Sanctions referred to restrictions and/or prohibitions on activity with targeted countries, governments, groups, natural and legal persons, and industries that are imposed by bodies such as the United Nations and the European Union. They can include a variety of measures ranging from arms embargoes, travel bans, asset freezes, reduced diplomatic links, reductions/ cessation of any military relationship, flight bans, suspension from international organizations, withdrawal of aid, trade embargoes, restriction on cultural/ sporting links and other.
- Compliance with Sanctions
It is noted that sanctions are of strict liability in nature and as such require absolute compliance. If any person, either physical or legal person, is in breach of its sanctions-related obligations, will be guilty of a criminal offence and will bear substantial financial penalties and reputational damage.
Absolute compliance means that firms are at risk of breaching their obligations as soon as a person or entity they provide services to is listed in an EU Regulation or UNSCR. Therefore, sanctions compliance is a fundamental element of a robust and effective financial crime prevention program.
- Regulatory Framework
The Institute of Certified Public Accountants of Cyprus (ICPAC) has recently proceeded with the issuance of a Directive for Compliance with the provisions of UN Security Council Resolutions (Sanctions) and the Decisions/Regulations of the Council of the European Union (Restrictive Measures).
As per the above directive, all ICPAC members are obliged to have in place a Sanctions Compliance Program which should include as a minimum, the following:
- The establishment of a sanctions risk assessment;
- The development of policies, procedures, systems, and controls;
- Screening processes;
- Reporting matches and breaches of the sanctions regime;
- Training and awareness, and
- Record keeping.
ICPAP has also issued a Paper according to which all ICPAC members are obliged to design a Sanctions Manual and implement firm-wide risk assessment policies and procedures required by the AML Law and directives & Sanctions Law and directives. Through the risk assessment policies and procedures, the firms will identify and assess the Money Laundering, Terrorist Financing and Sanctions Risks according to a specific methodology, indicating the level of each risk, and apply mitigating measures to the identified risks.
- How SCLAW can assist you:
SCLAW Compliance Team can undertake the preparation and establishment of the relevant Sanctions Policy and Firm-Wide Risk Assessment. Through our services, we identify, evaluate and understand the risks involved in each Company and we provide relevant recommendations to the entities in fulfilling their obligations under the relevant laws and directives.
If any assistance or further clarifications are needed for this matter, please do not hesitate to contact our office.
For further information or clarifications, please contact S. Constantinou & Associates LLC at [email protected] / +357 22 421190