The Cyprus Bar Association (CBA) and the Cyprus Ministry of Finance (MoF) have issued announcements relating to the new prohibition on the provision of certain trust services under the fifth package of EU sanctions against Russia.

Announcement by the CBA

On 12 April 2022, CBA issued an announcement making certain clarifications on the fifth package of sanctions of the European Commission against Russia, specifically addressing the recent prohibition introduced under new Article 5m of Regulation (EU) 833/2014 which prohibits the provision of certain trust services (CBAArticle 5m Guidance). The CBA’s announcement clarified that:

• The term ‘similar legal arrangements’ does not extend to companies
• The prohibition refers both to the establishment of new trusts and the provision of trustee services and related services in existing trusts, which trigger the application of the prohibition
• In the Greek text of the measures, the term "Trustee" is used for the English term Trustor (Settlor) – the CBA Article 5m Guidance indicates that the correct term is Trustor/Settlor and urges members to refer to the English version of the measures in this respect until the Greek version of the text is corrected

Announcement by the MoF

On 12 April 2022, the MoF issued an announcement making certain clarifications on the fifth package of sanctions of the European Commission against Russia, specifically addressing the recent prohibition introduced under new Article 5m of Regulation (EU) 833/2014 which prohibits the provision of certain trust services (MoFArticle 5m Guidance). The MoF’s announcement clarified that:

• The term ‘similar legal arrangements’ does not extend to companies
• The prohibition in Article 5m is equivalent to the prohibitions set out in Article 5b of Regulation 833 in respect of deposits
• The prohibition refers to:
• The registration, provision of registered office, business or administrative address, as well as management services to new trusts or new similar legal arrangements, which trigger the application of Article 5m
• The provision of services of trustee, nominee shareholder, director, secretary or similar position for a new trust or new similar legal arrangement, which trigger the application of Article 5m

Please note Harneys’ observation on the above view: this view should be treated with caution and professional advice should be obtained before relying on it.

The CBA Article 5m guidance can be found in Greek here.

The MoF Article 5m Guidance can be found here.

Our blog post outlining the new Article 5m prohibition on the provision of certain trust services can be found here.

You can find our table outlining all measures introduced in connection with the situation in Ukraine, including all measures issued under the fifth wave of measures, here.