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CBC Takes Decisive Measures to Combat Money Laundering and Terrorist Financing

The Central Bank of Cyprus (CBC) has taken a series of measures aimed at strengthening the country’s anti-money laundering and counter-terrorism financing (AML/CFT) framework, in accordance with international standards.

Strengthening the AML/CFT Framework

Under Section 59(6A) of the AML/CFT Law, the CBC is empowered to impose penalties, including financial fines, suspension or revocation of licenses, and removal from positions of directors, managers, and officials, including Money Laundering Compliance Officers and Heads of Internal Audit Units and Regulatory Compliance Units.

The CBC has also taken corrective measures in accordance with Section 41(D) of the Business of Credit Institutions Law (66(I)/1997), as amended.

Targeted Economic Sanctions

In addition to these measures, the CBC has implemented targeted economic sanctions against individuals and entities designated by the United Nations Security Council and the European Union. These sanctions aim to prevent the use of the financial system for money laundering or terrorist financing.

National Risk Assessment

As part of its efforts to reinforce the fight against money laundering and terrorist financing, Cyprus conducted a national risk assessment in 2018, in collaboration with the World Bank. The assessment identified deficiencies in the regulatory framework and effectiveness of procedures followed by stakeholders involved in this effort.

The National Risk Assessment Report was published in November 2018 by the Ministry of Finance.

MONEYVAL Follow-up

In December 2021, the CBC reported back to MONEYVAL (Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism) as part of its enhanced follow-up procedure. The report stated that while some measures have been taken to improve compliance, other shortcomings remain to be addressed.

Useful Links

For more information on the CBC’s AML/CFT framework and measures:

• CBC Directive for the prevention of money laundering and terrorist financing (fifth edition)
• Prevention and Suppression of Money Laundering Laws of 2007-2021 (unofficial consolidation)
• Prevention and Suppression of Money Laundering Activities Law 40(I) of 2022 (in Greek)

For more information on international standards and guidelines:

• Directive (EU) 2015/849 of the European Parliament and of the Council
• Regulation (EU) 2015/847 of the European Parliament and of the Council

Sources

• Cyprus Financial Intelligence Unit - ‘MOKAS’
• Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL)
• European Commission
• European Banking Authority
• Basel Committee on Banking Supervision
• Financial Action Task Force (FATF)

The CBC remains committed to implementing effective measures to combat money laundering and terrorist financing, in line with international standards.