Uncovering Financial Crimes in Cyprus: A National Risk Assessment

Cyprus, as an international financial hub, has undertaken a proactive step to identify and assess the money laundering and terrorist financing risks it faces, as part of its obligations under the 4th EU Anti-Money Laundering Directive. In 2015, Cyprus embarked on a comprehensive National Risk Assessment (NRA) aided by the World Bank methodology.

Money Laundering Threat Analysis

The following sections detail the money laundering threat analysis from the National Risk Assessment.

Identified Risks

• Cyprus, though not a high domestic crime country, faces a significant threat from:

  • Fraud and related offenses
  • Drugs offenses
  • Corruption
  • Tax evasion
  • Human trafficking
  • and other activities.

• Strategic geographical location and well-developed professional services sector make it an attractive target for international criminals.

High-risk sectors

The following sectors pose a medium-high risk:

• Banking sector
• Trust and company service providers (TCSPs)

National Vulnerability Evaluation

The second part of the report evaluates the national vulnerability to money laundering. Despite significant progress in combating money laundering, there are still areas for improvement, such as:

• Enhancing awareness among investigators, prosecutors, and the judiciary
• Allocating additional resources to strengthen the combating ability

Significance of the National Risk Assessment

This National Risk Assessment is significant because it aligns with the European Commission’s first supranational risk assessment and will be taken into consideration during the first update of the country’s National Risk Assessment. The comprehensive report is an outcome of a collaborative effort between various competent authorities and the private sector, marking a critical step towards strengthening the country’s defenses against financial crimes.