US and Cyprus Form Partnership to Combat Financial Crimes
Cyprus and the United States have announced a new collaboration to tackle money laundering, sanctions evasion, and other financial crimes originating from Cyprus’ financial and professional services sectors.
Signing of a Memorandum of Agreement
According to a recent joint statement, Cypriot law enforcement agencies are set to sign a memorandum of agreement with the U.S. Justice Department and Federal Bureau of Investigation. This agreement aims to identify and prosecute illicit financial activities.
Cyprus’ Role in Money Laundering
This pact comes after Cyprus’ involvement in moving dirty money for various autocratic regimes, brutal dictators, and anti-democratic actors, as revealed in the investigative journalism project, Cyprus Confidential. The report found:
- Almost 800 companies and trusts registered in secrecy jurisdictions connected to Russians under sanctions since 2014.
- Over 650 of those entities were based in Cyprus.
- These entities masked investments in properties, yachts, and valuable artworks.
Cypriot President’s Request for Aid
In response, Cypriot President Nikos Christodoulides requested aid from the United States to address these allegations, leading to the recent cooperative agreement between the two countries.
Terms of the Partnership
Under the terms of the partnership, the U.S. Department of Justice will share expertise and resources with Cypriot counterparts to help them proactively investigate and prosecute financial crimes involving Cyprus.
Other organizations involved in the initiative include:
- U.S. State Department’s Bureau of International Narcotics and Law Enforcement Affairs
- Cyprus Law Office of the Republic
- Cyprus’ Finance Intelligence Unit (MOKAS)
Previous Actions by Cyprus
Prior to this collaboration, Cyprus took several actions to counter financial crimes:
- Cypriot government approval for the formation of a professional-services sector oversight body to review cases with potential sanctions violations.
- Led by the Cyprus Securities and Exchange Commission
- Seeks to collaborate with the Cyprus Bar and Accountants Associations in conducting its reviews
Criticism and Concerns
The oversight body’s formation has received some criticism, with the Cyprus Bar Association expressing concerns about potential threats to attorney-client privilege and other implications. The FBI and Department of Justice have yet to comment on the matter.
Importance of the Collaboration
As Cyprus continues its efforts to rid its financial sector of illicit activity and maintain its international standing, this collaboration with the United States may prove vital in combating the financial crimes that have long plagued the island nation.