The Cyprus Securities and Exchange Commission (CySEC) has today released a practical guide on maintaining effective and efficient sanctions screening systems. This guide includes the findings of CySEC's recent assessment on the effectiveness and efficiency of the sanctions screening systems used by regulated entities in Cyprus.

CySEC Conducts Thematic Inspections on Sanctions

The thematic inspections were carried out between April and November 2024. They involved a range of regulated entities, including Cyprus Investment Firms, Alternative Investment Fund Managers, Administrative Service Providers, Funds, Fund Managers, and Crypto Asset Service Providers.

The primary focus of these inspections was to evaluate compliance with the sanctions requirements set out in the United Nations Security Council Resolutions and European Union Council Decisions and Regulations.

"All regulated entities are obliged to have adequate internal policies, procedures and controls in place, for the implementation of the provisions of Sanctions/Restrictive Measures, including screening tools," CySEC’s Chairman Dr George Theocharides said.

CySEC Identifies Gaps in Sanctions Compliance

In particular, the inspections centered on the screening of individuals and entities listed on the UN and EU Sanctions Lists. Additionally, the screening practices concerning US and UK Sanctions Lists were also reviewed. The aim was to assess whether regulated entities are adequately identifying designated persons and complying with these international sanctions.

CySEC's inspections resulted in the identification of several best practices related to sanctions screening. However, the Commission also found that there are areas where the effectiveness and efficiency of the sanctions screening systems used by regulated entities can be improved. The Commission noted that these improvements are necessary for ensuring full compliance with the relevant sanctions regulations.

"Regulated entities should consider the CySEC’s supervisory expectations set out in the Guidance Paper as a benchmark, so as to implement best practices identified in a risk-based and proportionate manner," Theocharides wrote in a letter to the regulated entities.