Sanctions Lists: The effects in Cyprus

Posted on 24 Jan 2019

“Sanctions”, or “Restrictive Measures”, are imposed on natural and legal persons in order to prevent and limit violation of International Law, human rights and politics.

The Republic of Cyprus, as a member of the United Nations (UN) and the European Union (EU) has the obligation to implement and enforce:

  • The International Sanctions issued via a relevant Resolution or Decision adopted by the Security Council of the UN under Chapter VII of the Charter of the United Nations; and
  • The Restrictive Measures adopted by the Council of the EU via relevant Decisions and Regulations, within the framework of the Common Foreign and Security Policy.

Article 215 of the Treaty on the Functioning of the EU allows the European Council to adopt Restrictive Measures against natural or legal persons and groups or non-State entities. The Decisions and Regulations of the Council of the EU constitute in their entirety part of EU Law and therefore, supersede the national legislation of EU member states such as Cyprus.

Article 41 of the UN Charter allows the Security Council of the UN to issue sanctions, such as complete or partial interruption of economic relations and means of communications, and severance of diplomatic relations. All Members of the UN must comply with these sanctions, according to Article 25 of the UN Charter. 

In 2016 the Cyprus Parliament enacted a legislation relating to the Implementation of the Decisions of the Security Council of the UN (Sanctions) and the Decisions and Regulations of the Council of the European Union (Restrictive Measures) Law of 2016 (58(I)/2016). The Law states the obligation of the Republic of Cyprus to enforce and implement UN Sanctions and EU Restrictive Measures. Further, the Law provides that any person who violates such sanctions or measures is guilty of an offence. The sentence of such conviction may either be imprisonment or a fine.

  • If a natural person, imprisonment for up to 2 years or fine up to €100.000 or both.
  • If legal entity, a fine of up to €300.000.

Consequently, both natural and legal persons in Cyprus must be aware of the UN and EU lists, and refrain from acting against the sanctions and measures imposed.

Apart from UN Sanctions and EU Restrictive Measures, Cyprus has no legal obligation to enforce or implement any other sanctions.

With regard to measures issued by the Office of Foreign Asset Control of the US Department of Treasury (OFAC) and the Financial Crimes Enforcement Network, it appears that bypassing these measures does not give rise to an apparent offence in Cyprus.

However, the need for compliance arises from the corresponding relationship between Cypriot financial institutions and financial institutions of the United States, as well as from the possible implications for Cypriot individuals and legal entities. Persons who override or assist in the override of such measures may find themselves included in restrictive measures issued by OFAC.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought on each particular case.