The Cyprus Securities and Exchange Commission (CySEC) on Thursday released a practical guide on maintaining effective and efficient sanctions screening systems.

The guide incorporates the latest findings from CySEC’s assessment of the effectiveness and efficiency of sanctions screening systems used by regulated entities.

The thematic inspections, conducted between April and November 2024, covered all categories of regulated entities, including Cyprus Investment Firms, Administrative Service Providers (ASPs), Funds and Fund Managers, and Crypto Asset Service Providers (CASPs).

CySEC’s inspections centred on legal requirements derived from the provisions of United Nations Security Council Resolutions or Decisions (UN Sanctions) and the European Union Council’s Decisions and Regulations (EU Restrictive Measures).

The inspections specifically examined screening practices for the UN and EU Sanctions Lists to identify designated persons, as well as additional screening measures concerning US and UK sanctions lists.

While the inspections identified several best practices, CySEC emphasised that the overall effectiveness and efficiency of the sanctions screening systems require improvement.

The purpose of publishing the guidelines, the commission explained, is to share the outcomes and feedback from these thematic inspections, clarify CySEC’s expectations regarding screening practices, and provide guidance on best practices for testing, tuning, and optimising screening systems to ensure compliance.

“All regulated entities are obliged to have adequate internal policies, procedures, and controls in place for implementing the provisions of sanctions and restrictive measures, including screening tools,” said CySEC chairman George Theocharides.