Cypriot Authorities Make Progress in Fighting Money Laundering and Terrorism Financing, But Shortcomings Remain

A recent report by the Council of Europe’s Committee of Experts on Money Laundering and Terrorist Financing (MONEYVAL) has evaluated Cyprus’ progress in improving its compliance with international standards aimed at combating money laundering and terrorism financing. While some progress has been made, moderate shortcomings still persist.

Progress Made

The Cypriot authorities have taken steps to improve their level of compliance with the Financial Action Task Force (FATF) recommendations concerning:

• Non-profit organizations
• Virtual asset services providers
• Powers available to investigative and law enforcement authorities

Shortcomings Remain

Despite this progress, Cyprus still lags behind in certain areas. The report highlights moderate shortcomings in the following areas:

• Risk assessment and monitoring of its non-profit sector
• Implementation of preventive measures against terrorism financing risks exposure by the non-profit sector
• National action plan to address risks identified in the virtual asset services provider (VASP) sector
• Technical deficiencies remain in the implementation of preventive measures
• Absence of powers to intercept the content of communications concerning the investigation of money laundering, terrorism financing, and other associated predicate offenses

Compliance Status

Cyprus remains:

• “Compliant” with 16 of the 40 FATF recommendations
• “Largely compliant” with 20 recommendations
• “Partially compliant” with four recommendations

Next Steps

The Cypriot authorities are expected to report back to MONEYVAL on further progress in implementing pending recommendations within the next year.

Conclusion

While some progress has been made, moderate shortcomings still persist. The Cypriot authorities must continue to work towards improving their compliance with international standards aimed at combating money laundering and terrorism financing.