Cyprus through the years, has become an attractive destination for foreign investors due to its geographical location in conjunction with its tax sector. The banking sector has been developed from the establishment of various professional activities of foreign investors in Cyprus. However, the industry is exposed to great risks relating to money laundering.
Cyprus has performed the National Money Laundering and Terrorism Financing Risk Assessment in 2018 which will be conducted every four years. Αccording to this evaluation was found that the sector that is mainly exposed to risks and threats of money laundering is the banking sector, mainly from the real estate sector and from the administrative service providers. This can be essentially credited to the bank’s association with, among other: the businesses that are not inhabitant in Cyprus with frequently complex corporate structures, the cross-border wire exchanges with counterparties in different purviews, the businesses that have been presented by third parties such as ASPSs, and finally the businesses that utilize candidate shareholders or directors and trusts.
The Central Bank of Cyprus is the specialist mindful for the supervision of the authorized credit teach in Cyprus and for the usage of the anti-money laundering arrangements. CBC has issued the fifth version of the Mandate on the Avoidance of prevention of Money Laundering and Psychological militant Financing, in February 2019 compatible to area 59(4) of the Anticipation of Concealment of Money Laundering Law of 2007 (188(I)2007), as revised, which transposed into Cyprus law the EU Order 2015/849 on the anticipation of the utilize of the money related framework for the purposes of money laundering or fear monger financing.
The Law particularly states that the Order is authoritative and obligatory to the teach tended to and the supervisory specialist for observing the Directive’s usage is the Central Bank of Cyprus. It is vital to note that encourage to the Law and the Mandate are anticipated, as the EU Mandate 2018/843, which alters the 4th EU Mandate, is however to be transposed into Cyprus Law. Cyprus has gotten a formal take note by the EU for non-compliance, as the due date for the transposition was in January 2020. The Banks are anticipated to recognize and evaluate the Money Laundering dangers they are uncovered to and take the vital measures. The center of Banks ought to be survey the nature of the dangers they are confronting and after that apply the significant and essential preventive measures, having respect to the nature and complexity of the bank’s items and administrations. The credit institutions are required to name an Anti-Money Laundering Officer who will be mindful, among other, for the planning of the institution’s arrangement on how new clients will be acknowledged and the conditions and the strategies beneath which a client relationship will be ended.