Cyprus Sees Partnership with US to Combat Financial Crimes

Cyprus is set to codify a partnership with the United States to combat financial crimes emanating from its financial and professional services sectors. The joint effort aims to identify and prosecute illicit financial activities, including money laundering and sanctions evasion.

A New Era of Cooperation

The partnership will see Cypriot law enforcement agencies signing a memorandum of agreement with the US Justice Department and Federal Bureau of Investigation (FBI). This collaboration will enable Cypriot authorities to share expertise and best practices with their American counterparts in detecting, investigating, and prosecuting financial crimes linked to Cyprus.

The US Department of Justice plans to share its expertise with Cypriot counterparts in 2024. The partnership will also involve the US State Department’s Bureau of International Narcotics and Law Enforcement Affairs, as well as Cyprus’ Law Office of the Republic and Finance Intelligence Unit (MOKAS).

Background: A Recent Expose

The development comes on the heels of a recent expose by international investigative journalism collaboration Cyprus Confidential. The investigation revealed Cyprus’ significant role in laundering dirty money for Russian President Vladimir Putin’s regime and other authoritarian actors.

Key Findings

Nearly 800 companies and trusts registered in secrecy jurisdictions were found to be owned or controlled by Russians sanctioned since Russia’s invasion of Crimea in 2014.
The investigation uncovered Cyprus’ involvement in laundering dirty money for authoritarian regimes.

Government Response

Following the release of the investigative report, Cyprus President Nikos Christodoulides requested American assistance. In response, a deployment of FBI agents and officials from the US Treasury Department’s Financial Crimes Enforcement Network was sent to assist Cypriot authorities. The Cyprus government also approved the creation of an oversight body for the professional services sector to review cases that may violate international sanctions.

Criticism

However, the plan has faced criticism from some quarters, including the Cyprus Bar Association. The association claimed it had not been properly consulted prior to the government’s approval and expressed concerns over potential risks to attorney-client privilege.

Next Steps

The partnership is set to strengthen Cypriot-US cooperation in combating financial crimes. With the US sharing its expertise and best practices, Cypriot authorities will be better equipped to detect, investigate, and prosecute illicit financial activities. The outcome of this collaboration will be crucial in determining Cyprus’ commitment to combating financial crimes and upholding international standards.