Financial Crime World

New US-Cyprus Partnership to Combat Financial Crimes

The United States and Cyprus have announced a strengthened collaboration to tackle money laundering, sanctions evasion, and other illicit financial activities in Cyprus.

Background

Following a series of investigative reports revealing troubling links to Russian oligarchs and other authoritarian regimes, Cyprus has requested American assistance to enhance its efforts against financial crime.

  • The International Consortium of Investigative Journalists (ICIJ) exposed Cyprus’ significant role in illicit finance in a groundbreaking investigation.
  • Over 800 entities owned or controlled by individuals subjected to worldwide sanctions since Russia’s annexation of Crimea in 2014 were registered in secrecy jurisdictions.
  • Around 650 of these entities were situated in Cyprus.

Collaboration with US Authorities

Cypriot law enforcement agencies are set to sign a memorandum of agreement with the U.S. Department of Justice (DOJ) and Federal Bureau of Investigation (FBI) for expert assistance and training.

  • The DOJ will share its expertise and resources with Cypriot counterparts to proactively detect, investigate, and prosecute financial crimes with international connections.
  • Assistance includes the provision of expert prosecutorial assistance and training.

Key Players

  • Cyprus Law Office of the Republic
  • Cyprus Securities and Exchange Commission (CYSEC)
  • Finance Intelligence Unit (MOKAS)
  • U.S. Department of Justice (DOJ)
  • Federal Bureau of Investigation (FBI)
  • U.S. State Department’s Bureau of International Narcotics and Law Enforcement Affairs

Response to ICIJ Report

Cypriot President Nikos Christodoulides called for American assistance after the release of the ICIJ report in late 2021.

  • Cyprus government approved the creation of an oversight body, led by CYSEC, to review cases potentially violating international sanctions.

Concerns and Criticism

However, the creation of the oversight body, which involves the Cyprus Bar and Accountants Associations, has faced criticism.

  • The Cyprus Bar Association has expressed concerns regarding the preservation of attorney-client privilege and other potential issues.

Contact

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