Financial Crime World

Cyprus Fails to Fully Implement Measures to Combat Financial Crimes, MONEYVAL Report Reveals

Introduction

A recent report by the Council of Europe’s Committee of Experts on Money Laundering and Terrorist Financing (MONEYVAL) has highlighted Cyprus’ progress in combating financial crimes such as money laundering and terrorism financing. While the Cypriot authorities have taken steps to improve their compliance with Financial Action Task Force (FATF) standards, moderate shortcomings remain.

Progress Made

According to the report, Cyprus has made improvements in its measures aimed at combating:

  • Non-profit organizations: Cyprus has strengthened its regulations and supervision of non-profit organizations, including risk assessment and monitoring.
  • Virtual asset services providers: Cyprus has implemented a virtual asset services provider regime, although some technical deficiencies remain.
  • Powers of investigative and law enforcement authorities: Cyprus has enhanced the powers of its investigative and law enforcement authorities to combat financial crimes.

Shortcomings Remain

However, the report notes that Cyprus still needs to implement fully:

  • Risk assessment and monitoring of its non-profit sector
  • Supervision of virtual assets related services
  • A national action plan to address risks identified in the virtual asset services provider sector

Additionally, while progress has been made in assessing terrorism financing (TF) risk exposure by the non-profit sector, these measures have not yet been fully implemented.

Compliance with FATF Recommendations

Cyprus remains “compliant” with 16 of the 40 FATF Recommendations, “largely compliant” with 20 Recommendations, and “partially compliant” with four Recommendations. The report does not assess the degree to which these reforms have been effectively implemented in practice.

Next Steps

Cyprus is expected to report back to MONEYVAL on further progress to implement the pending recommendations within one year.

Full Report

The full report can be accessed at [link].

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