Financial Crime World

Cyprus Under Scrutiny: Anti-Money Laundering Laws Come under the Spotlight

A Growing Concern for the Financial Sector

In a move that has sent shockwaves through the financial sector in Cyprus, the Central Bank of Cyprus (CBC) has come under fire over alleged discrepancies in its anti-money laundering (AML) laws. The CBC’s governance and regulatory framework are being questioned, leaving many investors to wonder if Cyprus remains a trustworthy financial hub.

A Brief History of the Central Bank of Cyprus

The Central Bank of Cyprus was established in 1963, shortly after Cyprus gained its independence from British rule. At that time, it was governed by the Central Bank of Cyprus Law, 1963 and the relevant articles of the Constitution. However, with the ever-changing financial landscape, the laws governing the CBC have not kept pace.

Criticisms of Current AML Laws

The CBC is now governed by the Central Bank of Cyprus Law, 2002 as amended - a piece of legislation that has been criticized for being outdated and ineffective in tackling money laundering concerns. Critics argue that:

  • The current laws do not provide sufficient protections against illicit activities.
  • There are weaknesses in the system that can be exploited by rogue individuals and organizations.

Consequences of Inaction

Cyprus’ reputation as a financial hub is under threat, with many investors questioning the country’s commitment to transparency and regulatory compliance. The EU’s Fifth Anti-Money Laundering Directive set to take effect in 2020 will only exacerbate this issue if Cyprus fails to act.

A Call for Urgent Reforms

Industry insiders are calling for urgent reforms to bring Cypriot AML laws into line with international standards. The CBC has yet to comment on the allegations, but it is imperative that they address these concerns and take steps towards safeguarding the country’s financial reputation.

Will Cyprus Rise to the Challenge?

With time running out before the EU directive takes effect, one thing is clear: the Central Bank of Cyprus has a critical role to play in safeguarding the country’s financial reputation. Only time will tell if they will rise to the challenge and take necessary steps to protect their reputation and maintain trust among investors.