Financial Crime World

Financial Corruption in Cyprus: A Growing Concern According to European Watchdog

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Cyprus is facing a growing concern about financial corruption, according to a report by the Council of Europe’s anti-corruption group GRECO. The report highlights the need for decisive action to counter widespread public perceptions of corruption and hold those at the highest levels of power accountable.

Institutional Flaws Undermine Effectiveness of Laws

Cyprus’ laws may appear strong on paper, but institutional flaws, including numerous anti-corruption bodies that lack coordination, resources, and authority, undermine their effectiveness. GRECO urges Cyprus to establish a stronger system of accountability in government to prevent influence-peddling and ensure that politicians do not serve the interests of big business and the wealthy.

Key Recommendations

  • Establish a stronger system of accountability in government
  • Ensure transparency regarding politicians’ assets
  • Provide better access to information
  • Conduct integrity background checks before appointing high-ranking officials
  • Develop targeted guidance for political appointees on how they should conduct themselves with lobbyists and others

Areas of Concern

GRECO highlighted several areas of concern, including:

  • Lack of system in place to identify major corruption risks for high-ranking officials
  • No mechanism for conducting integrity background checks before appointment
  • Inadequate transparency regarding politicians’ assets
  • Limited access to information
  • Insufficient representation of women in the police force
  • Inadequate vetting processes for police members

Scandals and Public Distrust

Cyprus has consistently ranked low in public trust surveys, with a recent European opinion poll finding that 94% of Cypriots believe corruption is widespread in the country - nearly 30% higher than the European Union average. This distrust has been fueled by scandals such as the now-defunct citizenship-for-investment program.

Government Response

In response to these concerns, Cypriot President Nikos Christodoulides acknowledged the waning public trust in government and its institutions during an anti-corruption forum last week. He pledged a series of actions to address this perception over his five-year tenure, including:

  • Creation of an internal auditing body for the executive branch
  • Coordination secretariat to oversee individual ministries
  • Binding code of ethics

Conclusion

While progress has been made in passing new laws, much work remains to be done to combat financial corruption in Cyprus and restore public trust in its institutions. GRECO’s report highlights the need for decisive action to address these concerns and promote transparency and accountability in government.