On 12 February, MONEYVAL released the mutual evaluation report on Cyprus, saying that its authorities should pursue money laundering from criminal proceeds generated outside of the country more aggressively.  Whilst listing 5 important positive developments, the report also noted 9 major shortcomings which hinder the effectiveness of the AML/CFT regime –

  • competent authorities are not yet sufficiently pursuing money laundering from criminal proceeds generated outside of Cyprus, which pose the highest threat; and
  • they have not been very proactive at freezing and confiscating foreign criminal proceeds at their own initiative, although they have been instrumental in assisting other countries;
  • it has not conducted a formal assessment of risks posed by legal persons, despite having a developed company formation and administration sector;
  • there are weaknesses in the implementation of preventive measures by the TCSP sector as a whole, with major implications for the availability of beneficial ownership information of legal persons/arrangements and the reporting of suspicions transaction reports;
  • further progress is required to implement a comprehensive supervisory framework for TCSP;
  • the risk in the real estate sector has increased exponentially since it has become the preferred choice of investment vehicle to acquire citizenship under the Cyprus Investment Programme, and the supervisory framework of, the sector display significant weaknesses;
  • the risks related to the Cyprus Investment Programme have not been assessed comprehensively;
  • administrative service providers did not demonstrate a uniform level of understanding of the risks of terrorism sanctions evasion; and
  • the application of a risk-based approach to the non-profit sector was still at a early stage at the time of the on-site visit.


Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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