Cyprus government announces Working Group on Russia-Belarus sanctions
On 14 March 2022, the Ministry of Finance in Cyprus issued an announcement on specific processes that the government will adopt in relation to EU and international sanctions and restrictive measures on Russia and Belarus.
The announcement outlines important developments in the administration of EU sanctions in the jurisdiction including the following:
- A working group has been established (the Working Group) to deal with the coordination of procedures for the implementation of financial sanctions, giving guidelines to economic operators. The group comprises key ministries of government and national competent authorities including the Central Bank and the Cyprus Securities and Exchange Commission (CySEC).
- Processes for the examination of requests for exceptions from EU sanctions (ie licence requests) imposed Russian/Belarussian designated persons. The Working Group will also address questions of clarification on the sanctions and will act as a focal point to exchange views, circulating relevant information and, where possible, clarifying questions on the correct interpretation and application of the relevant EU sanctions.
The announcement clarifies that the Russia-Ukraine Working Group will not provide legal advice to the private sector, nor will it replace the operation of existing sanctions committees in Cyprus.
Outline of existing sanctions authorities in Cyprus
The existing committees comprise the Financial Sanctions Advisory Committee (Συμβουλευτική Επιτροπή Οικονομικών Κυρώσεων or SEOK) and the Unit for the Implementation of Sanctions (Μονάδα Εφαρμογής Κυρώσεων, MEK or Unit).
The Ministry’s announcement reminds banks and other payment/credit institutions in Cyprus that they should apply for licences (and related) from SEOK rather than the Unit in the first instance.
The announcement confirms that SEOK will implement EU principles when issuing licences. Namely that they should be issued mainly in the following situations:
- If necessary to meet the basic needs of the designated natural or legal persons, entities or bodies and their dependent family members, including payments for alimony, rent or mortgage, medicines and medical treatment, taxes, premiums and charges to utilities
- If intended solely for the payment of reasonable professional remuneration or to cover the costs associated with the provision of legal services
- If intended solely for the payment of fees or charges for services relating to the ordinary maintenance or safekeeping of frozen funds or financial resources
- If it is necessary for extraordinary expenses, provided that the relevant competent authority has notified the other Member States and the Commission of the reasons why it considers that special authorisation should be granted, at least two weeks before the authorisation is granted
The Unit examines requests submitted by interested parties (eg Cyprus citizens, Cyprus companies, law firms/audit firms, financial institutions but not credit institutions) regarding the authorisation/approval processes provided by the relevant resolutions of the Security Council/UN and EU Regulations.
Further information on the Unit can be found here.
The Working Group will issue questions and answers (Q&A) to assist and guide stakeholders and the public.
The press release can be found here.