Cyprus

New Documents

The Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism published a second follow-up report concerning the efforts of Cyprus to improve its anti-money laundering and counterterrorist financing regime.

The Council of Europe’s Group of States against Corruption published an addendum to the latest compliance report on Cyprus, assessing steps taken by the jurisdiction to implement corruption prevention recommendations with respect to parliament, judges, and prosecutors.

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 2019, a total of 223,282 companies were registered in Cyprus, many owned by nonresidents. All companies registered in Cyprus must disclose their ultimate beneficial owners to the authorities. 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. The primary criminal sources of illicit proceeds are investment fraud, corruption, advance fee fraud, tax evasion, illegal drugs, and tobacco smuggling. Additionally, cybercrime cases continue to increase, especially phishing, e-mail hacking, and the use of ransomware. The State Department also outlined that Cyprus’s now defunct citizenship-by-investment program, which allowed foreign investors to apply for Cypriot citizenship in exchange for investments, including in any combination of real estate, infrastructure projects or Cypriot companies, served as a money laundering risk. Cypriot anti-money laundering legislation provides rules for both foreign and domestic politically exposed persons, and there is a bilateral mutual legal assistance treaty between the U.S. and Cyprus.  In 2018, Cypriot authorities convicted 26 persons for money laundering offenses.
-Source: 2021 International Narcotics Control Strategy Report (INCSR)

Rankings

FATF i | 2013 Methodology

Technical Effectiveness
Compliant : 16 High : 0
Largely Compliant : 20 Substantial : 3
Partially Compliant : 4 Moderate : 8
Non-Compliant : 0 Low : 0

Cyprus' technical compliance was re-rated in a Jan. 13, 2022 follow-up report.

BASEL i

Rank : 44/110
Score : 4.95/10

TRANSPARENCY INTERNATIONAL i

Rank : 42/179
Score : 57/100

Tax Justice Network i

Rank : 27/133
Score : 61/100