Summary of CySEC's Circular C489

Memo #07-2022
CySEC Circular No: C489
Date: 28/02/2022
Subject: EU Council's Restrictive Measures and other sanctions against Russia in response to the crisis in Ukraine
Purpose: To remind Regulated Entities of their obligation to implement all relevant restrictive measures  imposed by the EU Council of the European Union and competent organisations as part of the targeted restrictive measures against Russia. Also to submit to CySEC necessary information.

In Summary:

CySEC has issued the Circular C489 on 25/02/2022 to remind 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 under Law 81(I)/2020, 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.

Specifically, CySEC informs that Regulated Entities must implement Restrictive Measures that are adopted by the EU Council under the Provisions of the United Nations Security Council Resolutions or Decisions (Sanctions) and the European Union Council’s Decisions and Regulations (Restrictive Measures) Law of 2016 (L. 58(I)/2016).

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 informs that expects all Regulated Entities to take the following action:

1. Follow the notifications outlined in the Section entitled “Sanctions/Restrictive Measures” on CySEC’s website and ensure that the Sanctions/Restrictive
    Measures contained therein are implemented.

2. Assess or reassess money laundering and financing of terrorism risks in all business relationships with persons subject to Sanctions/Restrictive
    Measures.

3. Avoid the commencement of any business relationship with persons subject to Sanctions/Restrictive Measures.

4. In the case of a person that is an existing customer/business relationship and is subject to Sanctions/Restrictive Measures, Regulated Entities must
    thoroughly examine the actions/measures that must be implemented, in accordance with the relevant EU Council’s Decisions and Regulations.

CySEC further informs that all  Regulated Entities are required to 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 and to include on this notification, if the case is, the name of all individuals/businesses that are subject to the restrictions, the type of the assets that have been frozen (e.g. cash, financial instruments) and their total value.
 
CySEC also informs that 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, using the email address aml@cysec.gov.cy, whether they have such business relationships or not and to include on this notification, if the case is, the name of all individuals/businesses that are subject to the restrictions, the type of the assets that have been frozen (e.g. cash, financial instruments) and their total value.
  
Furthermore, CySEC informs that it expects Cyprus Investment Firms (CIFs) 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 at the email address prudential@cysec.gov.cy about the measures that have been taken to address the above-mentioned risks by Thursday, 3 March 2022, at the latest.
 
In addition, CySEC reminds Regulated Entities 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.

The targeted restrictive measures against Russia can be found on the following link: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L:2022:042I:FULL&from=EN 

Read the CySEC Circular C489

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