Cyprus Securities and Exchange Commission ("CySEC") has recently issued circular C489 (the "Circular"), addressed to Regulated Entities, namely, CIFs, ASPs, UCITS Management Companies, Internally managed UCITS, AIFMs, Internally managed AIFs, Internally managed AIFLNPs, companies with sole purpose the management of AIFLNPs, Crypto Asset Service Providers and Small AIFMs (the "Regulated Entities").
Cyprus Law 58(I)/2016, as regards the implementation of the provisions of (a) the resolutions or decisions of United Nations Security Council (Sanctions) and of (b) the decisions and regulations of the Council of the European Union (Restrictive Measures), provides for the direct application of such Sanctions and Restrictive measures in Cyprus and thus, Regulated Entities are obliged to implement all relevant Restrictive Measures imposed by the Council of the European Union (EU).
Pursuant to the Circular, CySEC directs Regulated Entities to (a) inform themselves of such Sanctions and EU Restrictive Measures and ensure that these are implemented, (b) assess or reassess money laundering and financing of terrorism risks in all business relationships with persons subject to Sanctions/Restrictive Measures and (c) avoid commencement of any business relationships with persons subject to such restrictions or otherwise examine the appropriate actions to be implemented, in the event of existing relationships and in accordance with the applicable regime.
With reference to the latest EU targeted restrictive measures:
- all Regulated Entities are required to implement appropriate
actions/measures and/or freeze immediately all funds and/or
economic resources that are held, administered or managed on their
behalf or on behalf of other persons associated with the business
relationship and inform CySEC, by Thursday 3 March
2022, by an email (email@example.com),
whether they have such business relationships or not, with any
follow-up email as may be required.
- Cyprus Investment Firms (CIFs) are expected to 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 by Thursday 3 March 2022 by an email (firstname.lastname@example.org) about the measures that have been taken to address the above-mentioned risks.
The Circular finally reminds Regulated Entities, in their assessment of their anti-money laundering and terrorist financing risks, to also consider sanctions/ restrictive measures imposed by third countries such as the United States of America or the United Kingdom, as per prior circulars issued by CySEC on the matter.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.