US and Cyprus Form Partnership to Combat Financial Crimes
In an endeavor to fortify their collaboration against financial crimes, the United States and Cyprus have announced a new partnership. The joint statement, released on Tuesday, outlines this partnership’s objective to address money laundering, sanctions evasion, and other illicit financial activities originating from Cyprus’ financial and professional services sectors.
Collaborative Efforts against Financial Crimes
According to the announcement, Cypriot law enforcement agencies will work closely with several key American entities:
- The U.S. Justice Department
- The Federal Bureau of Investigation (FBI)
- The U.S. State Department’s Bureau of International Narcotics and Law Enforcement Affairs
- The Cyprus Law Office of the Republic
- The country’s Finance Intelligence Unit (MOKAS)
These collaborations are expected to bear fruit from 2024, with the U.S. Department of Justice sharing its expertise with Cypriot counterparts in proactively detecting, investigating, and prosecuting financial crimes linked to Cyprus. This assistance will also extend to providing expert prosecutorial assistance to these cases.
Cyclical Journalism Investigation: Cyprus Confidential
Cypriot President Nikos Christodoulides called for American assistance after Cyprus was exposed in the “Cyprus Confidential” journalism collaboration, led by the International Consortium of Investigative Journalists (ICIJ), Paper Trail Media, and 67 media partners. The ICIJ analysis of 3.6 million leaked documents revealed the following:
- Over 800 companies and trusts controlled by Russians who have been sanctioned since Russia’s invasion of Crimea in 2014
- The majority (nearly 700) of these companies and trusts were based in Cyprus
Investigative Reactions
Following the allegations, President Christodoulides pledged to investigate any wrongdoing within a specified timeframe. The FBI and a team of Treasury Department officials from the Financial Crimes Enforcement Network (FinCEN) were dispatched to Cyprus in November 2021 to assist local authorities.
In February 2022, the Cyprus government approved the creation of a professional-services sector oversight body to review potential sanctions violations. Led by the Cyprus Securities and Exchange Commission, this oversight authority aims to collaborate with the Cyprus Bar and Accountants Associations in reviewing cases.
However, the Cyprus Bar Association has expressed concerns regarding the oversight body’s formation, stating it was not properly consulted during the process. Neither the FBI nor the Department of Justice has commented on ICIJ’s request for statements.