On 21 April 2021, the Cyprus Securities and Exchange Commission (CySEC) issued circular 437 relating to the onsite inspections performed on Regulated Entities (Members), assessing their compliance with the Prevention and Suppression of Money Laundering and Terrorist Financing Law and the applicable CySEC Directives.
A number of good practices were identified however some common weaknesses were also observed. As a result, CySEC stipulates further recommendations for its Members to implement, in addition to the measures already outlined to enable full compliance.
Good practices identified in the following areas:
- EU/UN Sanctions screening
- AML/Combating Financing of Terrorism (CFT) Risk Assessment
- Ongoing monitoring
- Increased AML/CFT staff training
- AML/CFT internal control measures
- Record keeping
Weaknesses/deficiencies identified in the following areas:
- Customer due diligence (CDD) measures
- AML/CFT risk assessments
- Transaction Monitoring
A continuous effort is required to ensure that the AML/CFT processes are adequate, as the consequences of failing to manage the associated risks are serious and could lead to severe financial and reputational damage to the Members, the industry and the country.
The Circular 437 can be found here.