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An integral aspect of the obligations imposed by EU sanctions is the obligation to report information on funds and economic resources that have been frozen or should have been treated as frozen as a result of designation of individuals or entities in the EU Sanctions List.

Background

Restrictive measures, or sanctions, are one of the EU's tools to promote the objectives of the Common Foreign and Security Policy. These include safeguarding the EU's values, its fundamental interests and security, consolidating and supporting democracy, the rule of law, human rights and the principles of international law, preserving peace, preventing conflicts and strengthening international security.

The reporting obligations until July 2022

Pursuant to Article 8 of Council Regulation (EU) No 833/2014 (the Regulation) as it applied until July 2022, all persons in an EU jurisdiction were required to supply to the Member States and to the European Commission any information “which would facilitate compliance with the Regulation”. This included, in particular, information on assets already treated as frozen.

The reporting obligations after July 2022

The now-reinforced Article 8 explicitly requires persons in an EU jurisdiction to also report any information in their possession about assets not yet treated as frozen. This could include, for instance, assets concealed by the listed persons or assets not adequately handled somewhere in the European Union. In addition, Article 8 now applies “notwithstanding the applicable rules concerning reporting, confidentiality and professional secrecy”. In other words, it would trump relevant agreements entered by the EU operators in question, who would be obliged to report all relevant data including names, individual assets and dates of transfers.

Pursuant to Article 8 of the Regulation, natural and legal persons, entities and bodies have an obligation to provide to the national competent authorities with detailed information on, as well as information on funds and economic resources owned, held or controlled by natural or legal persons, entities or bodies on the list that have been the subject of any move, transfer, alteration, use of, access to or dealing during the two weeks prior to the listing. 

In particular, natural and legal persons, entities and bodies shall: 

  • to supply immediately and within two weeks of obtaining such information, any information which may facilitate the application of this regulation, such as:
    • information on funds and economic resources that have been frozen;
    • information held on funds and economic resources within the territory of the European Union owned, held or controlled by designated natural or legal persons, entities or bodies, which have not been treated as frozen by the natural and legal persons, entities and bodies that are obliged to freeze them, to the competent authority of the Member State in which they reside or are located; and
    • information held on funds and economic resources within the territory of the European Union owned, held or controlled by designated natural or legal persons, entities or bodies and which have been the subject of any move, transfer, alteration, use of, access to or dealing, to the competent authority of the Member State in which they reside or are located.
  • to cooperate with the competent authority in any verification of such information.


Scope of information

The information regarding the funds and economic resources frozen shall include at least the following:  

  • information to identify the natural or legal persons, entities or bodies, in whose ownership, possession or control the frozen funds and economic resources, including their name, address and VAT identification number or tax identification number; 
  • the amount or market value of those funds or economic resources at the reporting date and at the date of freezing; and 
  • the types of funds broken down into a number of listed categories as well as cryptocurrencies and other relevant categories. For each of these categories and where available, the quantity, location and other relevant characteristics of the funds or economic resources.  


How the information is disclosed to the Cyprus Authorities

An Excel spreadsheet needs to be filled in and sent electronically by email to the Ministry of Finance at the email address: This email address is being protected from spambots. You need JavaScript enabled to view it.

Any information provided or received by the Ministry of Finance will only be used for the purposes for which it was provided or received.  The Ministry of Finance will handle all information received in accordance with the applicable legislation on Personal Data Protection legislation. 

Penalties for non-compliance

Non-compliance with the disclosure obligation will be considered as participation in activities that have the object or effect of circumventing the measures referred to in Article 2 of the Regulation by committing a criminal offence in accordance with the provisions of Law 58(I)/2016. 

Exceptions

It should be noted however that EU sanctions legislation guarantees in particular the right to an effective remedy and the right to defence, as laid down in the Charter. Therefore, in principle, while the reinforced reporting obligation would cover most services and activities linked to listed persons, it should not cover information received as part of legal representation in court proceedings.

EU sanctions law is to be applied in line with all other rights and freedoms in the Charter, including the right to protection of personal data. Article 8(3) already indicates that any information provided or received in accordance with that article must be used “only for the purposes for which it was provided or received”.

For more information, please contact any of our lawyers in the AML Compliance and Sanctions team or at This email address is being protected from spambots. You need JavaScript enabled to view it.

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