Summary of CySEC's Circular C465
Memo #39-2021
CySEC Circular No: C465
Date: 12/08/2021
Subject: Revised EBA Guidelines on ML/TF risk factors
Purpose: To inform Regulated Entities for the Revised EBA ML/TF Risk Factors Guidelines on customer due diligence and assessment of the ML/TF risk.
In Summary:
CySEC has issued the Circular C465 on 11/08/2021 to inform the Cyprus Investment Firms (‘CIFs’), Administrative Service Providers (‘ASPs’), Internally managed Undertakings for Collective Investment in Transferable Securities (‘UCITS’), UCITS Management Companies (‘UCITS MC’), Alternative Investment Fund Managers (‘AIFMs’), Internally managed Alternative Investment Funds (‘AIFs’), Internally managed Alternative Investment Funds with Limited Number of Persons (‘AIFLNPs’) and Companies with sole purpose the management of AIFLNPs (‘AIFLNPs MC’), about the Revised EBA Guidelines on customer due diligence and the factors credit and financial institutions should consider when assessing the money laundering (ML) and terrorist financing (TF) risk associated with individual business relationships and occasional transactions (‘The ML/TF Risk Factors Guidelines’) under Articles 17 and 18(4) of Directive (EU) 2015/84.
The ML/TF Risk Factors Guidelines take into account changes to the EU Anti Money Laundering and Counter Terrorism Financing (AML/CFT) legal framework and new ML/TF risks.
The ML/TF Risk Factors Guidelines include new guidance on ML/TF risk assessments, customer due diligence for beneficial owners and compliance with the provisions on enhanced customer due diligence related to high-risk third countries.
The Regulated Entities should note that the Revised Risk Factors Guidelines will enter into force on 26 October 2021 and upon the date of application, the original risk factors guidelines (JC/2017/37) will be repealed and replaced with the revised guidelines.
CySEC notes that Regulated Entities should apply these Guidelines for the purposes of complying with the requirements set out, at a minimum, in Articles 58, 58A, 61(2), 62(2), 62(6), 63, 64, 66(2A) of the Prevention and Suppression of Money Laundering and Terrorist Financing Laws of 2007-2021.
CySEC also notes that Regulated Entities are expected to fully comply with these Revised ML/TF Risk Factors Guidelines and be able to demonstrate that the AML/CFT policies, controls and procedures that have in place are appropriate in view of the ML/TF risks that have been identified.
The Revised EBA ML/TF Risk Factors Guidelines can be found on the following link: https://www.cysec.gov.cy/CMSPages/GetFile.aspx?guid=a1569681-464d-4a8c-8206-749d94340da1
