Cyprus: Europe’s Compliant Financial Hub thanks to Robust Regulatory Framework
A Beacon of Regulatory Compliance in Europe’s Financial Landscape
Amidst the turmoil in Europe’s financial landscape, Cyprus stands out as a beacon of regulatory compliance and a robust legal framework. With its adherence to European Union regulations, the Mediterranean island has become a favorable destination for foreign businesses.
Legal Foundation based on English Common Law
Cyprus’ legal foundation is based on English Common Law, a system familiar to many international businesses. Over the past few years, Cyprus legislation has been altered to adhere to EU requirements. This commitment to regulatory compliance has resulted in a legal and regulatory system that is not only favorable in Europe but also fully compliant with the EU, Financial Action Task Force (FATF), the Organization for Economic Co-operation and Development (OECD), and the Financial Stability Forum.
Regulators and Authorities
- Central Bank of Cyprus (CBC): Responsible for supervising commercial banks and cooperative credit institutions until 2014.
- European Central Bank (ECB): Now responsible for supervising the largest eurozone banks (Bank of Cyprus, Hellenic Bank, and RCB Bank) under the European Union’s Single Supervisory Mechanism (SSM).
- Superintendent for Insurance Control (SI): Supervises insurance institutions.
- Cyprus Securities and Exchange Commission (CySEC): Supervises investment firms and stock exchanges.
Anti-Money Laundering (AML) Measures
Cyprus has taken decisive measures to prevent and suppress money laundering and terrorist financing activities. Cooperation with foreign supervisory authorities is a priority, along with adherence to international standards and imposed regulations:
- EU Anti-Money Laundering Directives: The 4th and 5th EU AML Directives have been implemented into law.
- Sanctions: Adherence to sanctions imposed by the European Union, the United Nations, and the US Treasury OFAC.
- Ultimate Beneficial Owner (UBO) Registries: Available from March 2020. It is mandatory for individuals and legal entities to protect themselves, their companies, and the financial system of Cyprus from money laundering.
entities are vital in safeguarding Cyprus’ financial system and establishing its position as a leading international financial center.
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