Financial Crime World

Cypriot Authorities Make Progress in Combating Financial Crime, But Shortcomings Remain

Strasbourg, November 25, 2022 - A recent report published by the Council of Europe’s Committee of Experts on Money Laundering and Terrorist Financing (MONEYVAL) has found that Cyprus has made some progress in improving its level of compliance with Financial Action Task Force (FATF) standards on combating money laundering and the financing of terrorism.

Progress Made

The Cypriot authorities have taken further measures aimed at improving the level of compliance with FATF Recommendations concerning non-profit organizations, virtual asset services providers (VASPs), and powers of investigative and law enforcement authorities. Specifically:

  • Risk Assessment and Monitoring: Cyprus has made progress in assessing terrorism financing (TF) risk exposure by the non-profit sector and strengthening its oversight activities.
  • VASP Regime Implementation: Substantive progress has been made by Cyprus in implementing its VASP regime, but some technical deficiencies remain in the implementation of preventive measures, including the “travel rule”.

Shortcomings Remain

However, moderate shortcomings still exist, including:

  • Interception of Communications: The absence of powers to intercept the content of communication concerning the investigation of money laundering (ML), TF, and some other associated predicate offences remains a concern.
  • Implementation of Recommendations: Cyprus is not fully compliant with FATF Recommendations, remaining “compliant” with 16 out of 40 recommendations, “largely compliant” with 20 recommendations, and “partially compliant” with four recommendations.

Next Steps

Cyprus is expected to report back to MONEYVAL on further progress in implementing the pending recommendations within one year. The full report can be accessed at [link].

This report highlights the ongoing efforts of Cyprus to improve its anti-money laundering and counter-terrorism financing framework, while also identifying areas for improvement. As the country continues to work towards fully implementing FATF Recommendations, it is essential to address these shortcomings to ensure effective combating of financial crime.