From a simple declaration to a real audit: what has changed and what is missing

The case of former government minister Christodoulides, in whose “Declaration of Assets” undeclared assets were identified, brings back into the spotlight the question of just how strict and effective the Cypriot system for auditing the assets of public officials ultimately is.

The former minister

According to public statements by MP and member of the Special Parliamentary Committee on “Declaration of Assets” Dimitris Dimitriou, these include deposits totaling approximately €2.4 million in Cyprus and abroad, as well as real estate abroad, which were not included in the relevant declarations.

No issue of illicit enrichment has emerged so far, as the assets are reported to have existed prior to his appointment as minister. The issue under review concerns the accuracy and completeness of the declarations, and the relevant committee has requested a legal opinion on the potential consequences.

This case follows a radical overhaul of the system in 2024. Law 112(I)/2024 applies to the President of the Republic, ministers, deputy ministers, members of the House of Representatives, and Members of the European Parliament, requiring them to file a declaration upon assuming and leaving office, as well as information explaining changes in their net worth.

Speaking to “Alpha on Sunday,” Adonis Pigasiou, Academic Director of the EIMF, points out that, compared to the previous system, there is now a clearly more substantive framework.

“The major change is not simply that assets are declared—that was done before as well—but that there is now a systematic effort to verify the accuracy of the declarations and changes in assets. The Tax Commissioner now plays a central role in this verification,” he states.

He notes, however, that despite the significant improvement—which GRECO also acknowledges—there are still weaknesses that need to be addressed.

Behind the statement

The most significant change is that it is no longer sufficient to simply publish what the official declares. The declarations are forwarded to the Tax Commissioner, who may verify the accuracy of the information, request clarifications and supporting documents, and gain access to government records.

If there are indications of false or misleading information or an unexplained change in assets, a special investigation may be ordered, including the lifting of bank, securities, and tax secrecy. If assets are discovered whose origin cannot be justified, the findings may be forwarded to the Attorney General.

In 2025, GRECO recognized this change as significant progress and concluded that the substantive verification of declarations had been substantially strengthened.

According to Adonis Pigasiou, however, a broader problem with Cyprus’s accountability framework remains the fragmentation of responsibilities among many institutions, each with different procedures and not always a clear division of responsibility.

“This is also evident in the declaration of assets, where not all officials are subject to the same procedure, frequency, and penalties,” he notes, adding that what is needed now “is not the constant addition of new rules, but a coherent and functional system for enforcing existing ones.”

Up to a year in prison

Submitting false information may result in a fine of up to €5,000, imprisonment for up to one year, or both. The law, however, exempts “innocent and non-material omissions.”

Conversely, anyone who knowingly files a false or misleading complaint against a public official may face a fine of up to €50,000 or imprisonment for up to three years.

The framework for failure to file a declaration is less clear. For ministers or deputy ministers, the consequences are determined by the President of the Republic, while for members of Parliament, the Rules of the House of Representatives apply. GRECO has highlighted both the lack of specific sanctions in these cases and the absence of a corresponding clear provision regarding the President himself.

Adonis Pigasiou notes that the sanctions are not equally clear and predictable for everyone.

“For several categories, specific administrative fines are provided for, while the submission of false information may also result in criminal consequences. However, in the case of a Minister or Deputy Minister, the law leaves it to the President to decide the consequences of failure to submit the information. “GRECO points out precisely this weakness, as well as the absence of a corresponding clear provision regarding the President himself,” he states.

According to him, “a sanction serves as a greater deterrent when it is clear in advance, predictable, and consistently enforced.”

He also raises the issue of separating political from legal responsibility. As he explains, it is legitimate for the President of the Republic to decide whether he still has political confidence in a minister. “However, determining whether a legal violation has occurred and imposing the prescribed penalty are separate matters,” he emphasizes.

According to Mr. Pigasiou, for this reason, consideration could be given to transferring the relevant authority to an independent sanctions enforcement mechanism—a position that is also in line with GRECO’s relevant observations.

The Gap

Another issue concerns the frequency of declarations. The President and members of the government submit a declaration upon taking office and upon leaving office, while a new submission during their term of office is required after five years have elapsed.

GRECO has called for more frequent updates, considering the interval between declarations to be excessively long. In 2025, it determined that its relevant recommendation had not been implemented.

Adonis Pigasiou also addresses this issue, noting that GRECO considers the intervals between declarations to be too long and calls for more frequent updates.

The European Commission also raised the issue again in the 2026 Rule of Law Report, noting shortcomings in both the frequency of declarations and the sanctions. The Commissioner for Legislation has already been asked to draft a new bill to address these issues.

Conflict of Interest

The “Declaration of Assets” is only one part of the broader system for preventing corruption.

As Adonis Pigasiou explains, the “Declaration of Assets” and conflicts of interest are two distinct but interrelated issues.

“The ‘Pothen Esches’ declaration shows what assets and financial interests a public official has. Conflict of interest examines whether these—or other personal and professional relationships—influence or could influence the performance of their duties,” he states.

Here, according to him, there remains a significant weakness. The declaration of a conflict of interest relies heavily on the affected individual themselves, without a corresponding systematic verification mechanism such as the one now in place for “Declaration of Assets” through the Tax Commissioner.

“Consequently, special care must be taken to ensure that the available information is used to prevent and manage actual or potential conflicts of interest,” he notes.

The debate has been going on for years

The debate over the system’s weaknesses has been going on for more than a decade. Legislation on asset declarations has been in place since 2004, while as early as 2014 the European Commission called for a real ability to verify declarations and for deterrent sanctions.

In 2016, GRECO called for further development of the system and a more effective oversight mechanism. Seven years later, the relevant recommendation remained only partially implemented, raising questions about the frequency of audits and whether the findings actually led to sanctions.

The first mass release of tax returns in 2017 was indicative of the situation at the time, as it was accompanied by criticism regarding handwritten entries and inconsistencies in how information was filled out.

The Reform of the Reform

More than twenty years after the initial legislation, Cyprus’s “Pothen Esches” system now has more effective oversight tools, ranging from asset reconciliation to access to government data and the lifting of confidentiality.

Adonis Pigasiou summarizes the changes that, in his view, could further strengthen the system along four key axes: more frequent declarations, clear and uniform penalties, greater independence in their enforcement, and better coordination among auditing bodies.

As he points out, there are currently different agencies responsible for “Pothen Esches,” conflicts of interest, so-called “revolving doors,” and corruption, which creates a risk of both overlaps and gaps.

“The main challenge, therefore, is the transition from formal compliance to substantive and consistent implementation,” he concludes.