The Central Securities Depository, as referred to Euroclear, announces that Euroclear are committed to ensuring compliance with all relevant regulatory and legal obligations, including those related to Sanctions (as defined in the Terms and Conditions governing use of Euroclear). In its turn participants are expected to take adequate measures to ensure compliance with Sanctions.
To ensure compliance with Article 5b, 5e and 5f of EU Council Regulation 833/2014 (as amended) and article 1u, 1x and 1y of EU Council Regulation 765/2006 (as amended), participants, non Russian citizens, must review their holdings (up to the beneficial owner), segregate the securities and, when required, the cash belonging to the citizens and entities of the Russian Federation and the Republic of Belarus in dedicated Euroclear Bank accounts following the guidance issued by our Competent Authority. The restrictions are applicable to:
∙ any Russian national or natural person residing in the Russian Federation or any legal person, entity or body established in the Russian Federation unless such nationals are also a national of a Member State or a natural person having a temporary or permanent residence permit in a Member State, in a country member of the European Economic Area or in Switzerland;
∙ any Belarusian national or natural person residing in the Republic of Belarus or any legal person, entity or body established in the Republic of Belarus unless such nationals are also a national of a Member State or a natural person having a temporary or permanent residence permit in a Member State or having a temporary or permanent residence permit in a country member of the European Economic Area or in Switzerland
The restrictions under Article 5b of EU Council Regulation 833/2014 (as amended) also apply in case of a legal person, entity or body established outside the European Union and whose proprietary rights are directly or indirectly owned for more than 50% by Russian nationals or natural persons residing in the Russian Federation.
The restrictions in Article 5e of EU Council Regulation 833/2014 (as amended) and article 1x of EU Council Regulation 765/2006 (as amended) also apply to securities (including investment funds and other shares in collective investment schemes) issued prior to 12 April 2022 if after that date new securities have resulted from a corporate action or if the amount or number of securities in circulation has increased as a result of new subscriptions, taps or rights issues or a corporate action.
In this respect, Euroclear participants must:
∙ disclose their positions for the citizens of the Russian Federation and/or the Republic of Belarus and segregate these securities and, when required, the cash on dedicated accounts. The participants may either opt for a dedicated segregated account or a dedicated omnibus account. The participants are requested to open a separate account for the citizens of the Russian Federation and the Republic of Belarus;
∙ inform Account or Relationship Manager of the accounts that they have opened to segregate the assets belonging to the citizens of the Russian Federation and/or the Republic of Belarus.
Accounts opened for the citizens of the Russian Federation and the Republic of Belarus will be subject to an attestation process for settlement activity.
In accordance with section 3.1.1 of the Operating Procedures of the Euroclear System, Euroclear may suspend and/or block instructions if they require manual investigation as part of compliance policy (including for, but not limited to, the purposes of compliance with Sanctions and/or anti-money laundering rules).
Euroclear will not be liable for any damage or loss resulting from such investigation and/or delay in processing of instruction due to such investigation. If Euroclear obtain sufficient comfort that instructions fall within the permitted activities, then such instructions would be allowed to continue their processing cycle. If it is not the case, then instructions will be rejected.
In addition to the actions and measures Euroclear have taken, participant (and any other underlying entity) must also ensure a sufficient level of due diligence and compliance with the Sanctions, as they should be respected in every step throughout the custody chain.