Financial Crime World

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Banks’ Responsibilities in Preventing Financial Crime in Cyprus: A Critical Look at the Island Nation’s Compliance with FATF Recommendations

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A recent report has highlighted the need for Cypriot banks to take a more proactive approach in preventing financial crime, as the country struggles to meet international standards set by the Financial Action Task Force (FATF).

Progress and Shortcomings

According to the report, Cyprus scored largely compliant in several areas, including:

  • Assessing risk and applying a risk-based approach
  • National cooperation and coordination
  • Targeted financial sanctions related to terrorism and terrorist financing

However, the country was found to be partially compliant in areas such as:

  • Confiscation and provisional measures
  • Money or value transfer services
  • DNFBPs: other measures

Additionally, Cyprus was found to be non-compliant in several areas, including:

  • Transparency and beneficial ownership of legal persons
  • Transparency and beneficial ownership of legal arrangements
  • Regulation and supervision of DNFBPs
  • Financial institution secrecy laws

Recommendations for Improvement

The report’s findings are a wake-up call for Cypriot banks, which must take immediate action to address these shortcomings. This includes:

  • Implementing robust customer due diligence procedures
  • Improving record keeping and internal controls
  • Enhancing cooperation with international partners

Government Response

The Cyprus government has committed to taking swift action to address the report’s recommendations, including strengthening its anti-money laundering and terrorist financing laws and regulations.

Conclusion

While progress has been made in preventing financial crime in Cyprus, there is still much work to be done. The report’s findings serve as a reminder of the importance of compliance with international standards and the need for Cypriot banks to take a more proactive approach in this area. Only through concerted effort can we ensure that the financial sector remains safe and secure for all stakeholders.