Trou­ble in ‘Olive­wood’ as scheme fails to start rolling

Financial Mirror (Cyprus) - - CYPRUS -

Ef­forts to pro­mote Cyprus as a film­ing lo­ca­tion, dubbed Olive­wood, has hit a brick wall as a law giv­ing re­im­burse­ments and tax in­cen­tives to en­tice film com­pa­nies was sent back to par­lia­ment by Pres­i­dent Ni­cos Anas­tasi­ades.

The bill was ap­proved by MPs on 2 Novem­ber with an amend­ment which was to al­low in­di­vid­u­als, as well as com­pa­nies, to be el­i­gi­ble to take part in the scheme. In his re­fer­ral to par­lia­ment, Pres­i­dent Anas­tasi­ades said this con­flicted with what the gov­ern­ment had put for­ward.

He re­fused to sign the law, ar­gu­ing that par­lia­ment had widened the scope of the bill, with­out any ref­er­ence to small to medi­um­sized com­pa­nies, which was a ba­sic el­e­ment in the pro­vi­sion of tax breaks.

The Pres­i­dent also ar­gued that the bill was un­con­sti­tu­tional as the law was retroac­tive.

“In the form it was voted, but also the way it had been sub­mit­ted by the ex­ec­u­tive power, the law comes into force retroac­tively on Jan­uary 1, 2018,” the pres­i­dent said in a let­ter to par­lia­ment.

Talk­ing be­fore the House’s Le­gal Af­fairs Com­mit­tee, Theo­pha­nis Theo­phanous, the Com­mis­sioner for State Aid Con­trol, said that the bill is in vi­o­la­tion of both Euro­pean and lo­cal laws.

He added that the el­e­ment of retroac­tiv­ity of the bill goes against phi­los­o­phy of an in­cen­tive scheme.

Theo­phanous com­ments en­raged MPs who won­dered how the Le­gal Ser­vice did not spot the con­sti­tu­tional con­flict, with op­po­si­tion MPs won­der­ing whether the gov­ern­ment had pur­posely ig­nored the fact that the bill was in vi­o­la­tion with the laws.

Op­po­si­tion AKEL’s spokesman Ste­fanos Ste­fanou, said: “The gov­ern­ment must not mis­lead the House and must check whether laws pro­posed are in com­pli­ance with the con­sti­tu­tion be­fore send­ing them off to the par­lia­ment”.

The Greens

leader Ge­orge

Perdikis the the

said that the whole thing “is a scan­dal which was re­vealed by chance. It would ap­pear that the gov­ern­ment brought a bill be­fore the house which aimed at ben­e­fit­ting a cer­tain group of peo­ple. It is a big scam which we will not sup­port”.

The house now has 15 days to re­spond to the Pres­i­dent’s re­fer­ral, by ei­ther ac­cept­ing it and amend­ing the law or send it back to the Pres­i­dent, in which case the law will be brought be­fore a Con­sti­tu­tional Tri­bunal.

Cyprus di­rec­tors are ex­tremely dis­ap­pointed with the de­vel­op­ment as high hopes were pinned on the likes of Paramount and Uni­ver­sal Pic­tures com­ing, es­pe­cially af­ter the gov­ern­ment’s for­eign in­vest­ment arm, In­vest Cyprus or­gan­ised the first Cyprus Film Sum­mit on 8 Oc­to­ber, es­sen­tially an­nounc­ing the in­cen­tive scheme for stu­dios to film on the is­land.

Sources from the lo­cal film in­dus­try ex­pressed their dis­ap­point­ment as “it would ap­pear, there was much ado about noth­ing”.

At the sum­mit, Fi­nance Min­is­ter Har­ris Ge­or­giades told the au­di­ence how Cyprus was put to use it’s “unutilised po­ten­tial as it tries to come into the spot­light of the global film in­dus­try”.

A film in­dus­try source told the Fi­nan­cial Mir­ror: “At that time we had warned of­fi­cials about the pos­si­bil­ity of the lo­cal in­dus­try and Cyprus as a coun­try, even­tu­ally be­ing ex­posed, as the sum­mit was held be­fore the bill had even been dis­cussed in the par­lia­ment”.

The law was ap­proved on 2 Novem­ber and re­ferred back to the House by Anas­tasi­ades on 28 Novem­ber.

“Un­for­tu­nately, as things would ap­pear, lo­cal film­mak­ers are to miss out on the op­por­tu­nity to work with big film pro­duc­ers as the law is not ex­pected to be voted in by the end of the year, and in any case the coun­try’s cred­i­bil­ity to­wards film­mak­ers in­ter­na­tion­ally has taken a blow,” said the in­dus­try source.

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