The Central Bank of Cyprus (‘the CBC’), took note of the recent reports in international and local Media and highlights the following:
- The CBC, in its supervisory capacity, requires all credit institutions to apply the AML/CFT Law, which transposes the EU AML/CFT Directives, with the aim to mitigate any potential AML/CFT risks. In order to assess the level of compliance of credit institutions with the AML/CFT legal and regulatory framework, the CBC conducts in-depth onsite inspections, ad hoc inspections, as well as ongoing off-site monitoring.
- In this context and in addition to the inspections mentioned above, the CBC is currently also examining the alleged wrongdoings included in the recent reports, to the extent they relate to credit institutions.
- As part of its ongoing efforts to further strengthen its AML/CFT supervisory capacity, in 2019 the CBC initiated a recruiting process that ended up with a 50% increase in the headcount of its AML/CFT department by 2022.
- As a result of the CBC’s targeted supervisory actions, from the end of 2018 until now credit institutions terminated the relationships with 42.728 shell companies and closed 125.782 bank accounts.
- Since 2015, the CBC has imposed fines relating to AML/CFT inspections in 13 cases.
- The CBC is responsible for the compliance of the supervised entities with the targeted financial sanctions, decided and imposed by the United Nations’ Security Council and the EU. As part of its ongoing efforts in further strengthening the level of compliance by supervised institutions with the sanctions regime, CBC has partnered in 2023 with a reputable firm which offers AML/CFT solutions in the testing and validation of sanction screening and transactions monitoring systems and is in the process of finalising an assessment of the sanctions screening systems of its supervised entities.
- Cyprus is assessed by Moneyval, which follows the FATF methodology. Within the 5th round of MONEYVAL evaluations, Cyprus assessment was completed and the Mutual Evaluation Report (MER) was published in 2020. The assessment, conducted on the basis of the robust FATF methodology by a team of international experts, reflected the measures adopted by Cyprus in the fight against money laundering and terrorism financing in recent years and identified areas where further enhancements and improvements were needed. In particular, as far as the financial institutions are concerned, the assessors have expressed both orally and in writing the significance of the work performed by the CBC.