Bribery and Corruption in Finance: Cyprus Takes a Step Forward, But Challenges Remain

Cyprus has taken a significant step towards tackling bribery and corruption in its finance sector with the approval of legislation establishing a national anti-corruption agency. This move comes as a response to mounting concerns over the country’s reputation for lax enforcement of anti-corruption laws.

Creating an Anti-Corruption Agency

The new law creates a five-member committee responsible for monitoring state officials’ assets, dealings, and interests. An advisory board comprising a retired judge, presidents of the Cyprus Bar Association and Association of Certified Public Accountants, and university rectors will also be established to oversee the agency’s work.

Investigative Powers

The anti-corruption authority will have the power to investigate suspected corruption in the broader public sector, including reports about private companies dealing with the state. Its members will serve a six-year term, ensuring continuity and independence.

Challenges Ahead

Despite this progress, experts warn that Cyprus still has a long way to go in ridding itself of its reputation for corruption. Transparency International’s Corruption Perceptions Index 2021 ranks Cyprus 52 out of 180 countries, with a score of 53 out of 100. This represents a decline from previous years.

Political System Criticized

The government and political system have been accused of sweeping corruption under the carpet following revelations of sleaze in high places. The country’s golden passport scheme was recently scrapped after allegations of abuse and corruption.

Limitations of New Legislation

While the new legislation is seen as a positive step, critics argue that it may not be enough to address the root causes of corruption. Some experts have expressed concerns over the restrictions on public access to information, which could prevent “witch hunts” but also undermine transparency.

Navigating Complexities

The anti-corruption body will also have to navigate the complexities of dealing with ongoing police investigations, as it is required to step down if there is an active probe in a particular case.

Welcoming the Move

Justice Minister Stephie Drakou has welcomed the move as a significant step towards setting up an institutional shield against corruption. “We now have the tools to prevent corruption, identify suspects, and bring them before justice,” she said.

Implementing Effectively

The passage of this legislation comes ahead of Cyprus’s eligibility for the next instalment of the EU Recovery and Resilience Fund, which is conditional on demonstrating progress in tackling corruption. With its reputation on the line, Cyprus must now ensure that these new laws are effectively implemented to restore public trust.