Financial Crime World

Cyprus Sees Rise in Financial Crimes Despite Low Overall Crime Rate

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Cyprus, known for its safety and low overall crime rate, has been facing a significant increase in financial crimes. While the country experiences relatively low levels of violent crime, property crimes such as burglary and theft are more common.

Financial Crimes: A Growing Concern

The island nation’s role as a financial hub has led to concerns over financial malpractices, particularly with regards to Russian oligarchs and business entities. In 2023, President Nikos Christodoulides invited officials from the Federal Bureau of Investigation (FBI) and the United States Department of Justice to assist with investigations into allegations that Cypriot financial service providers had helped Russian oligarchs skirt international sanctions.

  • The “golden passport” scheme in Cyprus has been widely criticized for its potential for abuse, allowing individuals to obtain Cypriot citizenship in exchange for significant investments.
  • The program attracted many high-net-worth individuals, including those with dubious backgrounds.

Progress and Challenges

According to the Council of Europe’s Moneyval report, while Cyprus has made progress in combating money laundering and terrorism financing, several challenges remain. The country has improved its compliance with Financial Action Task Force (FATF) standards, but further efforts are needed to address weaknesses in its anti-money laundering regime.

  • The crime rate per capita in Cyprus rose for the second consecutive year in 2023, reaching 584 serious offenses per 100,000 residents.
  • The overall crime rate has seen an increase, with property-related offenses leading the statistics.

Prison System and Support

The incarceration rate in Cyprus is high, standing at 103 per 100,000 population. The Council of Europe’s Committee for the Prevention of Torture (CPT) has recommended that the Cypriot authorities ensure that foreign nationals are able to progress through their sentences similarly to Cypriot prisoners, and enhance support for foreign nationals in the Central Jail of Nicosia.

Conclusion

While Cyprus remains one of the safest countries globally, its financial sector is under increased scrutiny due to concerns over money laundering and other financial crimes. The government has taken steps to address these concerns, but more work needs to be done to ensure that the island nation’s financial reputation is upheld.