On the 10th of May 2019 the new and updated CySEC Directive on the Prevention and Suppression of Money Laundering has only been available in the Greek Language. As of today thought CySEC has published its unofficial English Translation of the CySEC Directive.
The CySEC Directive is available on the website of CySEC by clinking on this link.
What changed in the CySEC Directive?
The CySEC Directive of the 10th of May 2019 repealed the previous directive with an aim to update the regulatory framework and bring it in line with the 4th AML Directive and the amendments to the prevention and suppression of money laundering law (Law. 81(I)/2019, Law 158(I)/2018, 13(I)/2018).
In accordance with Circular C319 the following amendments have been performed:
The definition ‘Financial Organization’ is replaced by the definition ‘Obliged Entity’. The said definition refers to the categories of persons that fall under the scope and obligations of the Directive.
Appointment of Board Member
One member of the Obliged Entity’s Board of Directors should be designated as the responsible person for the implementation of the legal framework related to the prevention and suppression of money laundering and terrorist financing. Information about the said designation is provided in paragraph 5A of the Directive.
Appointment of Alternate AML Compliance Officer
The Obliged Entity should appoint temporarily an Alternate AML Compliance Officer, when the AML Compliance Officer is absent. It is clarified that the provisions of paragraph 8 of the Directive do not apply when the AML Compliance Officer resigns from his position, since in such case the Obliged Entity should appoint a new AML Compliance Officer. Information regarding the Alternate AML Compliance Officer’s appointment is provided in paragraph 8 of the Directive
Assessment of money laundering and terrorist financing risk
The Obliged Entity, when assessing the risk of money laundering and terrorist financing should take into account, among others, the Risk Factor Guidelines and any guidelines/guidance issued by the Financial Action Task Force (FATF).
Third Party Reliance
The Obliged Entity that relies on a third party for the customer due diligence measures and identification procedures should apply the measures and procedures described in the present paragraph.
Types of documents
The Obliged Entity may collect original documents and true copies of the original documents. Additionally, provided that some conditions are met, copies may be collected, as well as, it may use electronic means for the collection of data and information.
United Nations (‘UN’) and European Union (‘EU’) Sanctions
Regimes The Obliged Entity should apply the measures and procedures described in the present paragraph related to the UN and EU Sanctions Regimes.
Non-exhaustive list of Factors and Measures
The Fourth Appendix of the Directive is a non-exhaustive list of: (a) factors of potentially higher risk, that the Obliged Entity should take into account during its risk based approach and 2 (b) enhanced customer due diligence measures, which may be applied in high risk cases.
What to do now?
With the update of the directive, obliged entities should critically review the current AML Manual and ascertain what changes need to be made to be compliant with the directive, the 4th AML Directive and the relevant updates to the AML Law.
Particular focus should be had to the new sanctions requirements since in recent days Cypriot companies from the none financial circles have been designated by OFAC (continue reading) and the introduction of a risk based approach subject to the Risk Guidelines.