Cyprus launches sanctions implementation unit

The unit, known by its Greek acronym EMEK, is part of a broader reform effort that will include bringing Cyprus into line with including EU Directive 2024/1226 (the Directive) on the criminalisation of EU sanctions violations. In July 2025, the European Commission noted that 18 EU Member States had not properly transposed the Directive, which established common rules harmonising the definition of criminal offences and penalties for the violation of EU restrictive measures.

However, Cyprus has already played a significant part in sanctions against russia. It has frozen GBP1.5 billion in russian assets since the outbreak of war with Ukraine, according to the UK government, which has been helping to set up the new unit.

EMEK's creation, and the associated reform programme, is based on three laws enacted with effect as of 25 July 2025. The first authorises EMEK's foundation; the second criminalises the violation of EU restrictive measures as required by the Directive; and the third amends the law protecting persons who report violations of EU and national law. These laws consolidate previously fragmented licensing and enforcement mechanisms and strengthen both administrative and criminal tools available to authorities.

When EMEK becomes fully operational by the end of 2025, it will have broad powers to coordinate sanctions enforcement across public bodies and to provide direction to the private sector. It will be authorised to investigate suspected violations of national, EU and UN sanctions and impose administrative fines of up to EUR100,000, plus EUR100 per day for ongoing non-compliance. It will have powers to review applications and issue sanctions-related licences and exemptions, as well as to issue binding directives, circulars and guidance. It will also collect information from formal information requests, reporting channels and national beneficial ownership registers. It will exchange the information with local and foreign authorities.

Its enforcement efforts will be closely co-ordinated across local regulatory and law enforcement authorities and will work closely with international partners including the UK and the US.

New standalone reporting obligations will be introduced applying to all natural and legal persons independently of any existing reporting obligations to other authorities under anti-money laundering legislation. Individuals and entities must report to the authority within two weeks if they become aware of funds within EU territory that are owned by, under the possession of or controlled by sanctioned persons that should have been frozen or that were used within the two weeks preceding the person being designated.

Designated persons themselves must declare to the unit all funds and assets that they own, hold or control within Cyprus, within six weeks of being listed on EU sanctions. EMEK may also directly issue formal requests for information to any person it considers to hold relevant data, although information covered by legal privilege is exempt from these obligations.

Cyprus is also setting up a dedicated legal framework for the imposition of national sanctions such as asset freezes, travel bans and controls on movement of goods. Moreover, its transposition of the Directive brings a significant escalation of penalties for non-compliance, as intentional violations of EU sanctions may now attract fines of up to 5 per cent of total global turnover or up to EU40 million.

Further guidance is expected in the coming months, including through secondary legislation and procedural clarifications.

Source: STEP