Financial Crime World

Cyprus Takes Aim at Financial Crime with US Partnership

In an effort to combat money laundering, sanctions evasion, and other financial crimes originating from its financial and professional services sectors, Cyprus is partnering with the United States to crack down on illicit activities.

Combating Financial Crimes

The island nation’s law enforcement agencies are set to sign a memorandum of agreement with the U.S. Justice Department and Federal Bureau of Investigation (FBI) to identify and prosecute financial crimes with links to Cyprus. The partnership will see the DOJ share its expertise with Cypriot counterparts in 2024, providing training and support to proactively detect, investigate, and prosecute cases involving financial crimes.

Collaboration and Expertise

The effort will involve collaboration between:

  • The U.S. State Department’s Bureau of International Narcotics and Law Enforcement Affairs
  • Cyprus’ Law Office of the Republic
  • The country’s Finance Intelligence Unit (MOKAS)

Background and Investigation

The partnership comes in response to a recent investigation by the International Consortium of Investigative Journalists (ICIJ) into the role of Cyprus in moving dirty money for Russian President Vladimir Putin’s regime. The project, known as Cyprus Confidential, revealed how Cyprus plays a significant role in laundering funds for sanctioned individuals and entities.

Government Response

Cypriot President Nikos Christodoulides requested American assistance following the investigation, which found that:

  • Nearly 800 companies and trusts registered in secrecy jurisdictions were owned or controlled by Russians who have been sanctioned since Russia’s invasion of Crimea in 2014
  • Opaque entities used to conceal investments in properties, yachts, and world-famous artwork

Steps Taken by Cyprus Government

The Cyprus government has taken steps to address the issue, approving the creation of a professional-services sector oversight body to review cases that may breach international sanctions. However, the plan has drawn criticism from some quarters, with the Cyprus Bar Association expressing concerns that it may pose risks to attorney-client privilege and other problems.

Partnership and Progress

Despite these challenges, the partnership between Cyprus and the United States is seen as a significant step forward in the fight against financial crime. The agreement will see the two countries work together to identify and prosecute illicit activities, and to share expertise and best practices in the field of financial crime investigation and prosecution.