Financial Crime World

Financial Crime Risk Assessment in Cyprus Reveals Mixed Results

The Financial Action Task Force (FATF) has released a recent assessment on Cyprus’ efforts to combat financial crime, revealing both significant progress and areas for improvement.

Compliance Achievements

Cyprus has achieved “largely compliant” ratings in several key areas:

  • Assessing risk and applying a risk-based approach
  • National cooperation and coordination
  • Targeted financial sanctions related to terrorism and terrorist financing

Additionally, the country has demonstrated compliance in: + Financial institution secrecy laws + Customer due diligence + Record keeping + Internal controls

Areas for Improvement

Cyprus was found to be “partially compliant” in several areas:

  • Confiscation and provisional measures
  • Money laundering offence
  • Terrorist financing offence

Furthermore, the country received a “non-compliant” rating in: + Handling of non-profit organisations + Transparency and beneficial ownership of legal persons

Significant Improvement Required

The report highlights areas where Cyprus requires significant improvement:

+ Regulation and supervision of financial institutions, DNFBPs, and mutual legal assistance
+ Guidance and feedback
+ Sanctions
+ International instruments
+ Other forms of international cooperation

The Importance of FATF Assessments

The FATF assessment is a critical tool for identifying countries vulnerable to financial crime and promoting global cooperation in combating this threat. The report provides a detailed breakdown of Cyprus’ compliance with the FATF recommendations, highlighting both strengths and weaknesses in the country’s anti-money laundering and counter-terrorist financing regime.

Conclusion

While Cyprus has made significant progress in implementing measures to combat financial crime, the country still faces challenges in several key areas. To address these shortcomings, it is essential for Cyprus to implement effective reforms and strengthen its regulatory framework to prevent the misuse of its financial system.