The Cyprus Securities and Exchange Commission (CySEC) on Monday published a practical guide to help regulated entities meet their obligations in combating the financing of weapons of mass destruction.

The initiative aims to increase awareness among regulated entities and provide actionable measures to identify and address potential risks associated with proliferation financing.

“The practical guide provides common definitions and a general understanding, an overview of the domestic and international regulatory framework, together with international standards and obligations,” CySEC stated in its announcement.

The guide offers a comprehensive overview of the responsibilities for regulated entities, highlighting the importance of effective risk assessment and management practices.

It includes a list of risk indicators or red flags, as well as recommended controls and mitigating measures to address potential vulnerabilities.

The Financial Action Task Force (FATF) defines proliferation financing as “the act of providing funds or financial services which are used, in whole or in part, for the manufacture, acquisition, possession, development, export, trans-shipment, brokering, transport, transfer, stockpiling or use of nuclear, chemical or biological weapons and their means of delivery and related materials, including both technologies and dual-use goods used for non-legitimate purposes, in contravention of national laws or, where applicable, international obligations”.

CySEC emphasised that Cyprus implements a robust legal framework to address proliferation financing risks.

This framework aligns with international standards and is based on the Law for the Implementation of the Provisions of the United Nations Security Council Resolutions or Decisions (Sanctions) and the European Union Council’s Decisions and Regulations (Restrictive Measures) of 2016 (Law 58(I)/2016), as well as the FATF recommendations.

Additionally, CySEC pointed to related domestic laws, including the Combating of Terrorism and Victims’ Protection Law of 2019 and the Import and Export of Controlled Items and the Conduct of Controlled Activities Law of 2011.

These laws collectively form the backbone of Cyprus’ efforts to counter proliferation financing and ensure compliance with international obligations.

Regulated entities are required to establish robust policies, procedures, and controls to manage their exposure to proliferation financing risks.

“In cases where a regulated entity identifies suspicious customer transactions or activity, this must be immediately submitted to the Unit for Combating Money Laundering in Cyprus (Mokas),” CySEC said.

To further assist its regulated entities, CySEC has created a dedicated section on its website titled “Terrorism Financing (TF)/Proliferation Financing (PF)”.

This section provides useful resources, notifications, and updates on measures to combat terrorism financing and the proliferation of weapons of mass destruction.

“Through this practical guide, regulated entities will raise their awareness in situations where there may be potential financing for the proliferation of weapons of mass destruction,” CySEC said.