊόντος ή ενός τροφίμου. Το πόρισμα της απόφασης για τη φέτα[xxviii] ήταν καθοριστικής σημασίας. Το Δικαστήριο της ΕΕ (εφεξής ως «ΔΕΕ») αποφάνθηκε ότι παρά το γεγονός ότι η «φέτα» και παρόμοιες εκφράσεις δεν συνιστούν αφ’ εαυτών μια περιοχή, μπορούν να καταχωρηθούν ως ΠΟΠ εάν οι καταναλωτές συνδέουν το προϊόν με την συγκεκριμένη περιοχή παραγωγής. Το ΔΕΕ συνυπολόγισε διάφορα στοιχεία σχετικά με την κατανάλωση του προαναφερόμενου προϊόντος στα Κράτη Μέλη (εφεξής ως «ΚΜ»), τα οποία υποδηλώνουν ότι η ονομασία «φέτα» δεν έχει χαρακτήρα κοινής ονομασίας[xxix] και, επομένως, δύναται να αντιμετωπιστεί ως ΠΟΠ. Βασικός παράγοντας που ελήφθη υπόψη από το ΔΕΕ για να αποφασίσει υπέρ της παροχής προστασίας ΠΟΠ, αποτέλεσε το γεγονός ότι σημαντικό μέρος των Ευρωπαίων καταναλωτών, στην πραγματικότητα, αντιλαμβάνονταν την «φέτα» ως τυρί συνδεόμενο με την Ελλάδα,[xxx] έστω και αν στην πραγματικότητα είχε παραχθεί σε άλλο ΚΜ.[xxxi] Παράλληλα, το ΔΕΕ συνεκτίμησε ότι στα άλλα ΚΜ, πλην της Ελλάδας, η φέτα διατίθεται συνήθως στο εμπόριο με ετικέτες που παραπέμπουν στις ελληνικές πολιτιστικές παραδόσεις και στον ελληνικό πολιτισμό.[xxxii]

Για το λόγο αυτό, ο Γενικός Εισαγγελέας, Dāmaso Ruiz-Jarabo Colomer, υποστήριξε πως η μνήμη του παρελθόντος επιδρά στην εκτίμηση του κατά πόσον μια ονομασία προσλαμβάνεται ως κοινή, κυρίως προκειμένου να καθοριστεί αν η ονομασία αυτή ανέκαθεν υπήρξε κοινή. Στην υπό κρίση υπόθεση, η ιστορική αναδρομή είχε μεγάλη σημασία αφού φαίνεται πως, ήδη από τα Ομηρικά έπη, η παρουσία του τυριού στην Αρχαία Ελλάδα ήταν σημαντική.

Περαιτέρω, το ΔΕΕ έλαβε υπόψη ότι στην ελληνική νομοθεσία η ονομασία «φέτα» αναγνωρίζεται ως ΠΟΠ για το λευκό τυρί άλμης που παράγεται παραδοσιακά στην Ελλάδα από γάλα πρόβειο ή μίγμα αυτού με γίδινο και αποκλειστικά στις περιοχές Μακεδονίας, Θράκης, Ηπείρου, Θεσσαλίας, Στερεάς Ελλάδας, Πελοποννήσου και του Νομού Λέσβου.[xxxiii] Υπήρξε επομένως, μια σαφώς οριοθετούμενη περιοχή για την παραγωγή της φέτας που περιλαμβάνει αποκλειστικά το ηπειρωτικό τμήμα της Ελλάδας, καθώς και τον Νομό Λέσβου.[xxxiv] Για όλους λοιπόν τους προαναφερόμενους λόγους, το ΔΕΕ κατέληξε στο συμπέρασμα ότι η ονομασία «φέτα» δεν είναι γενικής φύσης, με συνέπεια να μην επιτρέπεται σε παραγωγούς τυριών εκτός της καθορισμένης περιοχής να αναφέρουν το προϊόν τους ως «τυρί φέτα» ή «φέτα».[xxxv]

Α.2. Το Κυπριακό τυρί «Χαλλούμι» (Halloumi) / «Hellim» ως προϊόν Προστατευόμενης Ονομασίας Προέλευσης

Όσον αφορά την χρήση ονομασίας «Χαλλούμι» (Halloumi)/«Hellim», είναι σημαντικό να λεχθεί ότι από το 2014 εκκρεμεί η διαδικασία για την καθιέρωσή της ως ΠΟΠ αποκλειστικά για τυρί που παράγεται από κύπριους παραγωγούς, χωρίς ωστόσο η εν λόγω διαδικασία να έχει μέχρι σήμερα ολοκληρωθεί. Ταυτοχρόνως, η Κυπριακή Δημοκρατία αλλά και άλλες οντότητες όπως ο Οργανισμός Κυπριακής Γαλακτοκομικής Βιομηχανίας και το Ίδρυμα Προστασίας του Παραδοσιακού Τυριού της Κύπρου ονομαζόμενου χαλλούμι (εφεξής ως «Ίδρυμα»), καταβάλλουν προσπάθειες για να εμποδίσουν ορισμένες εταιρίες να κάνουν χρήση της ονομασίας «halloumi» ως σήμα.[xxxvi] Παράδειγμα αποτελεί η υπόθεση C-766/18 στην οποία διαφαίνεται η προσπάθεια του Ιδρύματος, στο οποίο  ανήκει το ευρωπαϊκό συλλογικό σήμα «HALLOUMI», να εμποδίσει βουλγαρική εταιρία να κατοχυρώσει εικονιστικό σήμα που επίσης, αφορά τυρί και περιέχει τη λέξη «BBQLOUMI».[xxxvii]

Αξίζει να αναφερθεί ότι η ΓΕ, Juliane Kokott, ασπάζεται τη θέση τόσο του EUIPO (Γραφείο Διανοητικής Ιδιοκτησίας της ΕΕ) όσο και του Γενικού Δικαστηρίου της ΕΕ, σύμφωνα με την οποία υποστηρίζεται ότι ο διακριτικός χαρακτήρας του όρου «HALLOUMI» είναι ασθενής, επειδή περιγράφει το εν λόγω τυρί.[xxxviii] Επομένως, παρά την κάποια ομοιότητα των όρων «HALLOUMI» και «BBQLOUMI», η χρήση του τελευταίου ονόματος δεν εμπεριέχει κίνδυνο να συσχετιστεί από το ενδιαφερόμενο κοινό με τους παραγωγούς που αποτελούν μέλη του Ιδρύματος.[xxxix] Ωστόσο, η απόφαση του ΓΔΕΕ, ανατράπηκε από το ΔΕΕ στις 5 Μαρτίου του 2020,[xl] σύμφωνα με το οποίο, το γεγονός ότι ο διακριτικός χαρακτήρας προγενέστερου σήματος είναι ασθενής δεν αποκλείει την ύπαρξη κινδύνου συγχύσεως. Συνεπεία αυτού, αναπέμφθηκε η απόφαση πίσω στο ΓΔΕΕ έτσι ώστε να προβεί σε σφαιρική εκτίμηση του κινδύνου συγχύσεως, η οποία θα πρέπει να λαμβάνει υπόψη το σύνολο των κρίσιμων παραγόντων και τη μεταξύ τους αλληλεξάρτηση.

Ενδιαφέρουσα δε, κρίνεται η σύγκριση του συλλογικού σήματος «DARJEELING» με το συλλογικό σήμα «HALLOUMI» από την ΓΕ Juliane Kokott, η οποία σημείωσε ότι το συλλογικό σήμα «DARJEELING» αποτελεί ένα έξοχο παράδειγμα εφαρμογής του συλλογικού ευρωπαϊκού σήματος επειδή αντιστοιχεί σε όνομα πόλης και περιοχής της Ινδίας και ταυτοχρόνως ταυτίζεται με το φημισμένο μαύρο τσάι που καλλιεργείται εκεί.[xli] Σε αντιδιαστολή, το σήμα «HALLOUMI» δεν αντιστοιχεί σε ονομασία συγκεκριμένου τόπου, αλλά δύναται να συσχετισθεί μόνον με έναν τόπο, δηλαδή με την Κύπρο, και αυτό υπό αμφισβήτηση αφού φαίνεται πως τέτοιου είδους τυριά παράγονται και σ’ άλλες χώρες, συχνά υπό τις ίδιες ή παρόμοιες ονομασίες.[xlii] Υποστηρίζεται δε, πως η απόλαυση του συστήματος ΠΟΠ δίδεται σε μια ολόκληρη χώρα μόνο «σε εξαιρετικές περιπτώσεις» και κυρίως όταν το ΚΜ είναι μικρού μεγέθους.[xliii] Διαμέσου αυτής της σύγκρισης, εύλογα θα μπορούσε να λεχθεί ότι θα υπήρχαν μεγαλύτερες πιθανότητες έγκρισης της αίτησης για την ονομασία «Χαλλούμι» (Halloumi) / «Hellim» ως ΠΟΠ, εάν το προϊόν με την εν λόγω ονομασία περιοριζόταν σε συγκεκριμένες περιοχές της Κυπριακής Δημοκρατίας και όχι σ’ όλη την επικράτειά της.

Σε περίπτωση δε αποτυχίας για καταχώρηση του χαλλουμιού ως ΠΟΠ, η Κυπριακή Δημοκρατία μπορεί να λάβει τα κατάλληλα μέτρα προκειμένου να προστατεύσει το εν λόγω προϊόν υπό το καθεστώς των ΠΓΕ. Ωστόσο, η παροχή προστασίας υπό το συγκεκριμένο καθεστώς θα είναι μικρότερης εμβέλειας, καθώς το προϊόν θα έχει μια ασθενή σύνδεση με την Κυπριακή Δημοκρατία και αυτό θα έχει ως αποτέλεσμα την ενθάρρυνση άλλων παραγωγών, εκτός της Κυπριακής Δημοκρατίας, να καρπώνονται τη φήμη του προϊόντος με την μόνη υποχρέωση να διεκπεραιώνουν μόνο ένα στάδιο της παραγωγής εντός της οριοθετημένης περιοχής. 

  III.        Απολογισμός

Θεωρείται αδιαμφισβήτητο ότι η ΕΕ έχει διαμορφώσει ένα σημαντικό σύστημα προστασίας των ευρωπαϊκών προϊόντων. Έντονη ωστόσο διαμάχη παρατηρείται, κατά την προσπάθεια κατοχύρωσης μιας απόλυτης προστασίας προς όφελος του κυπριακού τυριού «Χαλλούμι» από την Κυπριακή Δημοκρατία και από κυπριακές οργανώσεις και ιδρύματα. Ως απόρροια των προαναφερθέντων, η Κυπριακή Δημοκρατία οφείλει να προβεί άμεσα στη διεκπεραίωση ενεργειών που εξασφαλίζουν την ισχυρή προστασία του χαλλουμιού και κατ’ επέκταση, της παράδοσης της. Έχει δε υποχρέωση, να εντείνει τις πολιτικές διαπραγματεύσεις και να συλλέξει τα απαραίτητα στοιχεία που αποδεικνύουν την προέλευση του εν λόγου προϊόντος, ώστε να εγκριθεί ως ΠΟΠ ή ως ΠΓΕ. Παράλληλα, θα πρέπει μέσω πολιτικών πρωτοβουλιών να συνάψει διμερείς συνθήκες με ΚΜ της ΕΕ αλλά και τρίτα Κράτη, οι οποίες θα αναγνωρίζουν την κυπριακή προέλευση του χαλλουμιού και θα διασφαλίζουν την θωράκιση της ποιότητας του και κατ’ επέκταση της κυπριακής παράδοσης.

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[i] Κανονισμός (ΕΕ) 2017/1001 του Ευρωπαϊκού Κοινοβουλίου και Συμβουλίου, της 14ης Ιουνίου 2017, για το σήμα της Ευρωπαϊκής Ένωσης.

[ii] Κανονισμός (ΕΕ) αριθ. 1151/2012 του Ευρωπαϊκού Κοινοβουλίου και Συμβουλίου, της 21ης Νοεμβρίου 2012, για τα συστήματα ποιότητας των γεωργικών προϊόντων και τροφίμων.

[iii] M. Gragnani, ‘The EU Regulation 1151/2012 on Quality Schemes for Agricultural Products and Foodstuffs’ (2013) 8 Eur Food & Feed L Rev, 377

[iv] Κανονισμός (ΕΕ) αριθ. 1151/2012, άρθρο 5(1).

[v] Κανονισμός (ΕΕ) αριθ. 1151/2012, άρθρο 5(2).

[vi] Κανονισμός (ΕΕ) αριθ. 1151/2012, άρθρο 17.

[vii] Κανονισμός (ΕΕ) αριθ. 1151/2012, άρθρο 27.

[viii]  Κανονισμός (ΕΕ) αριθ. 1151/2012, άρθρο 13.

[ix] X. Wang, ‘Absolute protection for geographical indications: protectionism or justified rights?’ (2018) 8 (2) Queen Mary Journal of Intellectual Property, 81

[x] Κανονισμός (ΕΕ) αριθ. 1151/2012, αιτιολογική σκέψη 17

[xi] Κανονισμός (ΕΕ) αριθ. 1151/2012, αιτιολογική σκέψη 18.

[xii] P. Munzinger, ‘Blue jeans and other GIs: an overview of protection systems for geographical indications’, (2012) 7 Journal of Intellectual Property Law & Practice, No. 4, 287. 

[xiii] M. Gragnani, ‘The EU Regulation 1151/2012 on Quality Schemes for Agricultural Products and Foodstuffs’ (2013) 8 Eur Food & Feed L Rev, 378.

[xiv] Ευρωπαϊκή Επιτροπή «Quality schemes explained» (2019)
Europa.eu reference

[xv] T. Jovanić and M. Cogoljević and D. Pejović, ‘Buy national, campaigns and food country of origin labelling – EU legal framework and its relevance for Serbia’ (2018) 1293.

[xvi] H. V. J. Moir, ‘Understanding EU trade policy on geographical indications’ (2017) 12th Annual epip Conference: Claims on Area: The geography-IP interface, University of Bordeaux, 5.

[xvii] M. Gragnani, ‘The EU Regulation 1151/2012 on Quality Schemes for Agricultural Products and Foodstuffs’ (2013) 8 Eur Food & Feed L Rev, 378.

[xviii] H. V. J. Moir, ‘Understanding EU trade policy on geographical indications’ (2017) 12th Annual epip Conference: Claims on Area: The geography-IP interface, University of Bordeaux, 4.

[xix] T. Jovanić and M. Cogoljević and D. Pejović, ‘Buy national, campaigns and food country of origin labelling – EU legal framework and its relevance for Serbia’ (2018) 1293.

[xx] M. Gragnani, ‘The EU Regulation 1151/2012 on Quality Schemes for Agricultural Products and Foodstuffs’ (2013) 8 Eur Food & Feed L Rev, 378.

[xxi] H. V. J. Moir, ‘Understanding EU trade policy on geographical indications’ (2017) 12th Annual epip Conference: Claims on Area: The geography-IP interface, University of Bordeaux, 4.

[xxii] M. Gragnani, ‘The EU Regulation 1151/2012 on Quality Schemes for Agricultural Products and Foodstuffs’ (2013) 8 Eur Food & Feed L Rev, 378.

[xxiii] Ευρωπαϊκή Επιτροπή «Agriculture and food» (2019)
Europa.eu reference

[xxiv] Ευρωπαϊκή Επιτροπή «Agriculture and food» (2019)
Europa.eu reference

[xxv] Ευρωπαϊκή Επιτροπή «Agriculture and food» (2019)
Europa.eu reference

[xxvi] B. O’Connor, ‘Sui Generis Protection of Geographical Indications’ (2004) 9 Drake J Agric L, 363.

[xxvii] M. Omachi, ‘A Tale of Two Approaches: Analysis of Responses to EU’s FTA Initiatives on Geographical Indications (GIS)’ (2019) 18 Chi-Kent J Intell Prop, 158.

[xxviii] Συνεκδικασθείσες υποθέσεις C-465/02 και C-466/02, Ομοσπονδιακή Δημοκρατία της Γερμανίας (C-465/02) και Βασίλειο της Δανίας (C-466/02) κατά Επιτροπής των Ευρωπαϊκών Κοινοτήτων, (2005) ECLI:EU:C:2005:636.

[xxix] Συνεκδικασθείσες υποθέσεις C-465/02 και C-466/02, Ομοσπονδιακή Δημοκρατία της Γερμανίας (C-465/02) και Βασίλειο της Δανίας (C-466/02) κατά Επιτροπής των Ευρωπαϊκών Κοινοτήτων, (2005) ECLI:EU:C:2005:636, σκέψη 88.

[xxx] A. Profeta and R. Balling and V. Schoene and A. Wirsig, ‘The Protection of Origins for Agricultural Products and Foods in Europe: Status Quo, Problems and Policy Recommendations for the Green Book’ (2009) 12 J World Intell Prop 628.

[xxxi] Συνεκδικασθείσες υποθέσεις C-465/02 και C-466/02, Ομοσπονδιακή Δημοκρατία της Γερμανίας (C-465/02) και Βασίλειο της Δανίας (C-466/02) κατά Επιτροπής των Ευρωπαϊκών Κοινοτήτων, (2005) ECLI:EU:C:2005:636, σκέψη 87.

[xxxii] Συνεκδικασθείσες υποθέσεις C-465/02 και C-466/02, Ομοσπονδιακή Δημοκρατία της Γερμανίας (C-465/02) και Βασίλειο της Δανίας (C-466/02) κατά Επιτροπής των Ευρωπαϊκών Κοινοτήτων, (2005) ECLI:EU:C:2005:636, σκέψη 87.

[xxxiii] Συνεκδικασθείσες υποθέσεις C-465/02 και C-466/02, Ομοσπονδιακή Δημοκρατία της Γερμανίας (C-465/02) και Βασίλειο της Δανίας (C-466/02) κατά Επιτροπής των Ευρωπαϊκών Κοινοτήτων, (2005) ECLI:EU:C:2005:636, σκέψη 87.

[xxxiv] Συνεκδικασθείσες υποθέσεις C-465/02 και C-466/02, Ομοσπονδιακή Δημοκρατία της Γερμανίας (C-465/02) και Βασίλειο της Δανίας (C-466/02) κατά Επιτροπής των Ευρωπαϊκών Κοινοτήτων, (2005) ECLI:EU:C:2005:636, σκέψη 53.

[xxxv] Συνεκδικασθείσες υποθέσεις C-465/02 και C-466/02, Ομοσπονδιακή Δημοκρατία της Γερμανίας (C-465/02) και Βασίλειο της Δανίας (C-466/02) κατά Επιτροπής των Ευρωπαϊκών Κοινοτήτων, (2005) ECLI:EU:C:2005:636, σκέψεις 1187, 88, 100.

[xxxvi] Προτάσεις της Γενικής Εισαγγελέα, Juliane Kokott, της 17ης Οκτωβρίου 2019, ECLI:EU:C:2019:881, σκέψη 1.

[xxxvii] Προτάσεις της Γενικής Εισαγγελέα, Juliane Kokott, της 17ης Οκτωβρίου 2019, ECLI:EU:C:2019:881, σκέψη 2.

[xxxviii] Προτάσεις της Γενικής Εισαγγελέα, Juliane Kokott, της 17ης Οκτωβρίου 2019, ECLI:EU:C:2019:881, σκέψη 3.

[xxxix] Προτάσεις της Γενικής Εισαγγελέα, Juliane Kokott, της 17ης Οκτωβρίου 2019, ECLI:EU:C:2019:881, σκέψη 3.

[xl] C-766/18 P – Foundation for the Protection of the Traditional Cheese of Cyprus named Halloumi κατά EUIP, ECLI:EU:C:2020:170.

[xli] Προτάσεις της Γενικής Εισαγγελέα, Juliane Kokott, της 17ης Οκτωβρίου 2019, ECLI:EU:C:2019:881, σκέψη 59.

[xlii] Προτάσεις της Γενικής Εισαγγελέα, Juliane Kokott, της 17ης Οκτωβρίου 2019, ECLI:EU:C:2019:881, σκέψη 69.

[xliii] Προτάσεις του Γενικού Εισαγγελέα Damaso Ruiz-Jarabo Colomer, της 10ης Μαΐου 2005,  ECLI:EU:C:2005:276, σκέψη 33.

Directive on Administrative Cooperation (DAC) 6 – EC DIRECTIVE 2018/822/EU (25.5.2018)

European Council Directive 2018/822/EU of May 25, 2018 (DAC 6) represents the biggest shake-up of rules on automatic exchange of information (AEOI) in the EU since the imposition of the Common Reporting Standard (CRS) back in 2014.

However, unlike the CRS and DAC Volumes1 to 5 which have hitherto targeted financial institutions DAC Volume 6 has its focus on mandating disclosure of Reportable Cross Border Tax Arrangements from “intermediaries” involved in cross-border tax arrangements with their clients.

Many intermediaries, including law firms, accountants and auditors, have until now broadly not needed to report tax information periodically since they fall outside the “financial institution” definition under the CRS.

This is all about to end.

The European Commission has made it clear that it sees intermediaries at the heart of aggressive tax planning and is therefore seeking mandatory disclosure from them.

The International Aspect – Jurisdictions Outside Europe

The OECD will no doubt follow for non-EU jurisdictions.

It is clear that mandatory disclosure requirements are on the increase the OECD (Organisation for Economic Cooperation and Development) is going to follow the European Commission in the imposition of enhanced mandatory disclosure requirements for cross-border transactions.

The EU Perspective

What is DAC 6?

“DAC 6” stands for the Directive on Administrative Cooperation in (direct) taxation in the EU, volume 6.

It operates as the sixth amendment to the long-running series of directives designed to encourage cross-border information exchange in the EU. The CRS, for example, was implemented in the EU in 2014 under “DAC 2.”

DAC 6 is the part of the DAC series which provides for mandatory disclosure of reportable cross-border tax arrangements (RCBAs).

The background for the implementation of DAC 6 by the EU is of course the ongoing international tug-of-war between the Organization for Economic Co-operation and Development (OECD) under its framework on Base Erosion and Profit Shifting (BEPS), in particular Action Plan 12, and the ever-growing prominence of low or no tax international  financial hubs that look to the increasing commoditization of international finance.

Standard principles of EU law require that EU Directives such as the DAC 6 Directive be implemented by member states through local laws in order to be locally applicable.

DAC 6 has been in force across the EU and reports as described in the directive would have been due as from 1^st July 2020 with the obligation to report cross border arrangements occurring post June 25, 2018, which was the 20th day following publication of DAC 6 in the EU’s Official Journal.

On 24^th June 2020 following informal agreement reached by EU member states the EU Council announced that the EU will give EU member states an extended time period to comply with DAC 6 requirements.

The reason given for this is the impact of the coronavirus pandemic.

In reality however, if the EU were to be totally honest, if there can ever be a convenient time for a global pandemic for DAC 6 this was it. The initial deadlines of 1^st July 2020 for reporting cross border arrangements and 31^st August 2021 for reporting historical cross border arrangements (from 25^th June 2018 to 30^th June 2020) was looking an increasingly onerous obligation, that would have been almost impossible to comply with and enforce. The extended dates of 1^st January 2021 and 28^th February 2021 respectively still appear to be optimistic, but with rigorous education and application an acceptable degree of compliance may be achievable.

The Disclosure Requirement under DAC 6.

It is important to note that DAC 6 implementation applies as from the date of publication of the DAC 6 directive in the EU Official Journal which was 25^th June 2018.

Under DAC 6 “intermediaries” are subject to reporting requirements.

An intermediary is any legal or natural person:

• that designs, markets, organizes or makes available for implementation or manages the implementation of an RCBA); or
• that provides, directly or by means of other persons, aid, assistance or advice with respect to designing, marketing, organizing, making available for implementation or managing the implementation of an RCBA.

Intermediaries that are involved in that way with RCBAs must report information on the RCBA to their tax authorities: it is here that DAC 6 resembles a form of AEOI similar to the CRS. There will then be automatic exchange of that information with other EU tax authorities.

In certain situations, the obligation to report can fall on the taxpayer itself. Taxpayer’s obligation to report arises where an intermediary is a non-EU person (which is narrowly defined), where no intermediary is involved—such as where an RCBA is arranged in-house—or where an intermediary does not disclose owing to legal professional privilege.

The question of whether a professional intermediary who is involved but who may be precluded from reporting by applying legal professional privilege is under an obligation to ensure that reportable cross border arrangements that they have been involved in is a legal moot point.

What is a Reportable Cross-Border Arrangement?

An arrangement will be considered “cross-border” where at least one of the participants is based in the EU (and regardless of the location of other participants). Therefore, in theory if one participant is in the EU, say London, another in North America, another in Hong Kong and another in Mexico the arrangement may be “reportable”.

An arrangement may be “reportable” where it contains at least one of “hallmarks” outlined below. The Hallmarks are loosely designed as indicators of presumed aggressive tax avoidance by the EU.

The hallmarks are themselves broken down into five sub-categories:

• Hallmark category “A”: arrangements whose tax benefits are subject to confidentiality arrangements that give rise to performance fees or mass marketed schemes;
• Hallmark category “B”: arrangements such as the contrived acquisition of loss-making companies, the conversion of income into capital or other forms of income, or so-called circular transactions;
• Hallmark category “C”: arrangements that give rise to tax deductions without a corresponding amount of taxable income, to certain double reliefs or deductions, or other such mismatches;
• Hallmark category “D”: arrangements that have the effect of undermining the CRS or the rules on identification of beneficial ownership;
• Hallmark category “E”: arrangements concerning transfer pricing.

Certain hallmarks will only be satisfied if an additional “main benefit test” is satisfied. To satisfy the test, one of the main objectives of the arrangement must be to obtain a tax advantage.

As will be appreciated, the above tests are not only imprecisely drafted but require a significant degree of judgment to determine if they apply.

If one considers the possibility of national competent authorities across the EU taking different views it is inevitable that there will be a patchwork approach to enforcement.

What Happens if there are Multiple Intermediaries?

This will frequently be the case, and in many cases arrangements will involve more than one EU country. DAC 6 has painted a picture of an ideal world where all the intermediaries cooperate with one another and take the same view on what is reportable, and where a single intermediary is charged with the reporting. DAC 6 fails to set out a strict reporting regime.

It is clearly unsafe and imprudent for any business engaged in cross-border business to leave reporting to chance and to risk non-compliance and investigations.

As lawyers we must impress upon our clients that it is in their interests to take a strong lead in coordinating the DAC 6 reporting exercise.

It is clear that at times the presence of multiple intermediaries is likely to lead to multiple reporting. In such cases care must be taken for the reporting to be consistent.

Exemptions from DAC 6 Reporting Requirements

• Domestic tax planning arrangements will be out of scope. For an arrangement to be caught, it will need to have a cross-border element.
• Only direct taxation, such as income tax, is relevant for the purposes of determining tax planning arrangements within scope. For example, tax planning in relation to value-added tax would remain out of scope.
• Depending upon the rules relating to legal professional privilege (LPP), LPP may be fully adopted as a limitation on the disclosure obligation.
• The directive provides for penalties against intermediaries for non-compliance.

The Wider Implications of Increased Mandatory Reporting

DAC 6 aims to ensure that the disclosure of information on reportable arrangements in the EU occurs in a harmonized manner. The level of detail that will be requested and the interpretation of the “Hallmarks” will determine the level of information that tax departments and ultimately the EU Commission will receive from intermediaries. The fear is that the information that may be required in terms of disclosure will ultimately have little, if anything, to do with harmonized tax reporting, but may be used in an infinite number of ways.

What Does DAC6 Mean for Cyprus Legal and Accountacy Professionals – Make or Break?

Despite the fact that for a number of years now Cyprus has been fully, if not over compliant with all relevant EU regulations in relation to both financial reporting and compliance, it is still is still, unfairly, viewed and indeed referred to as a “tax haven”. This is a picture that envious rival economies in both Europe and abroad like to disparage Cyprus.

In truth Cyprus is not a tax haven. It is a cost – effective jurisdiction that allows companies of substance to operate their businesses in a fully compliant and extremely tax efficient manner and to benefit from one of the lowest, if not the lowest corporate tax rates in the world. That is the key competitive advantage of Cyprus.

Europe is however inexorably moving to the introduction of full and transparent disclosure of cross border arrangements and to a Europe-wide uniform taxation system.

DAC 6 is another step in this direction, and it comes at the same time as the decision of the Russian Federation to revise its double tax treaty with Cyprus and it adds another compliance measure and an extra layer of costs to burden the “intermediary” and the client.

Cyprus will come under pressure to enforce DAC 6 rigourously. This is yet another challenge that the Cyprus services sector will face in the next few years and one that it will need to face and overcome.

The method and manner of national enforcement DAC 6 is a challenge that must be taken up by our Government and by our professional associations with a view to avoiding a repetition of the compliance fiasco that we are enduring with our banking system, where it is now easier to open a bank account for a client in Switzerland than it is in Cyprus.

The approach that Cyprus will take must be business focused and must be geared at retaining and increasing and enhancing business rather than making it more difficult for business to remain in and transact through Cyprus.

Legal professional privilege must be supported and insisted on by Government as an exemption to the reporting requirements of Cyprus in relation to DAC 6.

Τα κυπριακά δικαστήρια παρουσιάζουν ίσως τις πιο μεγάλες καθυστερήσεις της Ευρώπης στην εκδίκαση υποθέσεων. Καθημερινά επιβεβαιώνεται το ρητό «justice delayed is justice denied».

Οι επιπτώσεις της πανδημίας του κορωνοϊού οπωσδήποτε θα χειροτερεύσουν αυτή την κατάσταση.

Ίσως να είναι καιρός για δικηγόρους και διαδίκους να στραφούν στην διαδικασία της διαμεσολάβησης (mediation) σε περιπτώσεις όπου κρίνουν ότι θα μπορέσει να επιφέρει τη λύση στις διαφορές μεταξύ των πελατών τους σε συντομότερο χρόνο.

Η διαμεσολάβηση είναι μια εμπιστευτική, δομημένη διαδικασία που δεν δεσμεύει τους διαδίκους σε οποιοδήποτε αποτέλεσμα αλλά ούτε και στη συνέχιση της.

Αν δεν επιτύχει, η διαμεσολάβηση δεν παράγει μαρτυρία που μπορεί να χρησιμοποιηθεί στο δικαστήριο και τουλάχιστο δίνει στην κάθε πλευρά την ευκαιρία να γνωρίσει τις θέσεις της άλλης καθώς και τα δυνατά και αδύνατα σημεία της υπόθεσης της.

Η διαμεσολάβηση μπορεί να γίνει εξ αποστάσεως και εντός προκαθορισμένου χρονικού διαστήματος.

Η διαμεσολάβηση τελειώνει με την αποχώρηση ενός εκ των διαδίκων μερών, ή με την κοινή συναίνεση των διαδίκων μερών, ή με την συμφωνία διευθέτησης της διαφοράς που συντάσσεται από τον μεσολαβητή και υπογράφεται από τα μέρη και κατατίθεται στο δικαστήριο για σκοπούς εκτέλεσης.

Σκεφτείτε το!

In a recent judgment in action 880/2018, in which our firm acted for the Defendants, the District Court of Nicosia struck out a claim for abuse of the court’s process basing its decision on the so called “Aldi requirement” and the rule in Henderson v Henderson.

The legal significance of this particular judgment lies in the facts that:

• is the first time in which a Cypriot Court has applied the Henderson rule in solitude and has accepted it as a rule capable of operating on its own, without the need for it to be hinged on res judicata. In doing so the Cypriot court accepted that the Henderson rule can apply to subsequent proceedings even though the first proceedings have not yet been concluded, 

• the “Aldi requirement” has been adopted in to Cypriot law

The rule in Henderson v Henderson

The rule in Henderson v Henderson is an old common law rule emanating from the old English case of Henderson v. Henderson, 1843-1860, All ER Rep 378. In short, the Henderson rule is a rule of public policy aimed at preventing abuse of process and it dictates that the parties to a litigation must bring their whole case forward in one proceeding. Parties who do not avoid such multiplicity of proceedings run the risk of being found to have abused the Court’s process.

The major English case on the rule is Johnson v. Gore Wood & Co, 2002, 2 AC, in which the rule was summarised as follows:

«Thus the abuse in question need not involve the reopening of a matter already decided in proceedings between the same parties, as where a party is estopped in law from seeking to relitigate a cause of action or an issue already decided in earlier proceedings, but, as Somervell LJ put it in Greenhalgh v Mallard [1947] 2 All ER 255 , 257, may cover:

«issues or facts which are so clearly part of the subject-matter of the litigation and so clearly could have been raised that it would be an abuse of the process of the court to allow a new proceeding to be started in respect of them».

The importance of the Henderson rule in its wide ambit application is that a party may invoke it even though:

• the first proceedings have not yet been concluded (i.e a judgment is not required before the rule is invoked) and,

• the parties to the succeeding litigation are not exactly the same as the parties to the first litigation.

The “Aldi requirement”

The “Aldi requirement” was borne out of the more recent English case of Aldi Stores Ltd v. WSP Group Plc, 2007, EWCA Civ 1260. The Aldi case created a requirement for parties who are contemplating to bring further actions in relation to a subject matter already before the Court to make this known to the Court and their opponents so that the Court may exercise its case management powers effectively and maintain fairness to both parties.

In short, the Aldi requirement prevents a party from keeping a claim secret and disallows the tactical use of proceedings. In the case of  Stuart v Goldberg Linde, 2008, 1 WLR 823, which the Cypriot court made reference to in its judgment, the Aldi requirement was summarised as follows:

«Secondly, as Aldi again makes clear and as the Master of the Rolls stresses, a claimant who keeps a second claim against the same defendant up his sleeve while prosecuting the first is at high risk of being held to have abused the court’s process. Moreover, putting his cards on the table does not simply mean warning the defendant that another action is or may be in the pipeline. It means making it possible for the court to manage the issues so as to be fair to both sides.

In the instant case, although the claimant knew that he had a potential claim for inducement to breach the contract after he received Mr Linde’s witness statement in October 2000, he did not make that clear either to Mr Linde or to the court. In my opinion he should have done so and it is at least arguable that his deliberate failure not to do so for partisan tactical reasons renders this second action an abuse of the process of the court».

The decision in action 880/2018

The Court, in accepting the arguments of the Defence, struck out the claim on the grounds of abuse of process basing its decision on the following factors:

• The Claimants had breached the Henderson rule by choosing to lodge subsequent proceedings when they could have included their particular claim in the first action (that is still ongoing)

• The Claimants had breached the Aldi requirement by choosing to keep the subsequent action, action 880/2018, secret both from the Court and their opponents in the first action in order to obtain a tactical advantage in interim applications that were being litigated in the first proceedings.

The legal significance of this judgment

This decision is important because:

• it highlights the Cypriot courts’ unwillingness to excuse or entertain abuse of process. At a time when the backlog of cases is such that that the Cypriot judicial system is overwhelmed, this decision is a step in the right direction of actively preventing unnecessary multiplicity of proceedings and sanctioning parties who cause it,

• the rule in Henderson has been afforded the wide ambit it enjoys under the English common law and,

• the adoption of the English common law “Aldi requirement” means that parties to litigation now have to abide by it or else run the risk of being found to have abused the Court’s process. Some parties may have to rethink existing case strategies and other parties, who have found themselves facing actions that their opponents have “kept up their sleeve”, might want to think about applying to the Court for redress.

Land registration is exercised by the Department of Lands and Surveys, one of the oldest government departments which commenced operations in 1858. The system was significantly developed in 1929 by completion of mapping, registration, and valuation of immovable property, following a cadastral general survey conducted by the authority at the time.

This had led to the legislative reform of 1945 by which the Ottoman laws and many of the later colonial laws were repealed. This reform comprised mainly of two laws: The Immovable Property (Tenure, Registration and Valuation) Law, CAP 224 and the Wills and Succession Law, CAP 195. The most striking effect of the said law reform was the rationalization and simplification of the law on property (categories of land, prescription, and inheritance). The 1945 legislation has been the subject of several amendments to date but nevertheless remains in force and forms, along with other related laws, the basis of the Cyprus property law system.

The system of immovable property registration is a system of registration of title. A registered person is considered to be the undisputed owner of the immovable property and his title to ownership is absolute, subject to the Director’s power to correct errors or omissions and the inherent power of the Courts to order the amendment or nullification of a registration.

The basic and most fundamental rights in land are the right to the use and enjoyment of the land, the right to income arising from land and the right to alienate or transfer land. These rights may be affected by contract, by legislation or by tenure.

There are two types of holding right or title over real estate in Cyprus, that is freehold and leasehold. Most Cyprus properties sold or purchased or otherwise disposed of constitutes freehold property. Land or immovable property may most commonly be acquired, inter alia, through transfer by way of gift or sale or exchange, by way of succession and pursuant to the provisions of an express trust.

Real estate has always been a safe long-term investment for Cypriots. The accession of Cyprus to the European Union in 2004 has led to an immense number of acquisitions of real estate in Cyprus for various reasons and purposes, by both EU and third-country nationals. In this respect, the increasing growth in the construction and real estate industry have consequently raised dealings with land or other property to thousands each year.

However, the need for maintaining legal security and protection in any given land or property transaction is of paramount importance for any interested or concerned party to such a transaction. This presupposes the obtainment of independent and reliable legal advice from the outset, in view of avoiding any unforeseen or potential pitfalls and undesirable consequences in the future. The complexity of the relevant laws and the formalities which need to be adhered to, make this imperative.

The recent past has shown that, particularly to the sale of off plan properties, buyers have repeatedly found themselves “trapped” in transactions that afforded no legal security. Victims of later bankrupt developers, of already mortgaged properties or of fraud, are only a few of the instances lacking clear legal advice and independent legal representation in conducting such transactions. There are other numerous cases where the seller had imposed his own advocate to act for the buyer, thus lacking impartiality. Consequently, the result has been the engagement of all these innocent persons in expensive and time-consuming legal battles with no certainty at all as to the outcome and further the negative impact to the good reputation of Cyprus as a safe destination to invest especially by foreign nationals.  

Legislative intervention has come at times to safeguard the conduct and finality of these transactions and moreover to protect the rights of innocent parties who, by default of acquiring legal advice or independent legal representation were inevitably faced with imminent financial and other consequences. This was done to cover the loopholes in legislation but not in absolute success.

It is believed that time has come for a more comprehensive solution that would serve proactively the rights of persons or entities wishing to transact in land or property at the Land Registry.

This necessitates the involvement of the legislature to enact and apply a system/framework that would make obligatory the handling of a property dealing or conveyancing to a competent, independent and experienced advocate representing either of the parties, or at least the buyer who is in most cases the party at risk, rather than leaving such appointment to the option or discretion of the parties. Further to this, no legal document should be left to be deposited within the Land Registry as per the Law, without the prior written verification or otherwise certification that such an advocate representing the affected party has advised accordingly this party of any hazards or legal implications surrounding the transaction.

The duty of care owed by the advocate in such a case would be to act with transparency in order to ensure, to all reasonable extent, legal protection to the party affected and to minimize any contingencies arising in the future, based on the principles set out in the landmark case issued by the Supreme Court of Cyprus in Muriel Beaumont and other v. NK [2010] 1 ΑΑΔ 525, which has in essence adopted English authorities on the matter with particular reference to Pilkington v. Wood [1953] 2 Αll E.R. 810. 

The duty of care owed by an independent and competent advocate in such a case would be to take all appropriate measures which, although not exhaustively, include the following:

• Identify the key legal issues and determine the steps necessary embracing the transaction.
• Identify any inherent dangers and warn the party about them.
• Conduct all necessary customary enquiries and more importantly conduct a comprehensive search at the District Land Registry in which the property is situated, in view of ascertaining the existence of any mortgages, memos, encumbrances or other charges on the property which take in priority, pursuant to section 51A (2) of the Immovable Property (Tenure, Registration and Valuation) Law, CAP 224.
• Where the property in question bears no separate title of ownership, identify and warn the client of all issues concerning the issuance of a title in the future and under what circumstances this matter may be at peril. Further, conduct a search to determine that an urban planning permit or a building permit is in place and if not, clearly advise party of all possible risks.
• If the seller is a legal entity, to conduct an appropriate due diligence search and provide advice on any issues or risks arising as to seller’s insolvency.
• Review the terms of the Contract with special reference to terms as to consideration, mode of payment, time prescribed to delivery of possession or of issue of separate title or of transfer, and all other related matters important to full execution of the Contract.
• Arrange for payment of stamp-duty imposed by Law on the Contract.
• Deposition of the Contract with the Land Registry giving priority over any charge or encumbrance later registered.
• Supervise and take all actions to ensure that all formalities are met until transfer of the property or otherwise at the Land Registry.
• Provide legal advice on all stages.

The above description of duties summarizes the measures and actions that advocates must take in protecting or safeguarding the interests of people wishing to transact in property. The aim of a professional is to assist parties and especially foreign nationals to have a clear view of the land registry system and the Law.

That is why we need to accept now more than ever, that the obligatory appointment or assignment of this work to independent and experienced advocates is necessary to ensure that the land registry system, with its rich history and its now developed form, is not exploited at the mercy of those who do not contract in good faith. The matter is left to the hands of the legislature.