Financial Crime World

Headline: Moneyval Report Identifies Areas for Improvement in Cyprus’ AML/CFT Regime

Subheadline: International body commends progress made, but calls for more aggressive action and targeted measures

February 2020: Cyprus’ anti-money laundering and countering the financing of terrorism (AML/CFT) regime underwent a thorough assessment by Moneyval, the Council of Europe’s anti-money laundering body. The evaluation results, published recently, reveal both progress made and areas requiring improvement.

Key achievements in Cyprus’ fight against financial crime

  • A strong understanding of money laundering risks at national and sectoral levels, evidenced by an aligned national strategy and action plan.
  • Enhanced cooperation and coordination between competent agencies.
  • Strengthened measures adopted by the banking sector.
  • An effective Financial Intelligence Unit.
  • Developed mechanisms for offering constructive assistance to other countries.

Moneyval Observations: Although some significant improvements are required for the full effectiveness of Cyprus’ AML/CFT regime.

Unaddressed challenges

  1. Lack of adequate pursuit of money laundering from foreign criminal proceeds: Hampers efforts to freeze and confiscate such funds.
  2. Absence of a formal risk assessment of legal persons: Limits the ability to implement targeted mitigating measures.
  3. Insufficient implementation of preventive measures by the trust and corporate services sector: Leads to challenges in obtaining beneficial ownership information and reporting suspicious transactions.
  4. Weak supervision of the real estate sector: Necessitates more monitoring of transactions.
  5. Inadequate assessment of risks related to the Cyprus Investment Programme.
  6. Limited understanding of risks associated with terrorist financing and the proliferation of weapons of mass destruction among trust and corporate service providers.
  7. Insufficient risk assessment of the Non-Profit sector: To identify potential money laundering and terrorist financing vulnerabilities.

Recommendations from Moneyval

The report urges Cypriot authorities to:

  • Take more aggressive action in pursuing money laundering proceeds originating outside the country.
  • Implement targeted measures to mitigate risks to legal persons.
  • Enhance the supervision of the real estate sector.
  • Comprehensively assess the risks related to the Cyprus Investment Programme.

Moneyval will apply an enhanced follow-up procedure, and Cyprus has been invited to report back at its first plenary in 2021. For more detailed information, please visit our Anticorruption & AML microsite or contact [Ms. Polina Ioannou](mailto:This email address is being protected from spambots. You need JavaScript enabled to view it.).