CySEC issues circular on fifth wave of EU sanctions on Russia
On 15 April 2022, the Cyprus Securities and Exchange Commission (CySEC) issued circular 501 (Circular 501) drawing the attention of Regulated Entities to the fifth wave of restrictive measures of the European Union, dated 8 April 2022, imposed against Russia due to its military aggression against Ukraine.
Regulated Entities refers to Cyprus Investment Firms, Administrative Service Providers, UCITS Management Companies, internally managed UCITS, AIFMs, internally managed AIFs, internally managed AIF LNPs, companies whose sole purpose is the management of AIF LNPs, Crypto Asset Service Providers and Small AIFMs.
The additional restrictive measures impose, among others, restrictions on trusts (Article 5m of Regulation 833/2014. The Ministry of Finance and the Cyprus Bar Association have issued relevant announcements providing clarifications regarding Article 5m on trusts. Circular 501 states that CySEC has already notified the Regulated Entities regarding the said announcement via the relevant notifications sent for Sanctions/Restrictive Measures.
Circular 501 further informs the Regulated Entities that, among others, the following articles have been amended, regarding;
- Council Regulation (EU) 2022/576 of 8 April 2022, amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine: Article 5f (paragraph 1) and Article 5b have been replaced
- Council Regulation (EU) 2022/577 of 8 April 2022, amending Regulation (EC) No 765/2006 concerning restrictive measures in view of the situation in Belarus and the involvement of Belarus in the Russian aggression against Ukraine: Article 1y has been replaced.
All Regulated Entities affected by the above mentioned restrictive measures, are expected to inform CySEC by Wednesday, 20 April 2022, at the latest, using the email address email@example.com, regarding:
- Article 5f of Council Regulation (EU) 2022/576 and Article 1y of Council Regulation (EU) 2022/577:
- For the appropriate actions/measures taken or intended to be taken by the Regulated Entity for compliance with paragraph 1 of the said Articles, if applicable.
- For the level of exposure of the Regulated Entity, by providing information regarding the business operations (exposure to clients affected as opposed to the total clientele) and the possible impact on the Regulated Entity.
- Article 5b of Council Regulation (EU) 2022/576:
- For the appropriate actions/measures taken or intended to be taken by the Regulated Entity for compliance with paragraphs 1 and 2 of the said Article, if applicable.
CySEC prompts regulated entities of their obligation to report the existence of business relationships with persons or entities subject to the EU Council's sanctions against Russia and it is stressed that the responsibility to report to CySEC constitutes a continuous obligation of the Regulated Entities and requires compliance for both existing EU Council's restrictive measures, and those which may be imposed in the future against Russia for its military aggression against Ukraine.
CySEC also reminds interested parties to continuously monitor the Section entitled “Sanctions/Restrictive Measures” on CySEC’s website, where, inter alia, notifications are sent regarding any additional EU Council’s Restrictive Measures against Russia and also to consult the EU Council’s website for guidance on the implementation of EU Council’s Restrictive Measures, including relevant Frequently Asked Questions, which are continuously updated.
CySEC’s Circular 501 can be found here.
Our recent blog post on Ministry of Finance and Cyprus Bar Association announcements can be found here and our blog post on the fifth EU package of sanctions can be found here.
Our blog post on CySEC’s recent update on Russian sanctions on the reporting and notification obligation can be found here.
The measures implementing the EU’s fifth wave of sanctions imposed on Russia on 8 April 2022 can be found here.