Cyprus

New Documents

Transparency International (TI) is calling on the European Commission to “propose a roadmap” that will put an end to Golden Visa programs, which have high corruption and money laundering risks, according to TI.

The Council of Europe’s Group of Experts on Action against Trafficking in Human Beings published its third report on Cyprus, analyzing the jurisdiction’s policies on human trafficking.

News

Enforcement Actions

The Cyprus Securities and Exchange Commission issued a board decision reaching an agreement with IQ Option Europe Ltd, under which the company agreed to pay €450,000 to settle possible violations of the Prevention and Suppression of Money Laundering Activities Law.

The Central Bank of Cyprus issued a monetary penalty against the Limassol, Cyprus-based bank for violations of the Prevention and Suppression of Money Laundering Activities Laws of 2007 to 2016 and the Prevention of Money Laundering and Terrorist Financing Directive, December 2013.


Important Facts

  • The U.S. State Department labels Cyprus as a major money laundering country. As of the end of 2018, a total of 216,239 companies were registered in Cyprus, many owned by nonresidents. All companies registered in Cyprus must disclose their ultimate beneficial owners to the authorities, but some Cypriot law and accounting firms help construct layered corporate entities to mask the identities of financial beneficiaries. Experts agree that the Cypriot financial system is vulnerable to money laundering by domestic and foreign criminal enterprises, although proceeds generated abroad pose a greater threat. Risks also emanate from layering activities, mainly from international business through banking transactions. The main criminal sources of illicit proceeds are investment fraud, corruption, advance fee fraud, tax evasion, illegal drugs, tobacco smuggling. Additionally, cybercrime cases continue to increase, especially phishing, e-mail hacking, and the use of ransomware. The State Department also outlined Cyprus’ citizenship-by-investment program, which allows foreign investors to apply for Cypriot citizenship after investing more than $2.2 million in Cyprus, including investments in any combination of real estate, infrastructure projects or Cypriot companies. Following pressure from the EU and United States, the Cyprus tightened eligibility criteria and oversight in 2018 and 2019 by introducing a cap in the number of citizenships granted annually at 700, among other measures. Cypriot legislation covers rules for both foreign and domestic politically exposed persons. In 2018, Cypriot authorities convicted 26 persons for money laundering offenses. The Central Bank of Cyprus also issued a circular in 2018, advising banks to be extra vigilant against shell companies and letter-box companies, and to avoid doing business with them.
-Source: 2020 International Narcotics Control Strategy Report (INCSR)

Rankings

FATF i | 2013 Methodology

Technical Effectiveness
Compliant : 16 High : 0
Largely Compliant : 21 Substantial : 3
Partially Compliant : 3 Moderate : 8
Non-Compliant : 0 Low : 0

BASEL i

Rank : 88/141
Score : 4.81/10

TRANSPARENCY INTERNATIONAL i

Rank : 41/180
Score : 58/100

Tax Justice Network i

Rank : 27/133
Score : 61/100