effective from 18 march 2026, the government of jersey introduced significant amendments to the sanctions and asset-freezing (jersey) law 2019. these changes aim to align jersey’s sanctions framework more closely with international standards, particularly those of the uk and to strengthen jersey’s commitment to combating financial crime and ensuring compliance with global sanctions regimes. key changes include: expanded prohibitions: restrictions on providing economic resources, funds, or financial services to designated persons now explicitly extend to entities owned or controlled by such persons. broader reporting obligations: relevant financial institutions (rfis) must report to the minister for external relations if they know or suspect someone is a designated person or involved in an offence under the law. this obligation applies regardless of whether the institution has a direct connection (e.g., account or dealings) with the individual. enhanced disclosure powers: the minister may disclose information obtained under the law to competent authorities outside the uk and eu or to other parties if deemed appropriate. clarifications on indirect availability: new provisions define "indirectly making resources available" to include entities controlled by designated persons. rfis and other stakeholders are advised to review their compliance processes and submit reports promptly if required. for further details read the government of jersey’s update here the sanctions and asset-freezing law (jersey) amendment regulations 2026 can be found here

on 27 february 2026, published in the official journal of the european union, regulatory technical standards (rts) introducing harmonised rules for liquidity management tools (lmts) applicable to alternative investment fund managers (aifms) and undertakings for collective investment in transferable securities (ucits) across the eu. these rts aim to enhance financial stability and bolster investor protection, particularly during periods of market stress. these standards provide detailed specifications for the characteristics of various lmts, ensuring their consistent application and operation. moreover, they establish a clear and predictable legal structure for managing fund liquidity, empowering managers with a robust toolkit to handle redemption pressures while safeguarding the interests of all fund investors. the core objective of rts on lmts governing aifms and ucits is to provide them with a standardised set of instruments to manage liquidity risk effectively, thereby protecting investors and containing potential spillover effects in the market. these rts will apply from 16 april 2026. alternative investment funds (aifs) constituted before this date are granted a transitional period until 16 april 2027 to comply. key features of these rts on lmts include: suspension of subscriptions, repurchases and redemptions: an aifm or ucits must suspend subscriptions, repurchases, and redemptions simultaneously and for the same duration. this measure is intended to be temporary and is applied only in exceptional circumstances where it is in the best interests of investors. redemption gates: aifms or ucits are permitted to activate redemption gates once a predetermined activation threshold is met. extension of notice periods: the rts allows aifms or ucits to extend the notice period required for redemptions. redemption fees: redemption fees must consider the estimated explicit transaction costs and where appropriate the implicit ones and any important market impact of asset sales. swing pricing: the rts provide that swing pricing could be applied in case of a difference between redemption and subscription orders or in a case where the difference would exceed a predefined activation threshold. dual pricing: provides calculation methods in cases where the aifm or ucits activates dual pricing. anti-dilution levies: must include estimated explicit transaction costs and where relevant the implicit transaction costs and any significant market impact of asset sales or purchases. redemption in kind: corresponds to the transfer of assets that the aif or ucits holds for the purpose of redeeming investors instead of cash. side pockets: these new rts provide the forms that side pockets can take, input with respect to their share class and the activation of a side pocket. the new rts on lmts governing aifms can be found here the new rts on lmts governing ucits can be found here

on 24 february 2026, the european securities and markets authority (esma) issued a statement reminding firms of their obligations under the national product intervention measures for contracts for differences (cfds). this follows an increase in the offering of derivatives, such as perpetual futures or contracts, which provide leveraged exposure to assets, including cryptocurrencies like bitcoin. key points include: scope of measures: derivatives meeting the definition of cfds are subject to product intervention measures, including: leverage limits mandatory risk warnings margin close-out and negative balance protection prohibition of monetary and non-monetary benefits product governance: firms must ensure a narrow target market for these complex products, avoiding mass marketing or campaigns targeting inexperienced investors. appropriateness assessment: for non-advised services, firms must assess whether these products are suitable for retail clients. conflict of interest: firms must identify and manage conflicts of interest, particularly when derivatives are issued or traded within the same group. legal analysis: firms must conduct a thorough legal review of products, regardless of their commercial name, to determine if they fall under the scope of these measures. priips regulation: firms distributing these derivatives to retail clients must prepare a key information document (kid) as required under the priips regulation. esma emphasises the importance of acting in the best interests of clients and adhering to investor protection requirements under mifid ii. firms should align their practices with these obligations to ensure compliance and safeguard retail investors. esma’s news release can be found here and the public statement here

on 19 february 2026, the bermuda monetary authority (bma) announced a new initiative aimed at reducing regulatory burdens while enhancing policyholder outcomes. this effort focusses on streamlining insurance supervision by eliminating unnecessary costs, duplication and inefficiencies in reporting and compliance processes while maintaining robust prudential standards, strong governance expectations and effective risk-based supervision. key measures include: streamlined reporting: consolidating duplicative filings, aligning definitions and adopting a "collect once, reuse many times" approach to improve data reliability and reduce reconciliation efforts. implementing pre-submission validation to reduce avoidable rework. enhanced digital processes: leveraging the secure electronic portal for submissions, tracking and communication to improve efficiency and transparency. proportional supervision: tailoring regulatory expectations to insurers' specific risk profiles, ensuring resources are focused on material risks. the initiative does not compromise prudential standards or supervisory effectiveness. the bma encourages insurers and stakeholders to actively engage, provide feedback and collaborate on simplifying processes while ensuring strong policyholder protections. for more information bma’s notice can be found here

the european union (eu) and the united kingdom (uk) proceeded with the announced reduction in the price cap for russian-origin crude oil to us$44.10 per barrel, effective 1 february 2026. this measure, part of ongoing sanctions under regulation (eu) 833/2014, aims to curtail russia's revenue streams while ensuring global energy market stability. key updates: revised price cap: the new cap of us$44.10 per barrel is in effect from 1 february 2026. contracts concluded before 31 january 2026, with russian oil offloaded at the port of destination by 16 april 2026, will remain subject to the previous cap of us$47.60 per barrel. uk general licence amendment: the uk’s general licence int/2024/4423849, known as the ‘oil price cap’ licence, has been updated to reflect the new cap. the office of financial sanctions implementation (ofsi) has amended faqs 154-161 and its industry guidance to align with these changes. compliance requirements: operators must ensure oil is purchased at or below the cap. mandatory attestations and itemised cost documentation for transactions involving russian oil will apply from february 2024. eu operators are required to retain records for five years to demonstrate compliance. scope of application: the cap applies to russian seaborne crude oil and petroleum products. exemptions exist for specific projects critical to energy security, such as the sakhalin-2 project, valid until 28 june 2026. enforcement: national authorities will oversee compliance and address violations. red flags for circumvention include refusal to provide cost details or falsified attestations. this coordinated effort by the eu and uk underscores their commitment to enforcing sanctions while mitigating disruptions to global energy markets. european union’s publications can be found here, here and here. ofsi's faqs can be accessed here. the updated oil price cap general licence is here and the ofsi’s full oil price cap guidance, click here.

on 3 march 2026, luxembourg adopted a new law amending the legislation of 17 december 2010 on collective investment undertakings and 12 july 2013 on alternative investment fund managers. this update transposes the eu directive 2024/927 (aifmd ii), modernising the regulatory framework for investment funds. the law harmonises loan origination rules for funds, imposing risk retention requirements, introducing diversification limits, and restricting certain originate-to-distribute models. it also harmonises and formalises the availability and governance of liquidity management tools (lmt), such as side pockets, in line with aifmd ii. these measures aim to enhance investor protection while reinforcing luxembourg's appeal as a leading centre for alternative asset and private debt management. the law will come into effect on 16 april 2026, with certain provisions postponed until 16 april 2027. for more information (only in french) here

the uk parliament has a vested interest in ensuring compliance of sanctions in the overseas territories (ots) since the uk is responsible, under the un framework, for the application of sanctions in all places that the uk claims sovereignty. added to that, the uk sanctions and money laundering act 2018 (samla) formalised the post-brexit settlement on sanctions implementation in the ots (with the crown dependencies being subject to other equivalent arrangements). parliament has, on an ongoing basis, issued its views on compliance with these requirements in briefing papers issued by the house of commons, the most recent dated 31 october 2025. this details the application of uk sanctions against russia within the uk's 14 overseas territories (ots). it also evaluates the progress toward implementing public registers of beneficial ownership, but that is for another blog. this review offers essential insights into the legal framework and practical challenges of enforcing international sanctions and promoting financial transparency across the ots. in this blog we focus on the ots which we advise on: anguilla, bermuda, the british virgin islands and the cayman islands. sanctions framework in the ots the paper confirms what every ot sanctions lawyer already knows, that the primary legal instrument governing uk sanctions is samla. that uk government policy mandates that any sanctions regime, including the russia (sanctions) (eu exit) regulations 2019, must be given effect in the ots – which is formally extended through orders in council, such as the russia (sanctions) (overseas territories) order 2020. consequently, ots are legally required to apply the same sanctions as the uk. key observations on sanctions and legislative developments the document highlights several key findings and legislative actions: the full extent of russian assets located within the ots remains largely unknown. however, significant actions have been taken. as of 2024, the uk and ot governments reported that a total of £7 billion in accounts and assets had been frozen since 2022. in february 2022, transparency international uk identified approximately £830 million worth of property in the ots and crown dependencies linked to individuals close to the russian president or those accused of corruption. a november 2024 analysis suggested significant exports from ots to russia, valued at us$134 million in that year. for more information, the house of commons research briefing can be accessed here

on 23 february 2026, esma clarified the application of mifid ii remuneration rules to tied agents under article 27 of regulation (eu) 2017/565. key points include: balance between fixed and variable remuneration: tied agents are classified as "relevant persons" under article 2(1) of delegated regulation 2017/565. consequently, firms must ensure a balance between fixed and variable remuneration. however, recital 41 allows flexibility, permitting a larger variable component for tied agents, provided it aligns with national laws and does not compromise client interests. national exemptions under article 3 of mifid ii: member states adopting the optional exemption under article 3 must impose analogous requirements, including remuneration rules, to ensure compliance with article 27 of regulation (eu) 2017/565. this guidance emphasises the need for firms to consider tied agents' unique status and national specificities while maintaining policies that prioritize client interests. esma’s response can be found here

on 22 december 2025, the european banking authority (eba) issued updated guidelines amending the existing framework (eba/gl/2022/04) on the equivalence of confidentiality regimes. these amendments aim to ensure that third-country confidentiality and professional secrecy frameworks align with eu standards, which is a prerequisite for sharing confidential information with third-country authorities. key highlights: scope expansion: the eba has expanded the scope of its equivalence guidelines to create a more consistent framework for how eu national regulators cooperate with supervisory authorities in non-eu countries, the guidelines now incorporate confidentiality and professional secrecy provisions under regulation (eu) 2023/1114 (micar), which governs markets in crypto-assets. this includes updated definitions and scope for competent authorities engaging with third-country authorities. equivalence assessments: the eba has evaluated and confirmed the equivalence of confidentiality regimes for several third-country authorities, including: australia: australian transaction reports and analysis centre (austrac) china: national financial regulatory administration (nfra) montenegro: central bank of montenegro peru: superintendency of bank, insurance, and pension fund administrators (sbs) serbia: national bank of serbia united kingdom: financial conduct authority (fca) and prudential regulation authority (pra) legal framework updates: the guidelines reflect changes in third-country legal frameworks and align with micar requirements. they also clarify that these assessments do not address the need for cooperation arrangements or participation in supervisory colleges. the guidelines will be translated into all official eu languages and published on the eba website. competent authorities must report compliance within two months of publication, with the guidelines becoming effective shortly thereafter. the press release can be found here and the final report here

on 21 january 2026, the cyprus securities and exchange commission (cysec) issued a press release highlighting its strengthened financial market oversight in 2025 and its strategic priorities for 2026, focussing on investor protection, transparency, and financial sector resilience, as cyprus assumes the eu presidency. key achievements include: eu presidency role: active participation in european legislative initiatives, including the market infrastructure package and sustainable finance disclosure regulation (sfdr), ahead of cyprus’ eu presidency in 2026. cysec will also host the esma management board and board of supervisors meetings in april 2026. supervisory actions: conducted 600 inspections, imposed eur 2.3 million in fines, and addressed compliance issues in over 170 cases. efforts targeted professional conduct, sustainability risks, and anti-money laundering (aml) measures. even more, cysec actively participates in the preparation of the new european aml authority (amla) and in implementing the new national sanctions framework through the national sanctions implementation unit (nsiu). development and digital transformation:47 new licenses were granted in 2025. assets under management in collective investment schemes rose to eur 11.4 billion, with a substantial share directed to the cypriot economy. investments in it systems, ai, and cybersecurity, alongside plans to enhance human resources are being prepared in 2026. investor protection: issued warnings against unauthorised entities and promoted financial literacy through educational campaigns to encourage safe participation in the digital financial landscape. the press release can be found here

on 9 february 2026, the cayman islands government published three legislative instruments: the mutual funds (amendment) bill, private funds (amendment) bill, and virtual asset (service providers) (amendment) bill. these were created to answer a number of pressing questions arising from tokenised investment funds and to establish a clear and reliable regulatory framework for tokenised investment funds. ‘tokenisation’ means using blockchain or similar technology to digitally represent an investor's equity or interest in a fund, usually while maintaining a traditional position with respect to legal ownership and rights. the new framework created by the three proposed instruments aims to provide clear and unambiguous guidance and address previous uncertainties as to whether funds that are tokenised are still regulated under existing fund laws, such as the mutual funds act and private funds act, or whether they should be treated as regulated under the virtual asset (service providers) (vasp) act due to the tokenisation of interests in the funds. key updates include: definitions for digital equity and investment tokens. enhanced recordkeeping and transferability provisions. disclosure of technology-specific risks. expanded supervisory powers for the cayman islands monetary authority (cima). the virtual asset (service providers) (vasp) act has also been clarified to exclude regulated tokenised funds from being classified as virtual asset issuers, unless they provide virtual asset services like exchange or custody. these amendments reinforce the cayman islands' position as a leader in financial services innovation, ensuring technological advancements occur within a transparent and internationally credible regulatory environment. the official press release can be found here mutual funds (amendment) bill, 2026 can be accessed here the private funds (amendment) bill, 2026 can be accessed here the virtual asset (service providers) (amendment) bill, 2026 can be accessed here

on 15 december 2025, cyprus and vietnam signed a double tax treaty aimed at avoiding double taxation and preventing fiscal evasion concerning taxes on income (cyprus-vietnam dtt). the cyprus-vietnam dtt, aligns with international tax standards, including the organisation for economic co-operation and development (oecd) and united nations model conventions (un model). we provide below key articles included in the cyprus-vietnam dtt: key provisions permanent establishment (pe) key provisions on pe include: construction projects lasting at least 6 months. furnishing of services for at least 6 months within a 12-month period. exploration/exploitation of natural resources (no time threshold). dividends, interest, royalties key provisions on dividends, interest and royalties include: dividends - maximum 5 per cent tax if the beneficial owner (bo) is a company holding at least 70 per cent of the paying company’s capital or has invested at least usd 10 million. otherwise, capped at 10 per cent tax. interest - maximum 10 per cent tax on the gross amount of interest. royalties - maximum 10 per cent tax on gross amount of royalties. capital gains tax (cgt) key provisions on cgt include: the country of origin retains the right to tax gains from shares in property-rich companies. gains from shares representing over 15 per cent of a company’s capital may also be taxed by the country of origin. methods of eliminating double taxation the cyprus-vietnam dtt sets out specific provisions regarding the methods applied by each contracting state to eliminate double taxation. benefits for businesses and investors the cyprus-vietnam dtt provides clarity and stability in the tax treatment of transactions between the two countries, ensuring fair treatment while preventing tax evasion and double taxation. by safeguarding transparent tax practices, the cyprus-vietnam dtt enhances investor confidence and supports the development of stronger trade and economic ties between cyprus and vietnam. the official press release regarding the cyprus – vietnam dtt can be found here the cyprus-vietnam dtt (available in greek, vietnamese and english) can be found here

effective date: 1 january 2026 this guide outlines the critical amendments to the cayman islands’ common reporting standard (crs) regulations, introduced by the tax information authority (international tax compliance) (common reporting standard) (amendment) regulations, 2025, here. these changes represent a significant shift in the compliance landscape, aligning the jurisdiction with global oecd standards and the new crypto-asset reporting framework (carf). as these amendments are directly relevant to our practice, it is essential that we understand the new timelines, expanded scope, and procedural requirements to advise our clients effectively. new deadlines for registration and reporting one of the most immediate impacts for our clients is the consolidation and advancement of compliance deadlines. the previous split deadlines for returns and compliance forms have been harmonised to streamline the process. registration for new fis new deadline: entities that become financial institutions (fis) on or after 1 january 2026 must register on the ditc portal by 31 january of the following year (i.e. 31 january 2027 onwards). annual reporting deadlines consolidated date: from the 2026 reporting year onwards, both the crs return and the crs compliance form are due by 30 june annually. impact: this replaces the previous separate deadlines (31 july for returns and 15 september for compliance forms). first filing: for the 2026 reporting period, both documents must be submitted by 30 june 2027. principal point of contact (ppoc) requirements a major procedural change is the stricter requirement regarding the ppoc. the ditc now mandates that the ppoc must have a physical presence within the jurisdiction. requirement: every cayman fi must appoint a ppoc person (natural or legal) located in the cayman islands. address: the ppoc must have a physical address in the cayman islands; a mailing address alone is insufficient. deadlines for compliance: new fis (from 1 jan 2026): must appoint a cayman-based ppoc immediately upon registration. existing fis (registered before 31 december 2025): have a transitional period until 31 january 2027 to appoint a local ppoc and update their details on the ditc portal. note: this deadline was extended from the original 1 january 2027 date. notification: any changes to the ppoc must be notified to the ditc within 30 days. expanded scope: crypto-assets and digital money to modernise the framework, the definition of "financial assets" has been significantly broadened. this change ensures that the cayman islands' regime captures digital assets, mirroring the oecd’s crypto-asset reporting framework (carf). new inclusions the regulations now formally include: crypto-assets: this covers payment tokens (e.g., bitcoin, stablecoins), utility tokens, certain nfts, and security tokens. specified electronic money products. central bank digital currencies. client impact entities dealing in these assets must re-evaluate their classification to consider whether they now fall under the definition of an fi or have new reporting obligations regarding account holders holding these assets. due diligence procedures for both new and existing fis must be updated to capture and report on these asset types effectively. enhanced data collection and enforcement the amendments introduce more granular data requirements and a stricter penalty regime. data requirements controlling persons: fis must collect and report additional information regarding controlling persons, i.e. any natural person who exercises control over an entity. account classifications: there is a requirement for more detailed account classification data. self-certifications: valid self-certifications are critical. they must be collected from users to determine tax residency by 1 january 2027 for pre-existing accounts, and prior to (or upon) establishing a relationship for new accounts. enforcement and penalties immediate penalties: the ditc has the authority to impose administrative penalties immediately for non-compliance, removing the previous "breach notice" buffer. penalty amounts: failure to file returns or update ppoc details can result in penalties of up to us$12,200 (ci$10,000) per breach. scope: penalties apply to missed filing deadlines, failure to maintain current registration details, and failure to establish valid self-certifications. transitional provisions summary to assist in managing client expectations, here is the timeline for the transition: milestone date effective date 1 january 2026 first consolidated filing (2026 data) 30 june 2027 ppoc appointment (existing fis) deadline extended to 31 january 2027 ppoc appointment (new fis) from date of registration (starting 1 jan 2026) new fi registration deadline 31 january of the following year (e.g., 31 jan 2027 for 2026 fis) cima prudential information survey for registered persons in addition to the crs amendments, registered persons should be aware of new regulatory obligations introduced by the cayman islands monetary authority (cima). the prudential information survey (adr-046-75-02) is now required for entities registered as registered persons and is a critical part of cima’s ongoing supervisory and risk assessment objectives. purpose and scope the survey aims to enhance cima’s oversight of the securities investment business sector, focussing on activities, exposures, and risk profiles across registered persons. it is separate from, and in addition to, existing requirements such as the annual declaration. key deadlines the first prudential information survey covers the reporting period from 1 january 2025 to 31 december 2025. submission is required via the reefs portal between 1 january 2026 and 31 march 2026. submission requirements registered persons must accurately complete and submit the survey within the specified window. the guidance for registered person prudential information survey is available and should be consulted for technical and procedural details. timely submission is mandatory. this obligation is in addition to the annual declaration (adr-046-75), which remains due from 1 january 2026 to 15 january 2026. failure to meet either obligation may result in regulatory follow-up and penalties. any queries are to be directed to the securities supervision division at cima. action points for the team review client portfolios: identify clients dealing in digital assets who may now fall under the expanded scope. audit ppoc appointments: ensure all existing fi clients have a plan to appoint a cayman-based ppoc before the january 2027 deadline. update compliance calendars: adjust internal tracking systems to reflect the new 30 june consolidated deadline for 2027.

on 24 february 2026, the united kingdom government announced its most extensive package of sanctions against the russian federation since 2022. published by the foreign, commonwealth & development office, this package comprises nearly 300 new designations targeting critical russian revenue streams, energy infrastructure and military supply chains. energy sector targets and key measures the centrepiece of these new measures is the designation of pjsc transneft, one of the world's largest oil pipeline companies, reportedly responsible for transporting over 80 per cent of russian oil exports. the uk has also sanctioned: the '2rivers' oil network: 175 companies within this network have been designated. it is described as one of the largest shadow fleet operators globally and a major trader of russian crude oil. shadow fleet vessels: a further 48 oil tankers alleged to be involved in the illicit transportation of russian oil have been designated. broadening the scope: additional designations beyond the energy sector, the measures extend to several other critical areas to disrupt russia's war capability: military supply chains: 49 entities and individuals designated for sustaining russia's war machine, including international suppliers of goods and technology for drones. civil nuclear energy: 3 companies and 2 individuals sanctioned for attempts to secure contracts for new russian nuclear installations overseas. liquified natural gas (lng): 6 targets in the lng industry, including ships and key export terminals responsible for exporting russian lng. financial sector: 9 russian banks sanctioned for processing cross-border payments. in parallel, the uk foreign secretary, during a visit to ukraine, announced a £30 million support package for ukraine. this funding is allocated to repair energy infrastructure and to support justice and accountability initiatives. this latest package brings the total number of individuals, businesses and ships sanctioned under the uk's russia regime to over 3,000, while total uk support to ukraine since the start of the conflict now stands at £21.8 billion. the press release can be found here

on 18 february 2026, the luxembourg registration duty, estate and vat authority (aed) issued an important reminder for all reserved alternative investment funds (raifs). in its capacity, as the supervisory authority for aml/cft matters, the aed requires the timely submission of the annual rc (responsable du contrôle) report for the year 2025. the deadline for filing this mandatory report is 31 may 2026. this synthesis report details the raif's aml/cft activities and operations as of 31 december 2025. it must provide a comprehensive overview, including: risk assessments for aml/ft, mitigation measures and risk tolerance levels. results of due diligence on clients, initiators, portfolio managers and other key parties. statistics on suspicious transaction reports filed with the crf. details on the monitoring of financial sanctions and blocked positions. for more information, including detailed submission instructions, please find the press release here. ensure your organisation is prepared to meet this regulatory deadline. contact our expert legal team for guidance on navigating your aml/cft compliance obligations.

the offshore regulatory landscape continues to evolve at a rapid pace, with regulatory bodies in the cayman islands and british virgin islands introducing updates that reflect the growing global demand for transparency and compliance. as we move into 2026, several critical considerations have emerged for offshore entities, particularly those with ties to the middle east. this article outlines five key areas that demand attention and offers practical insights for businesses seeking to stay ahead of the curve. 1. regulatory inspections – increased depth and frequency both the cayman islands monetary authority (cima) and the bvi financial services commission (fsc) have significantly ramped up their inspection programmes for regulated financial institutions. the number of on-site visits has more than doubled year-on-year, with a strong emphasis on anti-money laundering (aml) compliance, corporate governance, and timely regulatory filings. inspections are increasingly drilling into operational substance: is the board meeting regularly? are minutes properly documented? is the aml officer empowered and independent? for middle east-based businesses operating offshore structures, this means preparing for regulatory scrutiny at a granular level. entities that conduct internal mock audits, maintain updated aml manuals, and rigorously document decision-making processes are best positioned to navigate these inspections with confidence. the message from regulators is clear: substance matters, and procedural compliance alone is no longer sufficient. for more on cima inspections, see here. for more on bvi and cayman inspections more generally, please see here. 2. anti-money laundering – heightened scrutiny across jurisdictions aml compliance has moved firmly to the top of the regulatory agenda in both the cayman islands and the bvi. regulators are no longer satisfied with policies that exist only on paper; they expect to see evidence of active implementation, regular review, and genuine risk-based decision-making. key areas of focus include: customer due diligence (cdd) and enhanced due diligence (edd): regulators are examining whether entities are applying appropriate levels of scrutiny to high-risk customers, including politically exposed persons (peps) and clients from higher-risk jurisdictions. for middle east-connected structures, this often means demonstrating robust source of funds and source of wealth verification. ongoing monitoring: static onboarding checks are insufficient. both cima and the fsc expect continuous transaction monitoring and periodic customer reviews, particularly for long-standing relationships where risk profiles may have evolved. suspicious activity reporting: entities must demonstrate that staff are trained to identify red flags and that there are clear internal escalation procedures. failure to file suspicious activity reports (sars) when warranted, or filing them late, is a common inspection finding. aml officer independence and empowerment: inspectors frequently probe whether the designated aml compliance officer and money laundering reporting officer have genuine authority, sufficient resources, and direct access to the board. nominal appointments without operational backing are increasingly being called out. third-party reliance and group-wide policies: where entities rely on introducers or group aml frameworks, regulators expect clear contractual arrangements, documented due diligence on the third party, and evidence that reliance is appropriate given the risk profile. for middle east businesses, the interconnected nature of regional financial networks and the prevalence of complex ownership structures-means aml compliance requires particular attention. entities should conduct independent aml audits, refresh policies to reflect current regulatory expectations, and ensure staff training is up to date and properly documented. 3. aeoi enforcement – the compliance net tightens automatic exchange of information (aeoi), including fatca and crs, has moved from framework-building into strict enforcement. in 2024, the oecd flagged over 30 per cent of participating jurisdictions for data quality issues. the cayman islands and bvi authorities are under pressure to demonstrate real oversight. middle east clients face mounting risks from inaccurate or incomplete aeoi reporting. common failures include: misclassification of financial institutions late or missed reporting deadlines lack of valid tins or self-certifications lack of adequate training of staff tax authorities in both jurisdictions are now ramping up inspections on crs compliance measures a development that financial institutions must adequately provision for. we recommend clients invest in their compliance systems and conduct periodic aeoi reviews, especially where underlying accounts are booked with regional banks or administered through complex holding structures. 4. economic substance – a timely reminder while economic substance laws in the cayman islands and bvi have been in force for several years, enforcement has matured significantly. both jurisdictions are now actively enforcing economic substance rules, with fines potentially exceeding us$100,000. beyond monetary penalties, failure to meet economic substance requirements could result in the loss of good standing, reputational damage, and even the strike-off of entities. common pain points include: passive holding companies with minimal board activity outsourced directorships with no regional oversight failure to evidence “directed and managed” test middle east businesses should treat economic substance as more than a checkbox — it’s now a live issue which should be monitored. 5. beneficial ownership – from shadow to spotlight transparency around beneficial ownership has become a cornerstone of global regulatory reform, and both the cayman islands and the bvi have established robust regimes. cayman islands: the jurisdiction introduced a beneficial ownership regime on 1 july 2017, requiring all in-scope entities to maintain a confidential register. the beneficial ownership transparency act, 2023, which became effective on 31 july 2024, expanded the scope and tightened disclosure rules, with formal enforcement commencing in january 2025. access remains limited to designated authorities, including the financial reporting authority, the tax information authority, and law enforcement. while the jurisdiction has expressed support for a legitimate interest access model, no plans for a public register have been confirmed. british virgin islands: the beneficial ownership secure search system (boss), launched in mid-2017, has now been operational for nearly nine years as a confidential national register. access is currently restricted to designated authorities under strict legal frameworks. while there is no current plan for a fully public register, the bvi is moving toward a 'legitimate interest' access regime in line with evolving global standards, expected to become fully operational by april 2026. for gulf-based businesses, this shift means confidentiality can no longer equate to opacity. entities must ensure filings are timely and accurate, understand who qualifies as a "beneficial owner," and avoid nominee arrangements that obscure true control. handled well, ownership transparency builds credibility and pre-empts reputational risk. final thoughts – strategy beats reaction the regulatory temperature is rising, and middle eastern businesses using offshore structures must shift from reactive compliance to proactive governance. those who invest now in legal clarity, operational readiness, and advisory support will not just survive the current environment; they will lead. at harneys, we work with clients across the globe to future-proof their structures in an increasingly interconnected regulatory world. if any of these topics resonate with your business, we would be delighted to discuss how we can assist.

cyprus is taking decisive steps to reshape its employment landscape. the government is currently advancing a draft bill to transpose directive (eu) 2022/2041 on adequate minimum wages into national law. as one of the few member states yet to fully adopt the directive, the push to pass the "adequate minimum wages law of 2025" brings significant changes for businesses and workers alike. we outline the critical provisions of this draft bill, how it aligns with european standards, and what it means for your operations. key provisions of the draft bill the new legislative framework introduces several mechanisms designed to ensure a decent standard of living, reduce in-work poverty, promote social cohesion and social convergence upwards and to reduce the gender pay gap. if you operate a business in cyprus, you need to prepare for the following core changes: the minimum wage adjustment committee: the government will appoint a dedicated committee comprising worker representatives, employer representatives, and independent academic experts. this body will assess and recommend minimum wage adjustments based on the cost of living, productivity, and economic growth. clear assessment benchmarks: to guide these adjustments, the bill references internationally recognised indicators. these include setting the minimum wage at 60 per cent of the gross median wage and 50 per cent of the gross average wage. strict public procurement rules: the law ties public contracts to wage compliance. companies bidding for public sector projects must ensure that they, and their subcontractors, comply with applicable collective agreements. a previous conviction for wage violations will bar a company from submitting public bids for three years. enhanced data collection: employers will face new reporting obligations. you will need to register specific wage and employment data into a designated digital system to help the government monitor compliance and report back to the european commission. promoting collective bargaining: if collective bargaining coverage falls below 80 per cent of the workforce, the state must establish a clear action plan to promote and expand it, protecting trade union members from discrimination. changes to the existing minimum wage regime until now, the determination of the minimum salary in cyprus has followed the provisions of the minimum wage law, cap. 183, as amended. under this regime, the minister of labour issued a decree pursuant to which the national minimum salary was set and periodically reviewed, with the current minimum monthly wage standing at eur 979 (eur 1,088 following completion of 6 months of continuous employment). this framework is now set for fundamental change: the new bill provides that the minimum statutory wage will instead be determined by a decree of the council of ministers, with a mandatory readjustment mechanism taking effect at two-year intervals. this marks a shift from ministerial discretion to a more institutionalised and predictable adjustment process. scope of application the bill provides for comprehensive employee coverage. it applies to all individuals working in the republic of cyprus under a contract of employment or any employment relationship, regardless of sector, unless they fall within a category of employers or economic activity that is expressly exempted by decree. this approach not only ensures broad protection for employees/workers but also sets a clear legal baseline for employers. offences and related penalties: clauses 21, 22, and 24 compliance is underscored by a series of offences and penalties under the bill: clause 21: offenses and penaltiesthis clause outlines offenses related to obstructing labour inspectors, providing false information, or failing to present required documents. penalties include imprisonment of up to three (3) months, a fine of up to €3,000, or both. however, there is a discrepancy in the monetary fine mentioned in the clause text, which states "€3,000" in one part and "€5,000" in another. clause 22: employer liabilityemployers are held accountable for offenses committed by their representatives or other persons acting on their behalf. if an employer demonstrates due diligence and proves the offence occurred without their knowledge or consent, they may avoid penalties, provided the representative or other person is convicted. in cases where an employee is indirectly employed (e.g., through a subcontractor), the primary employer may also be held jointly liable for ensuring compliance with minimum wage requirements. clause 24: sanctionsemployers violating the provisions of the law face imprisonment of up to two years, a fine of up to €10,000, or both. additional fines of €50 per day may apply for continued violations after conviction. courts may also order employers to pay outstanding wages owed to employees, calculated based on the statutory minimum wage. repeal of previous legislation it is important to note that upon the enactment of the new law, cap. 183 and all ministerial decrees issued under it will be expressly repealed. this consolidates the statutory framework into a single, modern instrument and eliminates potential conflicts or overlaps with previous regimes. alignment with the directive and notable variations the draft bill strongly aligns with the core objective of directive (eu) 2022/2041: promoting collective bargaining and ensuring statutory minimum wages are adequate. recent european court of justice case law, such as case c-19/23, highlights the european union's strict approach to worker protection and the necessity of transparent, predictable employment conditions. the cyprus bill reflects this rigorous standard. however, variations between the eu directive and the local draft bill have surfaced, sparking debate. the most notable point of friction involves the indicative reference values. while the eu directive presents the 60 per cent median and 50 per cent average wage figures as non-binding recommendations, local employer groups argue the draft bill embeds them too rigidly. furthermore, the mandatory data collection requirements go beyond the direct scope of the directive, introducing local administrative layers that duplicate existing digital reporting systems. reactions from employers and unions are these changes a necessary step for social convergence, or do they represent burdensome overregulation? the social partners in cyprus hold distinctly different views. employers and business chambers warn against the unilateral expansion of obligations. they argue that the data collection mandates will create severe administrative burdens without directly serving the directive's goals. furthermore, employers advocate for maintaining the flexibility of the existing national minimum wage law, which they believe allows for smoother adaptation to the specific economic realities of cyprus through structured social dialogue. conversely, trade unions broadly welcome the reform. they view the bill as a vital tool to enforce decent working conditions and close the gender pay gap. their primary request is for further clarification to ensure that statutory minimum wages encompass the minimum entry pay rates already agreed upon in sectoral collective agreements. implications for your business the transposition of directive (eu) 2022/2041 signals a shift towards stricter labour market regulation and enhanced worker protections in cyprus. for businesses, this means wage-setting will become a more structured, data-driven process overseen by a tripartite committee. you must prepare for increased administrative responsibilities regarding data reporting. additionally, if your business relies on public sector contracts, strict adherence to collective agreements and wage laws is no longer just good practice, it is a mandatory condition for participation. understanding these regulatory shifts is essential for maintaining compliance and securing your competitive edge. the draft bill transposing the directive is here the directive (eu) 2022/2041 can be found here ecj caselaw c-19/23 can be accessed here

the luxembourg special limited partnership (scsp) has become the go-to vehicle for private equity, venture capital, and real estate funds. it offers flexibility, tax efficiency, and minimal regulatory hassle, but only if you structure it correctly. get it wrong, and you could face serious regulatory consequences. what is an scsp? introduced in 2013, the scsp is luxembourg's answer to the anglo-saxon limited partnership. it operates without direct regulatory supervision and offers maximum contractual freedom to design your own investment structure. key features at a glance no legal personality - the scsp does not constitute a legal entity distinct from that of its partners. this is familiar territory for investors used to common law limited partnerships. partner structure - at least one general partner with unlimited liability (typically a limited liability company to contain risk) and one or more limited partners whose exposure is capped at their capital commitment. maximum flexibility - the partnership agreement governs almost everything: profit sharing, governance, transfers, carried interest, waterfalls, and more. you design the structure you need. formation and registration the scsp may be established by a private agreement (sous seing privé), without the need for a notarial deed. the partnership agreement must be registered with the luxembourg trade and companies register (registre de commerce et des sociétés) and must contain certain mandatory particulars, including the name of the partnership, its registered office, the identity of the partners, the purpose of the partnership, the duration (which may be limited or unlimited), and the contributions of each partner. the scsp must include the designation "scsp" or "société en commandite spéciale" in its name. management and governance the general partner is responsible for the management and representation of the scsp. limited partners may not participate in the management of the partnership; any involvement in management activities may result in the loss of their limited liability status. however, limited partners may exercise certain supervisory, advisory, and consent rights without jeopardising their limited liability, provided these rights do not extend to day-to-day management. tax treatment the scsp is, in principle, treated as fiscally transparent for luxembourg direct tax purposes, meaning that the partnership itself is not subject to corporate income tax or municipal business tax. instead, income and gains are attributed to the partners and taxed at their level according to their respective tax status and residence. this transparency makes the scsp particularly attractive for international investors seeking to avoid double taxation and to benefit from tax treaties applicable in their home jurisdictions. the scsp is also generally treated as a partnership (rather than a corporation) for the purposes of the tax laws of most other jurisdictions, though investors should confirm the treatment in their home jurisdiction on a case-by-case basis. structuring outside the scope of aifmd a key consideration when establishing an scsp is whether the structure falls within the scope of the alternative investment fund managers directive (aifmd). if an scsp qualifies as an alternative investment fund (aif) under aifmd, its manager (aifm) must either be authorised by the cssf or register under the partial exemption. the core test - aifmd applies to collective investment undertakings that (1) raise capital from multiple investors, (2) invest according to a defined investment policy, and (3) do so for the benefit of those investors. structures that fail any limb of this test fall outside aifmd entirely. de minimis thresholds - even if the scsp qualifies as an aif, its manager (gp) may escape full authorisation if assets under management stay below eur 100 million (with leverage) or eur 500 million (no leverage, no redemption rights for five years). registration with the cssf is still required, but not full authorisation. why legal advice is essential - the availability of these carve-outs is highly fact-specific. get it wrong, and the consequences are serious: enforcement action, reputational damage, and potential liability for the general partner. legal advice should be obtained at the outset to assess aifmd scope, identify the appropriate carve-out, and ensure the partnership agreement supports the intended regulatory position. ongoing monitoring is also critical: changes to investors, strategy, or aum may alter the analysis. practical considerations while the scsp offers considerable advantages, certain practical considerations should be borne in mind when establishing and operating the structure. investor profile - the scsp may not be suitable for all investor profiles. institutional investors subject to regulatory constraints may require the additional protections afforded by regulated fund structures. the choice between an scsp and a regulated alternative should be made in light of the specific objectives, investor base, and regulatory considerations applicable to the proposed structure. additionally, the private placement regime in each jurisdiction of the investor should be considered, as there may be additional considerations. anti-money laundering the applicable aml/ctf obligations for an scsp and the gp will depend on the final structure falling within the definition of an aif. beneficial ownership register - the scsp is required to identify its beneficial owners and file this information with the luxembourg register of beneficial owners (registre des bénéficiaires effectifs). compliance with beneficial ownership reporting requirements is an ongoing obligation. conclusion the luxembourg scsp has established itself as a highly flexible and tax-efficient vehicle for a wide range of investment and holding structures. its contractual freedom, tax transparency, and absence of legal personality make it an attractive option for sponsors, fund managers, and investors seeking to establish bespoke arrangements in a well-regarded european jurisdiction. given the complexity of the regulatory landscape and the significant consequences of inadvertent non-compliance, sponsors and investors should engage experienced legal counsel at the earliest opportunity.

on 13 february 2026, the cayman islands monetary authority (cima) extended the deadline for settling outstanding balances related to revised annual fees for regulated mutual and private funds. the new deadline is 15 march 2026, extended from the original 15 february 2026. penalties will be imposed after this date. this extension allows stakeholders additional time to complete internal reconciliations, administrative processes, and payment arrangements. funds must ensure all outstanding fees are fully paid by the new deadline to avoid non-compliance penalties. cima’s industry notice can be accessed here

on 4 february 2026, the cayman islands monetary authority (cima) published a notice to assist stakeholders in interpreting the revised fees for regulated mutual funds and private funds, effective 1 january 2026. these updates follow cima's earlier notice on 31 december 2025, which outlined broader fee adjustments across financial services to align with international standards and enhance administrative efficiency. key fee revisions for funds: registered funds: annual fee increased from us$3,675 to us$4,125. master funds: annual fee increased from us$2,625 to us$3,075. sub-funds (mutual funds): fee increased from us$300 to us$750 per sub-fund. sub-funds and aivs (private funds): fee increased from us$300 to us$525 per sub-fund or aiv. important details: fees for financial years ending on or before 31 december 2025 remain at pre-revised rates. for 2026, fees will be split into base and incremental amounts on the reefs portal. from 2027 onwards, they will appear as a single payment. the annual fee deadline remains 15 january each year. outstanding balances arising as a result of the revised fees must be settled by 15 march 2026 (previously the deadline was 15 february 2026, however the deadline has been extended as per the industry notice, available here). cima’s industry notice can be found here