Cyprus progress against money laundering..."Shortcomings have still to be addressed"

"Shortcomings have still to be addressed" in Cyprus, according to the Council of Europe's Anti-Money Laundering Body MONEYVAL despite "some progress" made in enhancing its compliance with FATF criteria.

"Shortcomings have still to be addressed" in Cyprus, according to the Council of Europe's Anti-Money Laundering Body MONEYVAL despite "some progress" made in enhancing its compliance with FATF criteria.


Despite this progress, MONEYVAL stated that Cypriot authorities "took some of the measures boosting the degree of compliance too late" for evaluation.


Cyprus was deemed to be in compliance or mainly in compliance with 37 of the 40 FATF recommendations following its 2019 mutual evaluation report. Based on an assessment of the country's compliance with amended FATF Recommendations for Virtual Asset Service Providers (VASPs), MONEYVAL has now demoted Cyprus from "mostly compliant" to "somewhat compliant."


“Without an updated National Risk Assessment (NRA) and/or a VASP sector specific risk assessment, Cyprus is gravely hampered in its ability to deploy risk mitigation measures commensurate with the dangers it may face,” says MONEYVAL. In spite of this, the country has taken steps to address these issues, including the issuance of a risk assessment on money laundering risks associated to virtual assets. However, MONEYVAL decided that "some of these steps were introduced too late to be considered in the follow-up report".


One of the measures taken was the "striking off 2200 Non-Profit Organizations (NPOs)", to remedy prior problems in the 2019 report.

" Even though the authorities have made a commendable effort to determine the subset of NPO that are vulnerable to TF misuse," MONEYVAL said.

This means that the jurisdiction has only partially addressed "most problems noted in the mutual evaluation report".

A total of 16 of the 40 FATF Recommendations have been assessed to be "compliant," "mostly compliant," or "somewhat compliant."


Some of these proposals have been partially implemented, such as those relating to non-profit organizations, correspondent banking, new technology, and the authority and powers of law enforcement and investigative authorities.


Cyprus has been placed in an enhanced follow-up and is scheduled to report back in a year. " MONEYVAL expects that countries will have addressed most, if not all, shortcomings by the end of the third year from adoption of their mutual evaluation report," concluded the body.

By fLEXI tEAM