Cyprus introduces criminal liability for sanctions evasion and creates a new supervisory agency

The Parliament of the Republic of Cyprus approved the Criminalisation of Violation of Restrictive Measures Law of 2025, which establishes criminal liability for circumventing international sanctions, including those imposed against Russia. At the same time, the National Sanctions Implementation Unit (NSIU, in Greek EMEK) was created to monitor compliance with these measures and coordinate investigations.

The law is aimed at fulfilling the requirements of EU Directive 2024/1226 and provides for penalties for both individuals and companies registered in Cyprus. It applies to violations committed both on the island and abroad if Cypriot citizens or entities are involved. The law also covers ships and aircraft under the Cypriot flag.

Criminally punishable actions include: providing financial resources to sanctioned persons or organizations; failing to block assets; assisting in the transit or transfer of property to sanctioned persons; and creating schemes to conceal the actual owners of frozen assets.

Serious penalties are provided for violations — fines up to €100,000 and imprisonment of up to five years. In severe cases, fines can reach up to 5% of the company’s annual global turnover or up to €40 million.

The establishment of NSIU/EMEK within the Ministry of Finance of Cyprus is part of a broad reform aimed at increasing transparency in the financial sector. The new agency will have the authority to conduct inspections, issue licenses, and monitor compliance with sanctions regimes. Full operations of the NSIU are expected by the end of 2025.

The tougher legislation is a response to criticism following the Cyprus Confidential investigation, which identified Cyprus as a key platform for Russian businessmen to evade sanctions. The authorities aim to demonstrate that they are ready to comply with EU standards and international obligations in combating financial crime.

Experts note that the new measures will help clean up Cyprus’s financial system but will also increase the administrative burden on companies, especially in the banking and maritime sectors.