Financial Crime World

Title: US and Cyprus Partner to Combat Money Laundering and Sanctions Evasion in Financial Sector

Collaboration to Bolster Efforts Against Financial Crimes

Cyprus and the United States have announced a new partnership to strengthen efforts against financial crimes, including money laundering and sanctions evasion, originating from Cyprus’ financial and professional services sectors.

MOU to Enhance Law Enforcement Collaboration

On Tuesday, the United States Department of Justice (DOJ) and Federal Bureau of Investigation (FBI) revealed plans for Cyprus’ law enforcement agencies to sign a memorandum of agreement (MOA) to collaborate on identifying and prosecuting illicit financial activities.

  1. Expertise Sharing

    • DOJ’s Bureau of International Organized Crime will share expertise with Cypriot counterparts in 2024.
    • Proactive detection, investigation, and prosecution of financial crimes with links to Cyprus.

  2. U.S. Participation

    • The U.S. State Department’s Bureau of International Narcotics and Law Enforcement Affairs, along with the Cyprus Law Office of the Republic and the country’s Finance Intelligence Unit (MOKAS), will be involved in the initiative.

Cyprus’ Role in Money Laundering Scandals

The collaboration stems from the findings of an international investigative journalism project called Cyprus Confidential, which exposed the extensive role Cyprus plays in moving dirty money for autocratic regimes and anti-democratic actors, most notably, Russian President Vladimir Putin’s regime.

Investigative Findings

  • Over 3.6 million leaked documents analyzed.
  • Nearly 800 companies and trusts registered in secrecy jurisdictions with connections to Russians subjected to sanctions since 2014.
  • Approximately 650 of these entities were traced back to Cyprus.

Response and Criticism

Assistance from the U.S.

Following the publication of the reports, Cyprus President Nikos Christodoulides called for American assistance, leading to the recent joint statement.

U.S. Authorities’ Support

  • FBI and U.S. Treasury Department officials have deployed to Cyprus to support local authorities in their investigations.
  • Cyprus government approved the creation of an oversight body, led by the Cyprus Securities and Exchange Commission, to review professional-services sector cases that could potentially breach international sanctions.

Criticism from Cyprus Bar Association

  • The Cyprus Bar Association expressed concerns regarding potential risks to attorney-client privilege and other potential complications.

Agencies’ Response

  • Both the FBI and DOJ declined to comment on the matter when contacted by ICIJ.

Conclusion

The US-Cyprus partnership aims to combat money laundering, sanctions evasion, and other financial crimes connected to Cyprus’ financial and professional services sectors. The collaboration comes in response to an international investigation that uncovered a significant role of Cyprus in facilitating financial activities for various autocratic regimes and anti-democratic actors. The agreement includes expertise sharing, investigative support from US authorities, and the creation of an oversight body to review potential violations of international sanctions.