Cyprus

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1. Does Cyprus have a sanctions regime in place?

Yes.

2. Does Cyprus implement UN sanctions?

Yes. In particular, the Republic of Cyprus has accepted and is bound by the obligations under the Charter of the United Nations (the Charter). Under Article 25 of Chapter V of the Charter, the members of the United Nations have agreed to accept and implement the decisions of the United Nations Security Council (UNSC). The UNSC, under Chapter VII of the Charter imposes sanctions on States and / or countries and / or on individuals and / or other organizations, entities or groups with legal personality or not, for actions that threaten or disturb the peace even for aggressive actions and to this end adopts binding Resolutions or Resolutions calling on the members of the United Nations to implement these sanctions.

It should be also noted that the Central Bank of Cyprus (CBC) has recently introduced a Directive for Compliance with the provisions of UNSC resolutions and the decisions / regulations of the Council of the European Union (“CBC Directive”).

3. Does Cyprus implement an autonomous sanctions regime?

Sanctions are adopted and implemented in accordance with International Law. As a member of the UN and a member state of the EU, Cyprus has an obligation to enforce/implement:

  • International Sanctions by a relevant Decision/Resolution adopted by the UNSC under chapter VII of the UN Charter; and
  • Restrictive Measures adopted by the Council of the EU via relevant Decisions and Regulations, within the framework of Common Foreign and Security Policy (“CFSP”). In particular, pursuant to Article 52 of the Treaty on European Union, the Treaty on European Union (TEU) and the Treaty on the Functioning of the European Union apply to the Republic (TFEU).

In this regard, the sanctions regime of Cyprus is not autonomous but rather dependent on, and aligned with, the guidelines and the decisions of the above-mentioned institutions / organizations.

4. What is the nature of the sanctions regime in Cyprus?

As mentioned above, the membership of Cyprus in international organizations such as the UN and the EU, engenders obligations in terms of complying with the decided measures. Under this prism, the role of Cyprus is that of an implementer of the relevant decisions.

These measures include arms and trade embargoes (mainly restrictions to imports / exports). Moreover, they can take the form of financial restrictions, freezing of assets, and visa or travel bans. It should be noted that these are just some of the means most commonly used to achieve the objectives, according to the situation at hand.

In implementing these measures, Cyprus, as is the case with any other EU country, works in the context of the CFSP. The institutional framework of the CFSP is regulated by specific rules and procedures. As mentioned above, it is defined and implemented by the European Council and the Council of the EU, on the basis of unanimity, except where the Treaties provide otherwise (Article 24 of the TEU). Decisions and Regulations of the Council of the EU in the framework of CFSP (autonomous restrictive measures and incorporation of UNSC sanctions) constitute in their entirety part of EU Law, which supersedes the national legislation of member states. Therefore, these legal acts are legally binding on all EU member states, with Regulations being directly applicable by member states (i.e. they require no implementing legislation). As is set out by Article 297 (2) of the TEC, Decisions and Regulations of the Council of the EU, which are adopted in the framework of CFSP, are then published in the EU Official Journal and take effect on the date specified therein.

The CBC Directive provides additional guidance to persons supervised by CBC including guidance on the Sanctions Policy of the regulated institutions , aspects of the compliance programs and the relevant risk assessments, procedures, systems controls etc.

5. Does Cyprus maintain a list of sanctioned individuals and entities?

No, it follows the UN and EU lists.

6. Are there any other lists related to sanctions?

No. However, it should be noted that Cyprus regulated professionals should also take into account -though not obligatorily- the US Office of Foreign Assets Control (OFAC) sanctions list for secondary sanctions within the context of AML compliance measures (presented below) in the context of the risk profiling of a client. The latest directive of Cyprus Bar Association (CyBar) refers to the US Sanctions list and recommends that regulated professionals should also take it into consideration within the framework of their duties. Apart from the above, Cyprus, as any other country, reserves its legitimate right to initiate criminal investigations whenever there is a reasonable suspicion that possible illegal actions have taken place and, to impose any appropriate penalties after judicial proceedings, if the Cyprus law is applicable.

7. Does Cyprus have a licensing or authorization system in place?

Cyprus does not have a single competent authority with a mission to grant all-nature licenses or authorisations. Instead, the Cyprus licensing/authorisation system consists of various competent authorities each of which, is responsible for a particular area/sector.

For example, the CBC is, inter alia, the competent authority for the transfer of funds and for any applications and notifications relating to the granting of licenses with respect to the transfer of such funds, falling within the scope of the law which provides for the Implementation of the Provisions of the Resolutions or Decisions of the United Nations Security Council (Sanctions) and the Decisions and Regulations of the Council of the European Union (Restrictive Measures) (L. 58 (I) of 2016) (“Sanctions Law”).

In addition, the CBC is responsible for the compliance of the supervised entities with the targeted financial sanctions decided and imposed by the UN Security Council and the EU. For the purpose of coordinating the imposed measures, the CBC works in close collaboration with the Ministry of Foreign Affairs and the Ministry of Finance. They cooperate on the exchange of information and the timely transmission of the lists referring to the countries and/or persons the sanctions have been imposed on and, to the supervised persons (this mainly relates to fund- freezing measures and other financial resources).

In relation to the sanctions imposed by the UNSC Resolutions and the restrictive measures imposed by the EU Council Regulations, the CBC also participates in two committees which are under the auspices of the Ministry of Finance, namely the Advisory Body on Economic Sanctions (SEOK) and the Unit for the Implementation of Sanctions in the Financial Sector (MEK).

Another example of competent authority is the Trade Service of the Ministry of Energy, Commerce and Industry, which is ,among others, responsible for the export of products and services of Cyprus abroad (i.e. agricultural/industrial products, professional services) and the issuing of import/export licenses. More specifically, the Licensing Section of Trade Services, is responsible for the issuance of export licences for dual use goods, arms and military equipment as well as for the issuance of import licences for textile and steel products.

8. What are the consequences for a breach of sanctions in Cyprus?

In Cyprus, any infringement committed by a public administrator, who does not comply with the EU regulations, constitutes a criminal offence and is dealt on the basis of invoking Articles 136 and 137 of the Cyprus Criminal Code (Cap. 154). In terms of persons who are supervised by the CBC, they shall make available to the CBC (when so requested), any documents, records, files as well as any other relevant information for the purposes of assessing the degree of compliance with the Sanctions’ Law (L.58(Ι)/2016), the CBC Directive and the relevant guidelines currently in place. In the case where any institution or person under the supervision of the CBC refuses to comply with the CBC’s request to provide the said information within a specified deadline, or, in the case where that person or institution refuses to provide the requested information or, provides insufficient, deficient, false or forged information, the CBC has the power to take all and any of the measures mentioned in article 3(2) of the Sanctions Law. Section 3(2) of the Sanctions Law provides, inter-alia, that the supervisory authorities (i.e. CBC) may take the measures provided under section 59(6) of the AML/CFT Law (Laws of 2007-2019) where a person, subject to their supervision, fails to comply with the respective directives/law provisions. Pursuant to Section 59(6) of the AML/CFT Law, the supervisory authorities may take, among others, the following measures in cases where a person, that is under their supervision, fails to comply with the respective law provisions or with the directives issued by the competent supervisory authorities: (a) impose an administrative fine of up to one million euro (€1.000.000) having first given the opportunity to the supervised person to be heard, (b) in the event that the culpable offender derived a benefit from the breach, which benefit exceeds the administrative fine referred to in paragraph (a), impose an administrative fine up to an amount of at least twice the amount of the benefit derived from the breach, (c) in the event the breach continues, impose an administrative fine of up to one thousand euro (€1.000) for each day the breach continues; (d) amend or suspend or withdraw the license of operation of the supervised person, (e) require the supervised person to take such measures within a specified time frame, as may be set by the supervisory authority in order to remedy the situation, (f) impose a temporary ban against any person discharging managerial responsibilities in an obliged entity, or any other natural person, held responsible for the breach from exercising managerial functions in obliged entity; and (g) impose an administrative fine on a person discharging managerial responsibilities in an obliged entity or on any other person, whenever it is established, that the failure to comply was due to his/her fault, intentional omission or negligence. Additionally, in accordance with Section 6 of the Sanctions Law, if a competent authority, ascertains that a person is carrying out any act in breach of any of the provisions of the UNSCRs or the EU Regulations/Decisions, it reports the infringement to the Police for a relevant investigation. Further, as per Section 4 of the Sanctions Law, any person who violates the provision of the law, is guilty of an offence and subject to the reservation of any other legal provision establishing higher penalty. In the case of a conviction the person is subject: (a) if it is a natural person, to imprisonment not exceeding 2 years or a pecuniary penalty not exceeding €100,000 or both penalties; and (b) if it is a legal person, to a pecuniary penalty not exceeding €300,000.

9. Who are the relevant regulators in Cyprus and what are their contact details?

The role of the Ministry of Foreign Affairs with regard to both UNSC sanctions and EU restrictive measures is, by-and-large, coordinative. It must be noted that the Ministry of Foreign Affairs is neither responsible for issuing approvals/licences and/or official opinions/advice on sanctions’ issues, nor for interpreting the legal acts by which UNSC sanctions and EU restrictive measures are adopted.

Ministry of Foreign Affairs Presidential Palace Avenue, 1447 Nicosia Cyprus T: (+357) 22 651000 F: (+357) 22 661 881 E: minforeign1@mfa.gov.cy http://www.mfa.gov.cy

Law Office of the Republic of Cyprus

Unit for Combating Money Laundering (MOKAS), PO Box 23768, 1686 Nicosia, Cyprus

Central Bank of Cyprus

Department of Licensing and Regulatory Compliance, PO Box 25529, 1395 Nicosia Cyprus

T: (+357) 22 714 300 F: (+357) 22 374 940 E: BSRD.compliance@centralbank.gov.cy, https://www.centralbank.cy/

Ministry of Finance

Advisory Body on Financial Sanctions, Corner of Michael Karaoli & Gregori Afxentiou, 1439 Nicosia, Cyprus

T: (+357) 22 601 172 F: (+357) 22 602 748 E: registry@mof.gov.cy http://www.mof.gov.cy

Customs and Excise Department

Ministry of Finance, Customs and Excise Department, Corner of Michael Karaoli & Gregori Afxentiou, 1439, Nicosia, Cyprus

T: (+357) 22 601 705, +357 22 601 670, +357 22 601 680 F: (+357) 22 302 018 E: andronikou@customs.mof.gov.cy, sconstantinou@customs.mof.gov.cy, rconstantinou@customs.mof.gov.cy www.mof.gov.cy/ce

Ministry of the Interior

Civil Registry and Migration Department 1457, Nicosia, Cyprus

T: (+357) 22 804 405 F: (+357) 22 403 961 E: migration@crmd.moi.gov.cy www.moi.gov.cy/moi/crmd/crmd.nsf

Department of Lands and Surveys

Ministry of the Interior, Headquarters of the Department of Lands and Surveys, 29 Michalakopoulou, 1455 Nicosia, Cyprus

T: (+357) 22 804 900, +357 22 804 817 F: (+357) 22 804 928 E: director@dls.moi.gov.cy

W: www.moi.gov.cy/dls

Ministry of Transport

Communications and Works, Ministry of Communications and Works Department of Merchant Shipping, Acheon 28, 1424 Nicosia, Cyprus

Department of Civil Aviation

Ministry of Communications and Works Central Offices of Department of Civil Aviation, Pindarou Street 27, Alpha Business Center, 1429 Nicosia, Cyprus

T: (+357) 22 404 122, +357 22 404 136 F: (+357) 22 766 547 E: mioannou@dca.mcw.gov.cy

Ministry of Energy

Commerce, Industry and Tourism, Department of Registrar of Companies and Official Receiver, Corner of Makarios III Avenue & Karpenisiou Street, “XENIOS” Building, 1427 Nicosia, Cyprus

T: (+357) 22 404 301, +357 22 404 302 F: (+357) 22 304 887 E: deptcomp@drcor.mcit.gov.cy, www.mcit.gov.cy/drcor

Trade Services (Imports/Exports Licensing Section)

Ministry of Energy, Commerce, Industry and Tourism, Trade Services (Imports/Exports Licensing Section), 6 Andrea Araouzou Street, 1421 Nicosia, Cyprus

T: (+357) 22 867 100, +357 22 867 332, +357 22 867 197 F: (+357) 22 375 120, +357 22 375 443 E: xxenopoulos@mcit.gov.cy, www.mcit.gov.cy/ts

Energy Service

Ministry of Energy, Commerce, Industry and Tourism, Energy Service, 6 Andrea Araouzou Street, 1421 Nicosia, Cyprus

T: (+357) 22 867 100 F: (+357) 22 375 120, +357 22 304 759 http://www.mcit.gov.cy/mcit/energyse.nsf/index_en/index_en?OpenDocument

Ministry of Justice and Public Order

125 Athalassas Avenue, 1461 Nicosia, Cyprus

T: (+357) 22 805 920/1 F: (+357) 22 805 969 E: registry@mjpo.gov.cy www.mjpo.gov.cy

Cyprus Police

European Union and International Police Cooperation Directorate, Cyprus Police, Cyprus Police Headquarters

T: (+357) 22 607 825 F: (+357) 22 607 894 E: euipcd@police.gov.cy www.police.gov.cy

Cyprus Securities and Exchange Commission

Cyprus Exchange and Securities Commission, 27 Diagorou Str, 1097 Nicosia, PO Box 24996, 1306 Nicosia

T: (+357) 22 50 6600 F: (+357) 22 50 6700 E: info@cysec.gov.cy www.cysec.gov.cy/en-GB/home/

Contributor law firm

Rafaella Michail Associate

Ioannis Sidiropoulos Associate

Elias Neocleus & Co LLC

Neocleous House 195 Makarios III Avenue 1-5th, Limassol CY-3030 Cyprus P.O.Box 50613

T: (+357) 22 110 110 F: (+357) 22 110 018

T: (+357) 25 110211 rafaella.michail@neo.law

ioannis.sidiropoulos@neo.law http://www.neo.law

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