Financial Crime World

title: “Cyprus’ Tough Stance on Money Laundering: Strict Legislation and Enforcement”

Overview of Cyprus’ Anti-Money Laundering (AML) Regulations

Cyprus enforces strict anti-money laundering (AML) laws to prevent criminal activities such as money laundering and terrorist financing. The island nation’s legislation, called the Prevention and Suppression of Money Laundering Activities Law 2007, has been updated to adhere to the EU’s Fourth Amended Money Laundering Directive.

Application of the Legislation

The law applies to select “Obliged Entities,” which include:

  1. Banking institutions
  2. Cooperative societies
  3. Investment firms
  4. Stockbroking firms
  5. Accountants
  6. Insurance companies
  7. Real estate agents (rents exceeding EUR 10,000)
  8. Advocates
  9. Trust and company service providers
  10. Money transfer services
  11. Dealers in precious metals and precious stones
  12. Casinos
  13. Crypto-asset service providers
  14. Traders
  15. Art dealers (dealings exceed EUR 10,000)
  16. High-risk professions or businesses

Prohibition of Money Laundering and Terrorist Financing

The legislation aims to:

  • Prevent money laundering offenses
  • Prevent predicate offenses, which include terrorist financing
  • Penalize the laundering of funds from any criminal activity

Defining Money Laundering

Money laundering is defined as the use or enjoyment of proceeds from criminal offenses.

Level of Intent and Knowledge

Anyone who knows or should have known that proceeds from illicit activities are being used in specified actions is liable for money laundering offenses. Both individuals and corporate entities are subject to these offenses.

Penalties for Infringing the Legislation

Individuals

  • Up to 14 years in prison
  • Fines of up to EUR 500,000 for intentional offenses
  • Prison sentences of up to 5 years and fines of up to EUR 50,000 for unintentional enablement or facilitation

Corporate Entities

  • Exclusion from public benefits, aid, funding, commercial activity, liquidation orders, and closure of premises

Extraterritorial Reach of the Legislation

The legislation applies to any individual or entity involved in the commission of a criminal offense within Cyprus, regardless of their location.

Additional AML Regulations

  • Registration and reporting obligations for businesses and individuals in certain sectors
  • Registration of Ultimate Beneficial Owners (UBOs) in separate public registers
  • Reporting of knowledge or suspicion of money laundering activities to the Financial Intelligence Unit (MOKAS)
  • Monthly reporting of selected transactions for all Cypriot banks
  • Penalties for non-compliance with reporting obligations

Enforcement and Contact Information for MOKAS

MOKAS is the primary enforcement authority for money laundering and terrorist financing investigations in Cyprus. They:

  1. Facilitate the prosecution of offenses under the law
  2. Conduct inquiries related to the financing of terrorism
  3. Have the power to request freezing orders, confiscation orders, and disclosure orders

Contact details for MOKAS: