CySEC tells firms to report relationships with “Golden Passport” holders
The scandal around the so-called “Golden Passports” which has prompted action by the European Union authorities has apparently had implications on the requirements for Cypriot investment firms (CIFs). This is indicated by a circular just issued by the Cyprus Securities and Exchange Commission (CySEC).
Let’s recall that the so-called “Golden Passports” in Cyprus were issued under the Cypriot Investment Program. It enabled eligible applicants to obtain Cyprus сitizenship in just six months through property investment. The investment minimum was €2.2 million.
This program, however, was abandoned in October 2020, following an action by EU authorities.
Today’s circular issued by CySEC concerns firms’ relations with holders of such passports.
CySEC reminds the entities it regulates, including CIFs, that, according to section 58 of the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2007 (the ‘Law’), Regulated Entities must apply adequate and appropriate policies, controls and procedures, which are proportionate to their nature and size, so as to mitigate and manage the risks of money laundering and terrorist financing effectively.
Furthermore, on the basis of section 58A of the Law, Regulated Entities must take appropriate steps to identify and assess the risks of money laundering and terrorist financing which they face, taking into account risk factors, including factors which relate to their customers, countries and geographical areas, products, services, transactions or delivery channels for providing banking services.
In addition, according to section 68B of the Law, Regulated Entities must apply systems and procedures, which make possible the timely response to enquiries of the Cyprus FIU (MOKAS) and CySEC, as to whether they keep or have kept during the last five years a business relationship with specific persons as well as the type of this business relationship.
Taking into account the above-mentioned points, CySEC urges regulated entities to immediately examine their records in order to identify whether they maintain or have maintained during the last five (5) years, a business relationship with customers and/or customers’ beneficial owners who have acquired, either themselves or their spouses and/or their children, Cypriot citizenship under the Cyprus Investment Program (CIP).
Regulated Entities and specifically the member of the board of directors, designated in accordance with section 58D of the Law, as the responsible person for the implementation of the provisions of the Law and of the Directives and/or Circulars issued pursuant thereto, are required to inform CySEC for the results of the investigation. This has to happen no later than Monday, 30 November 2020. Information has to be send to firstname.lastname@example.org.