Financial Crime World

Cyprus and US Team Up to Combat Financial Crimes

In an effort to combat money laundering, sanctions evasion, and other financial crimes originating from Cyprus’ financial and professional services sectors, the island nation is set to collaborate with the United States.

Partnership Details

The partnership was announced in a joint statement released on Tuesday, revealing that:

  • Cypriot law enforcement agencies will work closely with the US Justice Department and Federal Bureau of Investigation (FBI) to identify and prosecute illicit financial activities.
  • The US Department of Justice will share its expertise with Cypriot counterparts to detect, investigate, and prosecute cases involving financial crimes linked to Cyprus.
  • The US State Department’s Bureau of International Narcotics and Law Enforcement Affairs, along with Cyprus’ Law Office of the Republic and Finance Intelligence Unit (MOKAS), will also be part of the effort.

Background

The move comes in response to a recent investigation by the International Consortium of Investigative Journalists, Paper Trail Media, and 67 media partners, which revealed Cyprus’ significant role in laundering dirty money for Russian President Vladimir Putin’s regime and other authoritarian actors. The investigation found that:

  • Nearly 800 companies and trusts registered in secrecy jurisdictions were owned or controlled by Russians who have been sanctioned since Russia’s invasion of Crimea in 2014.
  • Cyprus had a significant role in laundering dirty money, making it a key hub for international financial crimes.

Government Response

Following the release of the investigation, Cypriot President Nikos Christodoulides requested American assistance. In response, a team of FBI agents and officials from the US Treasury Department’s Financial Crimes Enforcement Network were deployed to Cyprus to assist local authorities. The Cyprus government also approved the creation of an oversight body to review cases that may violate international sanctions.

Criticism

However, the plan has drawn criticism from the Cyprus Bar Association, which expressed concerns that it may pose risks to attorney-client privilege and other problems. The association had not been consulted prior to the government’s approval of the oversight body. The FBI and Department of Justice declined to comment on the matter.

Implementation and Impact

The partnership is expected to go into effect in 2024, with the US Department of Justice providing expert prosecutorial assistance to Cypriot authorities. This move marks a significant step towards combating financial crimes emanating from Cyprus and demonstrates the country’s commitment to transparency and cooperation with international partners.

Conclusion

In conclusion, the partnership between Cyprus and the United States is a crucial step in combating financial crimes and promoting transparency and cooperation between countries. While there are concerns about the potential risks, the benefits of this collaboration far outweigh the drawbacks.