Financial Crime World

Cyprus’ Robust Financial Compliance Framework: EU Regulations and Anti-Money Laundering Measures

Amidst the Mediterranean Sea, Cyprus has become a leading international financial center, renowned for its robust regulatory framework and commitment to European Union (EU) regulations. With a legal system grounded in English Common Law and recent amendments to meet EU requirements, the island offers a familiar and dependable business environment.

Cyprus’ Financial Regulators

The country’s financial services sector is overseen by three primary regulatory bodies:

  • The Central Bank of Cyprus (CBC)
  • The Superintendent for Insurance Control (SI)
  • The Cyprus Securities and Exchange Commission (CySEC)

However, in 2014, the EU introduced its Single Supervisory Mechanism (SSM). As a result, the supervision for Cyprus’ largest banks – Bank of Cyprus, Hellenic Bank, and RCB Bank – was transferred from the CBC to the European Central Bank (ECB).

A Strong Commitment to Anti-Money Laundering (AML) Compliance

Cyprus has established comprehensive mechanisms to prevent and suppress money laundering and terrorist financing activities. The country collaborates with foreign supervisory authorities in accordance with the Financial Action Task Force (FATF) recommendations, ensuring its financial sector legislation and practices align with international standards. Cyprus’ AML laws adhere to the 4th EU Anti-Money Laundering Directive. The nation is in full compliance with sanctions issued by the EU, the United Nations, and the US Treasury’s Office of Foreign Assets Control (OFAC). Cyprus transposed the 5th EU AML Directive into law in September 2019, with the full functionality of Ultimate Beneficial Owner (UBO) registries becoming available from March 2020.

All individuals and legal entities involved in financial and other business activities are required to take proactive measures against money laundering by:

  1. Implementing standard procedures
  2. Adhering to stringent record-keeping protocols

These measures aim to protect individuals, companies, and the entire Cyprus financial system.

For more information on Cyprus’ financial compliance regulations and related articles, visit CountryProfiler.

[December 2020]