Paolo Panico: STEP Cyprus can be rightly proud for its achievements

The Chairman of STEP Europe, Paolo Panico, talks to CBN about the work of STEP Cyprus, which he says “can be rightly proud of its achievements in the past 20 years”, as well as how the local trust industry has been affected by the war in Ukraine.

Panico will be attending the STEP Cyprus Conference and a Gala Dinner on 24-25 May 2023 at the Four Seasons Hotel in Limassol, Cyprus.

What is the STEP Cyprus Conference and why is it important that people show up?

This year marks a particularly important milestone for STEP Cyprus. The Conference will celebrate the 20th anniversary of its creation.

STEP – which means the “Society of Trust and Estate Practitioners” – is an international association of private client practitioners (lawyers, accountants, family officers, bankers, and investment advisors). It is head-quartered in London and has about 21,000 members all over the world.

STEP Cyprus is one of the largest and most active branches in the “Europe” region of STEP and can be rightly proud of its achievements in the past 20 years.

The conference will be an opportunity for new members to meet with the founding promoters of STEP Cyprus and for professionals from all over the island to meet with local as well as international colleagues attending the event.

Does Cyprus have a significant trust industry? How is it performing?

Last year we celebrated an important anniversary of trust law in Cyprus: the 30th birthday of the Cyprus International Trust Law 1992 and the 10th anniversary of the Amending Law of 2012.

STEP Cyprus was actively involved in the preparation of Trust Laws in Cyprus. An International Perspective, the first English language book on Cyprus trust law.

I was particularly happy and proud of this project in my capacity as consulting editor of the book, that contains an in-depth analysis of both the International Trust Law, which is reserved to international clients, and the domestic Trustee Law 1955, which is available to the Cypriot families.

How has the trust industry developed in recent years given the turbulence in the global economy?

It is well known that Russia has traditionally represented a significant share in the Cypriot trust (and more generally private client) market.

The war in Ukraine and the sanctions imposed by the EU have created some important problems for the Russian business and Cyprus is probably the hardest hit EU member state in this respect.

This does not mean of course that no more Russian clients will be accepted in Cyprus. It means that additional care must be taken by all Cypriot practitioners in discharging their duties to their clients and at the same time complying with the sanctions legislation.

What will you talk about at the Conference?

I will discuss a recent Privy Council decision about the exercise of trustee fiduciary powers. The case concerns a family trust where all the beneficiaries were excluded and all the assets were distributed to a philanthropic purpose trust.

The family in question was from Taiwan and there is no connection to Russia or the sanctions. Nonetheless, a case like this might very well happen in Cyprus as a result of the new dynamics that were triggered by the war and the sanctions.

I think that it will be a very interesting discussion for all the professionals in attendance.

Any advice for trust experts in Cyprus?

My feeling is that the existing Cyprus international trust law contains a potential that has not been fully exploited so far.

It is one of the best examples of trust legislation internationally and it offers a number of opportunities to tackle new and different markets.

For example, in one of my chapters in the book on Cyprus trust law I suggested that an international trust may be used to fulfil the wishes of certain Islamic clients. It may be one of the new markets that Cyprus professionals could approach.

Similarly, a Cyprus international trust allows to devise one’s succession in a very flexible way that could be seriously considered by clients living in places where there are forced heirship provisions.

A successful approach to these markets requires a strong understanding of the opportunities offered by the Cypriot trust law as well as a close coordination with foreign colleagues in the clients’ jurisdictions.

One of the main advantages of joining STEP is indeed that of being part of a network of highly reputable practitioners all over the world!

Paolo Panico, Chairman, STEP Europe

Paolo Panico is a Scottish solicitor, a licensed legal advisor (“conseil juridique”) in Monaco, a Romanian “avocat”, and a Registered European Lawyer in Cyprus. He was also an “avocat à la Cour” in Luxembourg until 2022. He is a director of Private Trustees SA, a Luxembourg trust company, and a director of Teton Trust Company LLC, a licensed trust company in Wyoming (USA). Paolo is an academic supervisor of the Certificate in International Family Wealth at the International University of Monaco and teaches courses at the Master in Wealth Management of the University of Luxembourg and at the LLM of the University of Liechtenstein. His publications include International Trust Laws (2nd edition, Oxford University Press, 2017) and (as editor) Beneficial Ownership Registers.

The STEP Handbook for Advisors (Globe Law and Business, 2021) and Trust Laws in Cyprus: an international perspective (Globe Law and Business, 2022). He is a member of the worldwide Board of Directors and Chairman of the “Europe” Region of STEP, Deputy Chairman of the International Tax Planning Association (ITPA), a member of the executive committee of the “Associazione Il Trust in Italia”, and an academic of The International Academy of Estate and Trust Law (TIAETL).

The Society of Trusts and Estate Practitioners (Cyprus) Ltd (“STEP Cyprus”), a professional association of practitioners specialising in trusts and estate planning, will host the annual STEP Cyprus Conference and a Gala Dinner on 24-25 May 2023 at the Four Seasons Hotel in Limassol, Cyprus.

Organiser: STEP Cyprus

Gold Sponsor: Pourgoura & Aspri LLC

Silver Sponsors: Fairwinds International Bank LLC, IQEQ Cyprus Ltd

Bronze Sponsor: Premier Financial Services

Dinner Sponsor: 1291 Group

Stationery Sponsor: Michael Kyprianou Advocates & Legal Consultants

Coordinator: IMH