Financial Crime World

Cyprus Makes Progress Against Financial Crimes, But Shortcomings Remain

Nicosia, [Date]

The Council of Europe’s anti-money laundering and counter-terrorist financing body, MONEYVAL, has recently evaluated Cyprus’ efforts to combat money laundering and terrorism financing. The assessment highlights both progress and remaining shortcomings in the country’s legislative, regulatory, and institutional measures.

Progress Made

Cyprus has made significant strides in its compliance with Financial Action Task Force (FATF) standards, particularly in regards to:

  • Non-profit organizations
  • Virtual asset services providers (VASPs)
  • Investigative authorities’ powers

However, further efforts are still needed to fully implement these measures.

Shortcomings Remain

The report also notes that Cyprus’ terrorism financing risk exposure within the non-profit sector has not yet been fully addressed. Additionally, MONEYVAL identified:

  • A lack of a national action plan to address risks in the VASPs sector
  • Technical deficiencies in the implementation of preventive measures for VASPs
  • Moderate investigative capabilities of Cypriot authorities, with powers to intercept communication content lacking for investigations related to money laundering, terrorism financing, and associated predicate offenses

Global Efforts Needed

MONEYVAL has urged governments worldwide to step up their efforts to combat financial crimes, citing:

  • Insufficient recovery of proceeds from crime across states
  • The need to strengthen national frameworks for asset management and recovery

The organization’s Chair, Elżbieta Frankow-Jaśkiewicz, emphasized the need for governments to improve results in identifying and freezing criminal funds, as well as confiscating and managing them.

MONEYVAL’s Annual Report

The assessment is part of MONEYVAL’s annual report for 2022, which evaluates compliance with international standards and developments in legal and institutional frameworks to counter money laundering and terrorism financing. The organization monitors 33 states and territories, including Cyprus, and found that:

  • 21 of these states were subject to its enhanced follow-up procedure due to limited levels of compliance with anti-money laundering and combating the financing of terrorism (AML/CFT) standards

Conclusion

While Cyprus has made progress in addressing financial crimes, there remains work to be done to fully implement FATF standards and strengthen investigative capabilities. The country’s efforts must continue to address remaining shortcomings and ensure effective implementation of measures to combat money laundering and terrorism financing.

Key Takeaways

  • Cyprus has made significant strides in its compliance with FATF standards
  • Shortcomings remain in the non-profit sector, VASPs regime, and investigative authorities’ powers
  • MONEYVAL urges governments worldwide to step up their efforts to combat financial crimes
  • Strengthening national frameworks for asset management and recovery is crucial
  • Effective implementation of measures to combat money laundering and terrorism financing remains a priority.