Cyprus Parliament to Vote on Sanctions Enforcement Bills Amid Revisions and Stakeholder Feedback

The House of Representatives is preparing for a pivotal plenary session on Thursday, during which members will vote on three significant legislative proposals, central among them the creation of a national sanctions implementation unit. These bills, having undergone multiple revisions following consultations and parliamentary deliberations, are poised to transform the country’s approach to sanctions enforcement and legal compliance with European Union and United Nations obligations.

At the heart of this legislative effort is the proposed establishment of the sanctions implementation unit, to be housed within the Finance Ministry. This unit is defined as the competent authority for the enforcement of restrictive measures imposed by the European Union, the United Nations Security Council, and those adopted nationally by the Republic of Cyprus. It will also serve a vital coordination role, bringing together the various state bodies responsible for implementing and monitoring sanctions.

This new unit, if approved as part of the first bill, would derive its authority from European regulations such as Council Regulation (EU) No 269/2014—issued on March 17, 2014, and targeting actions threatening Ukraine’s territorial integrity—and Directive (EU) 2024/1226 from April 24, 2024, which updates criminal offence and penalty standards for sanctions breaches, replacing the earlier 2018 directive.

The second legislative proposal, titled "The Law on Criminalising Breaches of the EU’s Restrictive Measures of 2025", is designed to align Cyprus’s domestic legislation with this latest EU directive. The law explicitly defines criminal offences associated with the circumvention of EU sanctions and stipulates corresponding penalties, effectively replacing the existing "Law on the Implementation of the Provisions of United Nations Security Council Resolutions or Decisions (Sanctions) and Decisions and Regulations" of the Council of the European Union.

The third legislative item, “The Law on Protecting Whistleblowers (Amendment) of 2025,” intends to update the existing protections for individuals reporting violations of national and EU sanctions. These amendments are specifically targeted at harmonising Cyprus’s framework with the April 2024 EU directive provisions concerning whistleblower protection in sanctions enforcement.

A representative from the Finance Ministry, speaking during the parliamentary committee discussions, provided a detailed explanation of the proposed sanctions unit’s role. According to this representative, the responsibilities include the application and supervision of restrictive measures set by the EU and the UN Security Council, particularly economic sanctions. Furthermore, the unit would coordinate state services and enforcement authorities within the Republic.

Among its core duties are the collection of information, cooperation and exchange of information with domestic and international authorities, receipt and submission of relevant reports, and the imposition of administrative fines in cases of failure to comply with information requests. The unit will also oversee the identification and monitoring of assets belonging to designated individuals or entities and will be responsible for issuing reports, circulars, guidelines, and clarifications necessary for implementing sanctions domestically.

The Finance Ministry official emphasized that existing supervisory authorities would retain their roles and powers under the new regime. “The bill provides for the retention of powers and responsibilities of supervisory authorities on sanctions matters over supervised entities,” they stated. It also outlines obligations for these entities, allows the imposition of administrative fines by supervisory bodies, and facilitates the flow of information between these authorities, the sanctions implementation unit, and other competent national bodies.

In practical terms, entities under supervision would be required to submit information about potential sanctions breaches to the unit. Supervisory authorities would also have the power to issue further instructions or regulations to clarify their expectations under the revised legal framework.

On the second bill, the Finance Ministry representative noted that the proposal criminalises not only the disposal of financial assets to sanctioned individuals but also the failure to freeze such assets. “Facilitating the entry of a designated person into the Republic is also criminalised,” they said. The bill further encompasses criminal penalties for engaging in commercial transactions, including the import, export, transfer, or movement of goods prohibited under EU restrictive measures, and the provision of financial services when such activity is barred by EU sanctions.

Additionally, the proposed legislation outlines cooperation procedures and mandates the reporting of asset freezes, thereby supporting investigation and prosecution efforts.

The third bill is aimed at enhancing protections for individuals who report sanctions violations. The Finance Ministry confirmed that it contains specific provisions aligned with EU law to safeguard whistleblowers involved in exposing breaches of restrictive measures.

Throughout the consultation process, multiple stakeholders voiced support for the general goals of the legislation. These included the Customs Department, Ministry of Foreign Affairs, Registrar of Companies and Intellectual Property, Cyprus Police, Deputy Ministry of Shipping, the Unit for Combating Money Laundering, the Central Bank of Cyprus, the Office of the Commissioner for Personal Data Protection, and the Cyprus Banking Association.

While these agencies and bodies expressed agreement with the bills' objectives, certain professional and business organisations conveyed more nuanced positions. The Cyprus Bar Association, Cyprus Chamber of Commerce and Industry (Keve), and the Cyprus Employers and Industrialists Federation (Oev) did not dispute the laws’ overarching aims but raised concerns about specific clauses. Each submitted written memoranda outlining their reservations and suggestions.

Keve, for instance, focused on the first bill and advocated for “the issuance of regulatory administrative acts of instructions and regulations of every supervisory and competent authority regarding compliance with existing statutory obligations to ensure their binding effect.” They also called for provisions enabling supervisory and competent authorities to impose administrative penalties for non-compliance and stressed that the sanctions unit should keep supervisory authorities informed about every licence or exemption decision it makes.

Keve also recommended ensuring the exchange of information between the sanctions unit and foreign counterparts, and they argued for supervisory authorities to participate in the advisory committee that supports the unit’s operations. The chamber further suggested that administrative fines be increased and made public in the interest of transparency.

Oev’s feedback centered on what it described as inconsistencies with the European acquis. It criticized the bills' exclusion of sectoral and thematic sanctions and flagged what it deemed ambiguous and overly complex procedures for granting licences or exemptions. Concerns were raised regarding both the scale and proportionality of administrative penalties and the mandate of bodies responsible for sanctions enforcement. Additionally, Oev raised data protection concerns, particularly in relation to information-sharing between obligated entities and the new unit.

The Cyprus Bar Association voiced its reservations mainly in terms of legal certainty and the inviolability of lawyer-client privilege, referencing case law from the European Court of Justice and the European Court of Human Rights.

Following these detailed interventions, the parliamentary committee urged the Finance Ministry to undertake further consultations with stakeholders and revise the texts as needed. In response, the Ministry submitted amended versions of the first and second bills, with final versions filed on June 12 and May 26, 2025, respectively.

During a session on June 16, 2025, the Ministry indicated the need for additional minor technical amendments to the first bill. A further revised version was then submitted on June 18, 2025. This latest draft included crucial changes, such as explicit protections for lawyer-client privilege and the inclusion of the sanctions implementation unit’s role in reviewing licence and exemption requests. Moreover, the updated draft obliges the unit to inform the Foreign Ministry of its decisions regarding sanctions-related authorisations for which it acts as the competent authority within the Republic.

As lawmakers prepare to cast their votes, these bills, now shaped by months of negotiation and refinement, represent a comprehensive and far-reaching attempt to bring Cyprus’s sanctions framework in line with international obligations and evolving EU standards.

By fLEXI tEAM