Title: US and Cyprus Strengthening Ties to Combat Money Laundering and Financial Crimes
Deepening Cooperation between Cypriot and US Authorities
To combat money laundering, sanctions evasion, and other financial crimes originating from Cyprus’s financial and professional services sectors, Cypriot authorities are set to deepen their cooperation with the United States.
Memorandum of Understanding (MoU)
In a significant step towards strengthening their partnership, Cypriot law enforcement agencies will sign an MoU with the U.S. Justice Department and Federal Bureau of Investigation (FBI) to work together in identifying and prosecuting illicit financial activities.
- U.S. Department of Justice (DOJ): Sharing expertise and experience with Cypriot counterparts
- Expert prosecutorial assistance
Collaborating Agencies
The expanded cooperation includes the following agencies:
- U.S. State Department’s Bureau of International Narcotics and Law Enforcement Affairs
- Cyprus Law Office of the Republic
- Finance Intelligence Unit known as MOKAS
Cyprus Confidential Investigation
The need for such cooperation arises following a cross-border journalism collaboration, named Cyprus Confidential. The project was led by the International Consortium of Investigative Journalists (ICIJ), Paper Trail Media, and 67 media partners. The investigation revealed Cyprus as a significant player in moving ill-gotten wealth for authoritarian regimes.
Analysis of Leaked Documents
ICIJ’s analysis of over 3.6 million leaked documents revealed nearly 800 companies and trusts registered in secrecy jurisdictions that were owned or controlled by Russians under international sanctions since 2014. Of those, roughly 650 were registered in Cyprus.
Response to the Investigation
Following the investigation’s public release, Cypriot President Nikos Christodoulides called for American assistance. Within months, a team of FBI agents and officials from the U.S. Department of the Treasury’s Financial Crimes Enforcement Network arrived in Cyprus to assist local authorities.
New Oversight Body
In February 2022, the Cyprus government approved the formation of a professional-services sector oversight body to review cases suspected of violating international sanctions. This new body is led by the Cyprus Securities and Exchange Commission and involves the Cyprus Bar and Accountants Associations.
Criticism and Challenges
Although welcomed by many, this plan has faced criticism. The Cyprus Bar Association expressed concerns over potential risks to attorney-client privilege and other potential issues following the MoU’s approval.
Commitment to Cracking Down on Financial Crimes
Despite these challenges, the heightened cooperation underscores the United States and Cyprus’s commitment to cracking down on financial crimes emanating from the Mediterranean island nation.
FBI and DOJ Decline to Comment
The FBI and DOJ declined to comment on the matter.