The Central Bank of Cyprus (CBC) reported that it is investigating possible violations as reported in ‘Cyprus Confidential’ regarding financial institutions.

In its statement, the CBC highlighted that as a result of its targeted supervisory actions from late 2018 to the present, financial institutions terminated business relationships with a total of 42,728 shell companies and closed 125,782 bank accounts.

Since 2015, as part of efforts to prevent the use of the financial system for money laundering or terrorist financing, the CBC has imposed fines in 13 cases.

Central Bank of Cyprus (CBC) Announcement:

“The Central Bank of Cyprus (CBC), aware of recent publications in both international and local media, states the following:

As part of its supervisory role, the CBC requires all financial institutions to adhere to the Law on Prevention and Suppression of Money Laundering from Illegal Activities, which is harmonized with relevant European Directives, aiming to mitigate potential risks. To assess the level of compliance of financial institutions with the legal framework to prevent money laundering from illegal activities, the CBC conducts thorough on-site inspections, ad hoc checks, and continuous remote monitoring.

In addition to the mentioned checks, the CBC is now investigating potential violations highlighted in the reports, particularly concerning financial institutions.

In efforts to further enhance its supervisory capability to prevent the use of the financial system for money laundering or terrorist financing, in 2019, the CBC initiated a hiring process. As a result, the workforce in the relevant department increased by 50% by 2022.

As a result of the CBC’s targeted supervisory actions, from late 2018 to date, financial institutions terminated business relationships with a total of 42,728 shell companies and closed 125,782 bank accounts.

Since 2015, due to its supervisory checks aimed at preventing the use of the financial system for money laundering or terrorist financing, the CBC has imposed fines in 13 cases.

The CBC is responsible for ensuring the compliance of supervised institutions with the targeted economic sanctions decided upon and imposed by the United Nations Security Council and the European Union. As part of its ongoing efforts to further enhance the level of compliance of supervised institutions with the sanctions regime, in 2023, the CBC collaborated with a reputable solutions provider to conduct audits to assess the systems implemented by supervised institutions for sanction enforcement and transaction monitoring. The assessment process of the sanction control systems of supervised institutions is in its final stage.

Cyprus is being evaluated by Moneyval, applying the FATF methodology. In the context of the 5th round evaluation by MONEYVAL, the assessment report for Cyprus was published in 2020. The assessment, conducted by a group of international experts using the reliable FATF methodology, reflected the measures taken by Cyprus in combating money laundering from illegal activities and terrorist financing in recent years, noting areas requiring further improvements. Specifically regarding financial institutions, the evaluators verbally and in writing emphasized the particular significance of the work carried out by the CBC.”