On 25 February 2022, the Cyprus Securities and Exchange Commission (CySEC) issued Circular C489 advising all Regulated Entities of their obligation to implement all relevant restrictive measures imposed by the Council of the European Union (EU) and competent organisations as part of the targeted restrictive measures against Russia in response to the crisis in Ukraine.

The obligations of Regulated Entities include taking mandatory actions/measures such as freezing assets and prohibiting access to funds for listed individual and entities (designated persons), where applicable. The EU Council’s Restrictive Measures are legally binding for the Republic of Cyprus and monitoring is imperative.

CySEC expects that Regulated Entities:

• Follow the developments on the imposition of Sanctions / Restrictive Measures;
• Assess or reassess money laundering and financing of terrorism risks in all business relationships with persons subject to Sanctions/Restrictive Measures.
• Avoid the commencement of any business relationship with persons subject to Sanctions/Restrictive Measures.
• In the case of a person that is an existing customer/business relationship and is subject to Sanctions/Restrictive Measures, thoroughly examine the actions/measures that must be implemented.
• In the case of a person that is an existing customer/business relationship and is subject to Sanctions/Restrictive Measures, inform CySEC, by Thursday, 3 March 2022, at the latest, using the email address aml@cysec.gov.cy, whether they have such business relationships or not along with all relevant details.
• In the case of further Restrictive Measures/Sanctions which may be imposed against Russia in response to the crisis in Ukraine, all Regulated Entities must inform CySEC within a reasonable timeframe of any affected business relationships that they may have.

Reporting and notification

Furthermore, CySEC expects that Cyprus Investment Firms (CIFs) assess the risks arising from the targeted restrictive measures and where these significantly affect their operations, their capital adequacy and/or the funds they hold, either on their own or on behalf of their customers, to inform CySEC at the email address prudential@cysec.gov.cy on the measures that have been taken to address the above-mentioned risks by Thursday, 3 March 2022, at the latest.

In addition, CySEC draws the attention of Regulated Entities to the US Office of Foreign Assets Control (OFAC) Specially Designated Nationals And Blocked Persons List (SDN), which is updated regularly, when assessing the money laundering and terrorist financing risks associated with business and client transactions, as well as other relevant Sanctions / Restrictive Measures imposed by third countries such as United Kingdom’s Office of Financial Sanctions Implementation, as per Circulars C266, C337 and C475.

CySEC is advising all interested parties to continuously monitor the section entitled “Sanctions/Restrictive Measures” on CySEC’s website for further notifications and any additional EU Council’s Restrictive Measures and ensure full compliance with the Law and relevant CySEC’s Circulars.

CySEC’s Circular C489 listing all the requirements to implement the sanctions against Russian can be found here.

CySEC’s Circulars C266, C337 and C475 can be found here, here and here.