Financial Crime World

Financial Crime Prevention Techniques in Cyprus: US-Cyprus Partnership Seeks to Combat Money Laundering and Sanctions Evasion

Cyprus is strengthening its partnership with the United States to tackle financial crimes emanating from its financial and professional services sectors. A new agreement will enable Cypriot law enforcement agencies to collaborate with the US Justice Department and Federal Bureau of Investigation (FBI) to identify and prosecute illicit financial activities.

Memorandum of Understanding

The memorandum of understanding, signed on Tuesday, aims to share expertise and resources between the two nations to detect, investigate, and prosecute cases involving financial crimes linked to Cyprus. The US Justice Department has pledged to provide expert prosecutorial assistance in 2024, building on its experience in combating financial fraud.

Partners Involved

The partnership involves:

  • The US State Department’s Bureau of International Narcotics and Law Enforcement Affairs
  • Cyprus’ Law Office of the Republic
  • Finance Intelligence Unit (MOKAS)
  • The US Justice Department
  • The FBI

This move comes following a high-profile investigation by international journalists that exposed Cyprus’ role in facilitating dirty money for Russian President Vladimir Putin’s regime.

Investigative Findings

The probe, led by the International Consortium of Investigative Journalists, revealed that:

  • Nearly 800 companies and trusts registered in secrecy jurisdictions were owned or controlled by sanctioned Russians.
  • More than 650 of these entities were based in Cyprus.

In response to the allegations, Cypriot President Nikos Christodoulides vowed to investigate all wrongdoing within a specified timeframe. The government has since taken steps to strengthen its anti-money laundering measures, including the creation of an oversight body to review cases involving international sanctions.

Criticisms

However, the plan has faced criticism from some quarters. The Cyprus Bar Association expressed concerns that the oversight authority may pose risks to attorney-client privilege and other issues.

Expected Outcomes

Despite these reservations, the partnership between the US and Cyprus is expected to enhance financial crime prevention techniques in the region, helping to combat money laundering and sanctions evasion. This agreement demonstrates a commitment to strengthening cooperation between the two nations to prevent financial crimes and promote transparency.