On 10 November 2020, Cyprus Securities and Exchange Commission (CySEC) issued Circular 416 requiring entities to adopt safeguards when dealing with persons who have acquired passports under the Cyprus Investment Programme.
In addition, Circular 416 compels regulated entities to conduct an immediate investigation of their records in order to identify whether they maintain or have maintained, during the last five years, a business relationship with customers or investors who have acquired Cypriot citizenship under the CIP. Further, entities are required to file a report to the CySEC on this within the deadline referred to below.
Once identified regulated entities should:
- Apply adequate and sufficient policies, controls and procedures, so as to mitigate and manage the risks of money laundering (ML) and terrorist financing (TF) effectively
- Take appropriate steps to identify and assess the risks of ML/TF which they face
- Apply systems and procedures to ensure timely dealings with Cyprus FIU (MOKAS) and CySEC
Important: Irrespective of whether business relations have been maintained or not, regulated entities are required to inform CySEC no later than Monday, 30 November 2020, at firstname.lastname@example.org, of the results of the investigation.
Time is therefore of the essence in ensuring that these investigations are undertaken punctually and with regard to the duties and obligations under the ML/TF regime in place.
The regulated entities subject to this requirement include Investment Firms, AIFMs, Administrative Service Providers (ASPs), UCITS management companies and Cypriot collective investment schemes.
CySEC’s Circular can be found here.