Financial Crime World

Cyprus Cracks Down on Financial Crime: Central Bank Issues New AML/CFT Directive, Enforces UN and EU Sanctions

The Central Bank of Cyprus (CBC) has taken decisive actions to strengthen Cyprus’ financial regulatory framework against money laundering and terrorist financing. Aligning with EU directives and international cooperation, the CBC issued a new AML/CFT Directive and enforces UN and EU sanctions.

New AML/CFT Directive

  1. Implementing EU Directives

    • Transposing the EU’s 5MLD into domestic legislation
    • Issuing the fifth edition of the Directive on the Prevention of Money Laundering and Terrorist Financing

  2. Incorporating 5MLD Requirements

    • Ensuring cybersecurity measures
    • Increased transparency in the financial sector

Enforcing Sanctions

  1. Legislation and Directives

    • Enacted Law 58(I) of 2016 (CBC oversees entities’ compliance with UN and EU sanctions)
    • March 2020 Directive on complying with provisions of UN Security Council Resolutions and EU Council Regulations
    • Collaborating with Ministries of Finance and Foreign Affairs for information exchange and sanctions lists

  2. Combating Terrorism Financing

    • May 2019: Passed the Combating of Terrorism and Victims’ Protection Law (Law N. 75(I)/2019)

Evaluation Reports and Deficiencies

  1. MONEYVAL Evaluation Report (2019)

    • About one-third of efficiency pillars were rated substantially effective
    • Remaining eight pillars were moderately effective
    • Steps taken too late to be assessed, some shortcomings still requiring attention

  2. National Risk Assessment (NRA)

    • Identifying deficiencies
    • Taking corrective measures
    • Published in November 2018

Availability of Official Documents and Guidelines

  • CBC Directive for the Prevention of Money Laundering and Terrorist Financing (fifth edition)
  • Prevention and Suppression of Money Laundering Laws of 2007-2021
  • UN Security Council Resolutions
  • EU restrictive measures
  • EUSanctionsMap
  • Cyprus Financial Intelligence Unit
  • Additional regulatory bodies (European Commission, European Banking Authority, Basel Committee on Banking Supervision, Financial Action Task Force)

These resources aim to facilitate a holistic approach to combating financial crime in Cyprus.