Financial Crime World

US and Cyprus Form Partnership to Combat Financial Crimes

The United States and Cyprus have announced a new partnership to intensify cooperation and tackle financial crimes, including money laundering and sanctions evasion, in Cyprus’s financial sector.

Collaboration to Identify and Prosecute Financial Crimes

According to a statement issued by the U.S. Department of Justice (DOJ), Cyprus’s law enforcement agencies will sign a memorandum of agreement with the DOJ and Federal Bureau of Investigation (FBI) to collaborate on identifying and prosecuting illicit financial activities.

  • DOJ representatives will share their expertise with Cypriot counterparts.
  • Cypriot authorities will provide assistance to the DOJ.
  • The U.S. State Department’s Bureau of International Narcotics and Law Enforcement Affairs also joins the partnership.

Cyprus as a Significant Player in Money Laundering and Sanctions Evasion

The collaboration comes after Cyprus emerged as a significant player in moving money for questionable actors, following a cross-border investigation led by the International Consortium of Investigative Journalists (ICIJ) in November 2021.

  • ICIJ found that nearly 800 companies and trusts were linked to individuals who had been sanctioned since Russia’s invasion of Crimea in 2014.
  • Over 650 of these entities were based in Cyprus.

Response from Cyprus Authorities

Cypriot President Nikos Christodoulides voiced concern over these findings and called for American assistance.

  • The FBI and U.S. Treasury Department’s Financial Crimes Enforcement Network dispatched a team of agents to assist Cyprus authorities.
  • The Cyprus government approved the creation of a professional-services sector oversight body.

Controversy Surrounding the Oversight Body

The new collaborative endeavor has sparked concern from the Cyprus Bar Association, which claimed it had not been consulted before the approval of the oversight body.

  • The Association raised issues over potential threats to attorney-client privilege and other concerns.
  • The FBI and the US Department of Justice declined ICIJ’s request for comment on the matter.

Strengthening Efforts to Combat Financial Crimes

Both the FBI and the US Department of Justice remain committed to strengthening their efforts to combat financial crimes and ensure a more transparent business environment for all involved.