Cyprus Steps Up Efforts to Combat Financial Crimes with Strong Internal Controls
Cyprus has demonstrated its commitment to combating financial crimes, particularly money laundering and terrorist financing activities, by implementing a robust framework that aligns with European Directives and Regulations. This effort has been recognized as largely positive in recent assessments by the European Union, Organization for Economic Cooperation and Development (OECD), and the Council of Europe’s Committee of Experts on Money Laundering and Terrorist Financing (MONEYVAL).
Recent Amendments to Prevention and Suppression of Money Laundering Activities Law
In 2021, Cyprus introduced significant amendments to its Prevention and Suppression of Money Laundering Activities Law, bringing it in line with the EU’s 5th Anti-Money Laundering Directive. The key measures include:
- Creation of centralized Ultimate Beneficial Owner (UBO) registries accessible to obligated entities demonstrating legitimate interest
- Requirements for private UBO registers for bank accounts
- Enhanced due diligence on customers from high-risk third countries
Regulation of Cryptocurrencies
Cyprus has also taken steps to bring cryptocurrencies under the scope of existing anti-money laundering regulations by introducing a legal definition. This move aims to prevent the misuse of cryptocurrencies and ensure their use is in compliance with international standards.
International Sanctions and Restrictive Measures
Cyprus is obligated to follow International Sanctions issued by the United Nations Security Council and Restrictive Measures adopted by the European Union’s Council. The country has established the National Unit on the Implementation of Sanctions, which oversees the imposition of sanctions.
Regular Audits and Assessments
To ensure effective implementation of these measures, Cyprus is subject to regular audits by the EU, OECD, and MONEYVAL. The latest assessment conducted in 2022 acknowledged significant progress made by Cyprus in improving its level of compliance with the Financial Action Task Force’s (FATF) 40 recommendations since the previous review.
Key Improvements
Notable measures include improvements related to:
- Non-profit organizations
- Virtual asset services providers
- Powers of investigative and law enforcement authorities
Conclusion
As a result, Cyprus remains within MONEYVAL’s enhanced follow-up program and will continue to report on its progress in strengthening its implementation of measures to combat money laundering and terrorist financing.