Financial Crime World

Title: US and Cyprus Join Forces to Combat Financial Crimes

Memorandum of Understanding Signed to Counter Money Laundering and Sanctions Evasion

The United States and Cyprus have bolstered their partnership against financial crimes by signing a memorandum of understanding (MOU) on Tuesday. The primary objective of this collaboration is to counter money laundering, sanctions evasion, and other illicit financial activities linked to Cyprus’ financial and professional services sectors.

Key Points of the MOU

  • Cyprus’ law enforcement agencies will work with the U.S. Justice Department and FBI to identify and prosecute financial crimes with ties to Cyprus.
  • In 2024, the U.S. Department of Justice (DOJ) will share its expertise and resources with Cypriot counterparts.
  • The U.S. State Department’s Bureau of International Narcotics and Law Enforcement Affairs, the Cyprus Law Office of the Republic, and MOKAS (Finance Intelligence Unit) are involved in this initiative.

Background: Allegations of Money Laundering and Sanctions Evasion

The announcement comes after allegations of Cyprus’ role in money laundering and sanctions evasion surfaced in a global investigation led by the International Consortium of Investigative Journalists (ICIJ). The investigation found nearly 800 companies and trusts owned or controlled by Russian individuals with links to money laundering and sanctions evasion, with over 650 of these entities registered in Cyprus.

Cypriot Government’s Response

Following the release of the investigation, Cypriot President Nikos Christodoulides requested American assistance to address concerns over the island nation’s financial sector. In response:

  • FBI and U.S. Treasury Department officials were deployed to Cyprus.
  • The Cyprus government approved the creation of a professional-services sector oversight body, led by the Cyprus Securities and Exchange Commission, to handle cases that violate international sanctions.

Concerns over the Oversight Body

The formation of this oversight body has sparked concerns from the Cyprus Bar Association regarding potential risks to attorney-client privilege and other complications. Neither the FBI nor the Department of Justice commented on ICIJ’s request for comment.