US and Cyprus Join Forces to Combat Money Laundering and Financial Crimes
In a bid to strengthen their partnership against financial crimes, the United States and Cyprus announced plans to collaborate and share expertise. This collaboration aims to investigate and prosecute money laundering, sanctions evasion, and other illicit activities linked to Cyprus’ financial and professional services sectors.
Signing of Memorandum of Agreement
Under the proposed memorandum of agreement, Cyprus’ law enforcement agencies will work together with their U.S. counterparts to tackle financial crimes with connections to Cyprus. U.S. authorities will share their experience and expertise with the Cyprus Law Office of the Republic and the Finance Intelligence Unit (MOKAS) to enhance their capabilities in detecting and investigating financial crimes.
- Cyprus Law Office of the Republic
- Finance Intelligence Unit (MOKAS)
Allegations of Dirty Money in Cyprus
The partnership comes in response to allegations made in a recent cross-border journalism collaboration called Cyprus Confidential, led by the International Consortium of Investigative Journalists (ICIJ). The investigation revealed how Cyprus serves as a crucial player in moving money for various autocratic regimes, brutal dictators, and anti-democratic actors.
Key Findings of the Cyprus Confidential Investigation
- Nearly 800 companies and trusts with Russian origins were identified.
- Over 650 of these entities were registered in Cyprus.
- Owned or controlled by Russians sanctioned following Russia’s invasion of Crimea in 2014.
Response from Cypriot Authorities
Following the investigation’s publication, Cypriot President, Nikos Christodoulides, vowed to investigate all allegations and pledged American assistance to do so. An FBI team accompanied by officials from the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) was deployed to Cyprus to collaborate with local authorities.
Addressing the Issue: Establishment of a Professional-Services Sector Oversight Body
The Cyprus government took additional steps to address the issue by establishing a professional-services sector oversight body. This body, led by the Cyprus Securities and Exchange Commission (CySEC), will review cases suspected of violating international sanctions. The involvement of the Cyprus Bar and Accountants Associations will also be sought.
New Body’s Criticism
However, the new body has faced some criticism, with the Cyprus Bar Association raising concerns over potential risks to attorney-client privilege and other complications.
Global Fight Against Financial Crimes
US and Cyprus’ new collaboration marks a significant step in the global fight against financial crimes. Both nations are committed to upholding transparency and accountability within their financial systems. Currently, U.S. authorities have declined to comment on the matter publicly.