WHAT ARE THE
Money laundering and terrorism financing laws in Cyprus?
In Cyprus, money laundering and terrorism financing are serious offences and are governed by several organisations and laws:
- Prevention of Money Laundering Law (2007): Cyprus has legislation in place to combat money laundering, primarily governed by the Prevention and Suppression of Money Laundering Activities Law of 2007 (Law No. 188(I)/2007). This law outlines the obligations of financial institutions, including banks, credit institutions, and other designated non-financial businesses and professions (DNFBPs), to establish anti-money laundering (AML) and know-your-customer (KYC) procedures.
- Cyprus Anti-Money Laundering Unit (MOKAS): MOKAS is the national authority responsible for implementing and enforcing anti-money laundering laws and regulations in Cyprus. It both oversees reporting obligations for suspicious transactions and also carries out investigations.
- Financial Intelligence Unit (FIU): The FIU in Cyprus is responsible for receiving and analysing suspicious transaction reports (STRs) submitted by financial institutions and DNFBPs. It plays a vital role in identifying and combating money laundering activities.
Terrorism Financing:
- Cyprus has also enacted measures to combat terrorism financing, in line with international standards. The legal framework for countering terrorism financing is integrated with the broader AML framework.
International Cooperation:
- Cyprus cooperates with international organisations and other countries to combat money laundering and terrorism financing. It is a member of the Financial Action Task Force (FATF) and follows its recommendations.
WHO ARE THE
ML/TF regulators in Cyprus and what functions do they perform?
In Cyprus, the regulators responsible for overseeing and enforcing anti-money laundering (AML) and counter-terrorism financing (CTF) regulations are primarily the following:
- Cyprus Securities and Exchange Commission (CySEC): CySEC is the regulatory authority responsible for supervising and regulating the financial services sector in Cyprus. This includes entities such as investment firms, financial institutions, and investment funds. CySEC ensures that these entities comply with AML and CTF regulations and maintains the integrity of the financial system.
- Central Bank of Cyprus (CBC): The Central Bank of Cyprus plays a crucial role in AML and CTF efforts by supervising and regulating banks and other financial institutions operating in Cyprus. It works to ensure that these entities have robust AML and CTF procedures in place.
- Cyprus Bar Association: The Cyprus Bar Association oversees lawyers and law firms operating in Cyprus. Lawyers are considered designated non-financial businesses and professions (DNFBPs) and are subject to AML and CTF regulations. The Cyprus Bar Association has a role in ensuring compliance within the legal profession.
- Cyprus Institute of Certified Public Accountants (ICPAC): ICPAC is responsible for regulating and supervising certified public accountants and audit firms in Cyprus. Certified public accountants are also classified as DNFBPs and are subject to AML and CTF regulations.
- Cyprus Real Estate Agents Association (CREAA): Real estate agents in Cyprus are subject to AML and CTF regulations and CREAA is responsible for overseeing their compliance with these regulations.
- Cyprus Gaming and Casino Supervision Commission: This commission regulates and supervises the gaming and casino industry in Cyprus. As part of its responsibilities, it ensures that casinos and gaming operators adhere to AML and CTF requirements.
- Unit for Combating Money Laundering (MOKAS): MOKAS is the national authority responsible for implementing and enforcing anti-money laundering laws and regulations in Cyprus. It serves as a central unit for receiving and analysing suspicious transaction reports (STRs) and coordinating efforts to combat money laundering and terrorism financing.
These bodies work in coordination with each other and with international organisations to ensure the effectiveness of AML and CTF measures in Cyprus. They play a vital role in safeguarding the integrity of the financial system and preventing illicit financial activities.
WHAT ARE THE
Industry sectors subject to ML/TF regulations?
In Cyprus, a wide range of industry sectors are subject to anti-money laundering (AML) and counter-terrorism financing (CTF) laws and regulations. These sectors are required to implement AML and CTF measures to prevent money laundering and terrorism financing activities. The key industry sectors subject to AML and CTF laws in Cyprus include:
Designated Non-Financial Businesses and Professions (DNFBPs)
DNFBPs are entities that are not financial institutions but can be exploited for money laundering and terrorism financing purposes.
Other sectors
WHAT ARE THE
Penalties for non-compliance with AML/CTF laws?
Cyprus has established penalties for non-compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) laws to deter financial institutions and individuals from engaging in activities that violate these regulations. Penalties for non-compliance in Cyprus may vary depending on the specific violations and the severity of the offence. Some of the typical penalties and consequences for non-compliance with AML and CTF laws in Cyprus may include:
- Administrative Penalties: Financial institutions and individuals who fail to meet their AML and CTF obligations may face administrative penalties imposed by the relevant regulatory authorities. These penalties can include fines, warnings, or sanctions.
- Criminal Penalties: In cases of serious non-compliance or involvement in money laundering or terrorism financing activities, individuals and entities may be subject to criminal prosecution. Criminal penalties for money laundering and terrorism financing can include imprisonment, substantial fines, or both.
- Revocation of Licences: Regulatory authorities in Cyprus have the power to revoke the licence of financial institutions or other businesses found to be seriously non-compliant with AML and CTF regulations. This can effectively shut down the operations of the entity in question.
- Seizure and Confiscation of Assets: If it is determined that assets are connected to money laundering or terrorism financing, authorities in Cyprus can seize and confiscate those assets.
- Disqualification and Prohibition Orders: Individuals who are found guilty of money laundering or terrorism financing offences may be disqualified from holding certain positions or conducting specific financial activities. Prohibition orders can prevent individuals from working in the financial sector.
- Civil Penalties: In addition to criminal penalties, civil penalties may be imposed on individuals and entities for non-compliance with AML and CTF regulations. These penalties can include fines and other financial sanctions.
- Reputation Damage: Non-compliance can also result in significant damage to the reputation of the individuals or institutions involved, which can have long-lasting consequences in the financial industry.
It's important to note that specific penalties and consequences can vary based on the nature and severity of the violation, as well as changes in the regulatory environment. The enforcement of AML and CTF laws is carried out by regulatory authorities such as the Financial Intelligence Unit (FIU) and the Cyprus Securities and Exchange Commission (CySEC), among others.
Since regulations and penalties can change over time, it's crucial to consult the latest legal sources and seek advice from legal professionals with expertise in Cyprus's AML and CTF regulations to understand the most current penalties for non-compliance. Additionally, financial institutions and individuals should maintain robust AML and CTF compliance programs to minimise the risk of non-compliance.