Summary of CySEC's Circular C501
Memo #16-2022
CySEC Circular No: C501
Date: 15/04/2022
Subject: EU Council's Restrictive Measures against Russia due to its military aggression against Ukraine
Purpose: To draw the attention of Regulated Entities regarding additional restrictive measures of the EU Council imposed against Russia.
In Summary:
CySEC has issued the Circular C501 on 15/04/2022 to draw the attention of 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, regarding additional restrictive measures of the EU Council, dated 8 April 2022, imposed against Russia due to its military aggression against Ukraine.
The said restrictive measures impose, inter alia, restrictions on trusts (Article 5m of COUNCIL REGULATION (EU) 2022/576).
The Ministry of Finance has issued a relevant announcement, dated 13 April 2022, which provides clarifications regarding Article 5m of COUNCIL REGULATION (EU) 2022/576 on trusts.
This Circular C501 also refers that the following articles of the COUNCIL REGULATION (EU) 2022/576 of 8 April 2022 have been amended, inter alia:
• Article 5f (paragraph 1)
• Article 5b
Furthermore, this Circular C501 also refers that the following article of the COUNCIL REGULATION (EU) 2022/577 of 8 April 2022 has been amended, inter alia:
• Article 1y (paragraph 1)
CySEC notes that considering the amendments of the these articles, all Regulated Entities affected by the said restrictive measures are expected to inform CySEC by Wednesday, 20 April 2022, at the latest, using the email address aml@cysec.gov.cy, regarding:
1. Article 5f of COUNCIL REGULATION (EU) 2022/576 and Article 1y of COUNCIL REGULATION (EU) 2022/577:
i. 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.
ii. 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.
2. Article 5b of COUNCIL REGULATION (EU) 2022/576:
i. 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 also notes that, further to Circular C489, it is a continuous obligation of the Regulated Entities to report to CySEC the existence of business relationships with persons or entities subject to the EU Council's Restrictive Measures against Russia.
In addition, CySEC reminds Regulated Entities to continuously monitor the Section entitled “Sanctions/Restrictive Measures” on CySEC’s website and 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.
The EU Council additional restrictive measures can be found on the following link: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L:2022:111:FULL&from=EN
The announcement of the Ministry of Finance issued on 13 April 2022 can be found on the following link: http://mof.gov.cy/en/press-office/announcements/1104/?ctype=ar
The Frequently asked questions of EU Council can be found on the following link: https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en#faq
Read the CySEC Circular C501
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