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.

Δελτίο Τύπου – Η ΕΚΚ δημοσίευσε πρακτικό οδηγό για τη διατήρηση αποτελεσματικών και αποδοτικών Συστημάτων Ελέγχου Κυρώσεωνhttps://t.co/cr3xngWdsO

Press Release – CySEC published practical guide for effective and efficient Sanctions Screening Systemshttps://t.co/UqpKhAnZo5

— CySEC – Cyprus Securities and Exchange Commission (@CySEC_official) February 27, 2025

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.