Financial Crime World

Cyprus: A Crossroads for Financial Crimes

Cyprus, located in the Mediterranean Sea, is a strategically situated island nation between Europe, Asia, and Africa. Its porous borders and rich cultural diversity make it a hub for various criminal activities, with financial crimes being a major concern.

Sex Trafficking: The Island’s Shame

  • Thriving market for human trafficking: Cyprus is a popular destination for human trafficking, particularly during tourist season.
  • False promises: Victims are often lured with promises of legitimate work and end up in sexual exploitation.
  • Lured by smugglers: Young women are frequently lured from neighboring countries.
  • Exploitation of foreign workers: Exploitation in agriculture, construction, and service industries is rampant.
  • Forced labor: Cases are frequently trivialized, leading to accusations of authorities tolerating exploitative practices.

People Smuggling and Asylum Seeking

  • Popular destination: Cyprus is a popular destination for both transit and destination country for people smuggling.
  • Arrivals by boats and ships: Arrivals come via various means.
  • Transit to seek asylum: Once in the TRNC, asylum is sought from the Republic of Cyprus.
  • Fake marriages: Some seek political asylum through fraudulent marriages, facilitated by smugglers.
  • Increase in asylum applications: There has been an increase in asylum applications from unaccompanied minors and people from sub-Saharan Africa and South Asia.

Organized Crime in Nightlife Establishments

  • Extortion: Organized crime groups engage in extortion, particularly in nightlife establishments and popular tourist locations.
  • Illicit activities: Criminals collect protection money and engage in other illicit activities.

Arms Trafficking and Counterfeit Goods

  • Significant transit country: Cyprus is a significant transit country for firearms trafficking.
  • TRNC origin: Much of the arms trafficking originates in the Turkish Republic of Northern Cyprus (TRNC).
  • Counterfeit goods: Counterfeit goods pose a significant problem, with millions of euros lost annually to counterfeiting and piracy.

Environmental Crimes

  • Illegal logging: Illegal logging occurs in protected areas due to local demand for firewood, but organized crime involvement is not established.
  • Poaching: Poaching of migratory birds is the most common environmental crime, primarily targeting Middle Eastern, African, and European songbird species.

Non-renewable Resource Crimes

  • Fuel smuggling: Cypriot customs personnel have been effective in stopping fuel smuggling.
  • Islamic State oil product smuggling: Oil product smuggling to European markets from areas administered by Turkish Cypriots continues to be a concern.
  • Copper and gold mining: Limited illegal mining activities occur, but organized crime involvement has not been established.

Drug Trafficking

  • Limited heroin trafficking: Targets the domestic market, smuggled primarily from Afghanistan via maritime routes.
  • Cocaine: One of the largest criminal markets, driven by international demand, primarily enters through passenger flights or airfreight originating in Latin America, Belgium, or the Netherlands.

Cyber Crimes

  • Data theft and ransomware attacks: Target small- and medium-sized businesses.
  • Online fraud and scams: Reports of false and misleading social media posts containing malicious software programs have increased during the pandemic.

Financial Crimes

  • Dubious tax system: Despite losing status as a tax haven, Cyprus still has a lax tax system.
  • Foreign criminal actors: Accused of helping Russian oligarchs hide assets using financial fixers.
  • Cyprus Investment Programme: Allowed individuals to buy Cypriot citizenship by investing, leading to granting citizenship to dozens of people with reported criminal backgrounds or at high risk of corruption.

Criminal Actors

  • Foreign criminal groups: Significantly involved in Cyprus’s criminal markets, including property crimes, money laundering, and drug trafficking.
  • Russian mafia: Wields the most financial and economic power.
  • Police complicity: Indications suggest that the police have been complicit in some instances of criminal activity.