Cyprus makes substantial progress

Cyprus has taken positive steps towards anti-money laundering (AML) and countering the financing of terrorism (CFT), according to a much-anticipated report by the Council of Europe’s anti-money laundering body Moneyval published in February.

The 280-page report made a comprehensive assessment of the effectiveness of Cyprus’s AML/CFT system and its level of compliance with the Recommendations of the Financial Action Task Force (FATF).

It found that several measures had been deployed to mitigate some of the main risks effectively. There was a good level of domestic co-operation and co-ordination between the competent authorities, both on policy issues and at an operational level. The banking sector had become more effective in mitigating risks. This was largely due to the increasingly sound supervisory practices of the Central Bank of Cyprus.

The report also noted positively that the authorities investigated the financial aspects where there was a terrorism investigation/prosecution, that they had carried out a number of terrorist financing investigations in the review period and that they had taken steps to increase awareness of terrorist financing risks.

The Financial Intelligence Unit (FIU) had the ability to support the operational needs of competent authorities through its analysis and dissemination functions. Cyprus had developed mechanisms that were capable of delivering constructive and timely assistance to other countries both on a formal and informal basis.

However, it also called on the Cypriot authorities to pursue money laundering from criminal proceeds generated outside of Cyprus more aggressively, and take a more proactive approach to the freezing and confiscation of foreign proceeds.

“Even though it is clear that there is still room for improvement, Cyprus has undeniably showed major progress and proved that it is on the right track,” said George Ayiomamitis, managing director of Sovereign Trust (Cyprus) Ltd.

The evaluation of Cyprus’ anti-money laundering and combating financing of terrorism system was based on the 2012 FATF Recommendations and was prepared using the 2013 Methodology. Based on the results of its evaluation, MONEYVAL decided to apply its enhanced follow-up procedure and invited Cyprus to report back at its first plenary in 2021.

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