Non-compliance with Directive 93/13/EEC

Subject: Non-compliance with Directive 93/13/EEC

The omnibus bill submitted by the Government of the Republic of Cyprus to the Cypriot Parliament on unfair terms falls seriously short of compliance with Council Directive 93/13/EEC.

While it allows a consumer to file for damages and an interim injunction for the immediate removal of an unfair clause or the adoption of remedial measures (Article 62(3) of the bill), it does not provide for the possibility of issuing an interim order suspending the sale of a mortgaged property as a temporary measure required for the effective implementation of Directive 93/13/EEC.

In the light of the above:

1. Does the Commission agree that this omission constitutes a continued infringement of EU law, failing to implement Directive 93/13/EEC effectively?

2. What steps does it intend to take to guarantee the right to suspend a sale in Cyprus pending examination by the court of an allegedly unfair clause and protect the right to housing in cases where the sale relates to a first home?

Answer given by Mr Reynders on behalf of the European Commission

(26 May 2021)

Directive 93/13/EEC on unfair contract terms (1), as interpreted by the Court of Justice of the European Union, requires Member States to adopt all the measures necessary to ensure that consumers are not bound by unfair terms and that they have effective remedies against such terms. (2) This includes the possibility for national courts to grant interim measures for stopping or suspending enforcement procedures pending the assessment of the potential unfairness of contract terms on which such procedures are based.

As mentioned in its reply to written questions E-004376/2020 and E-004377/2020 (3) as well as P-000374/2021 (4), the Commission has opened an infringement procedure against Cyprus for ineffective enforcement of Directive 93/13/EEC and Directive 2005/29/EC (5), and delivered, on 18 February 2021, a reasoned opinion to Cyprus in accordance with Article 258 of the Treaty on the Functioning of the EU (6). Cyprus replied on 16 April 2021. The Commission will assess the reply. If the reply is not deemed satisfactory and the necessary changes are not implemented, the Commission will look into possible next steps.

The Commission is also investigating new complaints in respect of the application in Cyprus of Directive 93/13/EEC in particular in enforcement procedures. In this context, the Commission will examine any relevant laws adopted by Cyprus.

Should the Commission conclude that Cyprus violates additional obligations stemming from Articles 6 and 7 of Directive 93/13/EEC to provide consumers with appropriate remedies and procedural guarantees, it will consider appropriate steps.

⋅1∙ Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, OJ L 95, 21.4.1993, p.29.

⋅2∙ See Section 5 of Commission Notice — Guidance on the interpretation and application of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer

contracts, OJ C 323, 27.9.2019, p. 4‐92, COM(2019) 5325 final.

⋅3∙ https://www.europarl.europa.eu/doceo/document/E-9-2020-004376-ASW_EN.html

⋅4∙ https://www.europarl.europa.eu/doceo/document/P-9-2021-000374-ASW_EN.html

⋅5∙ Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal

market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (‘Unfair Commercial Practices Directive’), OJ L 149, 11.6.2005, p. 22‐39. ⋅6∙ https://ec.europa.eu/commission/presscorner/detail/en/inf_21_441