Cyprus has been listed as a high-risk country for money laundering by international organizations due to its reputation as a tax haven and offshore banking center.
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Cyprus has indeed been classified as a high-risk country for money laundering by the likes of the European Commission, Moneyval, and the Financial Action Task Force (FATF). This is largely due to its reputation as a tax haven and offshore banking center, which has attracted a number of foreign investors and entities seeking to take advantage of its generous tax incentives and relatively lax regulations.
One interesting fact is that Cyprus was the focus of a major money laundering scandal back in 2013, when it was revealed that one of its biggest banks, the Cyprus Popular Bank (also known as Laiki Bank), had been involved in a scheme to help wealthy Russians launder billions of dollars. The scandal ultimately resulted in the bank being wound down and the country’s involvement in a massive bailout program.
Another interesting fact is that Cyprus has made significant efforts to address its reputation as a high-risk jurisdiction. In recent years, it has implemented a number of measures to strengthen its anti-money laundering (AML) regime, including setting up a dedicated unit to investigate money laundering cases, beefing up its KYC requirements for banks and other financial institutions, and increasing its cooperation with foreign law enforcement agencies.
As for a relevant quote, it may be worth highlighting the words of FATF President Marcus Pleyer, who stated in a recent press release: “Cyprus has made progress in improving its AML/CFT regime… There are, however, still important issues that need to be addressed to ensure an effective system that is able to tackle money laundering and terrorist financing risks.”
Table:
| Country | Risk Level |
|---|---|
| Cyprus | High |
| Canada | Low |
| Russia | High |
| Switzerland | Low |
| United States | Medium |
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The Cyprus Investment Program scandal involves the controversial process of granting citizenship in Greek-administered Cyprus to people worldwide who invest at least $2.5 million. The program came under scrutiny after approved applications were made public, revealing that some convicted criminals or those under investigation had been granted citizenship. Although criteria for applicants were updated in 2019, allowing those who have faced criminal charges to be excluded, those who have already obtained citizenship will not have theirs revoked.
Here are some other responses to your query
The Cypriot financial system is vulnerable to money laundering by domestic and foreign criminal enterprises. The primary criminal sources of illicit proceeds are investment fraud, corruption, advance fee fraud, tax evasion, illegal drugs, and tobacco smuggling. Cyprus is not currently on the FATF List of Countries that have been identified as having strategic AML deficiencies. The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Cyprus was undertaken in 2022.
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.
Cyprus is not currently on the FATF List of Countries that have been identified as having strategic AML deficiencie Compliance with FATF Recommendations The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Cyprus was undertaken in 2022.
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Does Cyprus have an anti-money laundering/counter-terrorist financing system?
Response will be: Background and other Contextual Factors 26. Cyprus has an increasingly mature and sophisticated anti-money laundering/counter-terrorist financing (AML/CFT) system, albeit there is room for improvement in sensitive areas.
Which countries are included in the money laundering & terrorist financing list 2022?
The list was amended on 7 November 2022 by the Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) (No. 3) Regulations 2022. The Democratic Republic of the Congo, Gibraltar, Mozambique and Tanzania have been added to the list and Malta, Nicaragua and Pakistan have been removed.
Is Self-laundering ML a crime in Cyprus?
Response to this: The overall picture provided in the figures is consistent with Cyprusï prosecution record i.e. the vast majority of ML prosecutions and convictions relate to self-laundering ML parallel to a (domestic) predicate offence.
Is there a money laundering problem in jurisdictions of concern?
The reply will be: While the actual money laundering problem in jurisdictions classified as “Jurisdictions of Concern” is not as acute as in those considered to be of “Primary Concern,” they too must undertake efforts to develop or enhance their AML regimes.
Does Cyprus have an anti-money laundering/counter-terrorist financing system?
Answer will be: Background and other Contextual Factors 26. Cyprus has an increasingly mature and sophisticated anti-money laundering/counter-terrorist financing (AML/CFT) system, albeit there is room for improvement in sensitive areas.
Which countries are included in the money laundering & terrorist financing list 2022?
Response will be: The list was amended on 7 November 2022 by the Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) (No. 3) Regulations 2022. The Democratic Republic of the Congo, Gibraltar, Mozambique and Tanzania have been added to the list and Malta, Nicaragua and Pakistan have been removed.
Is Self-laundering ML a crime in Cyprus?
The overall picture provided in the figures is consistent with Cyprusï prosecution record i.e. the vast majority of ML prosecutions and convictions relate to self-laundering ML parallel to a (domestic) predicate offence.
Is there a money laundering problem in jurisdictions of concern?
While the actual money laundering problem in jurisdictions classified as “Jurisdictions of Concern” is not as acute as in those considered to be of “Primary Concern,” they too must undertake efforts to develop or enhance their AML regimes.