Some progress, but also mild shortcomings, in Cyprus' compliance with the Financial Action Task Force FATF standards on anti-money laundering and combating the financing of terrorism, the Council of Europe's Committee of Experts on the Evaluation of Anti-Money Laundering and Terrorist Financing Measures (Moneyval) has found.
Following the conclusion of the second progress assessment, released today, Moneyval experts concluded that while some progress has been made in addressing the technical compliance weaknesses identified in the first assessment, however Cyprus has not been reassessed on any of the four recommendations for which it is rated in partial compliance.
In particular, it is noted that some progress has been made in improving compliance with recommendations 8, 15 and 31 "but some gaps remain."
"Cyprus is encouraged to continue its efforts to address the remaining weaknesses," Moneyval's report said.
As a result, Cyprus is rated fully compliant with 16 of the 40 FATF recommendations, highly compliant with 20 recommendations and partially compliant with four recommendations. The latter relate to non-profit organisations, correspondent banks, new technologies and the powers of law enforcement and investigative authorities. It is noted that there is no recommendation for which Cyprus is rated as non-compliant.
"The Cypriot authorities have taken further measures aimed at improving the level of compliance with the FATF recommendations in relation to non-profit organisations, virtual currency service providers and the powers of investigative and law enforcement authorities, but moderate shortcomings still remain, it said.
The second assessment report examined a number of legislative, regulatory and institutional measures taken by the Cypriot authorities in relation to risk assessment and supervision of the non-profit sector, the powers of investigative authorities to intercept telecommunications conversations, the application of controlled delivery techniques in cash and negotiable instruments to the bearer, and the supervision of virtual assets and related services.
"The authorities have taken some steps in terms of assessing the risk of terrorist financing from the non-profit sector and have strengthened their oversight, but these measures have not been fully implemented," Moveyal says.
It also mentions substantial progress in implementing a regime governing the virtual assets sector, but notes that, among other things, there is no national action plan to address the risks identified in the sector, while some technical weaknesses remain in the implementation of deterrents, including the so-called "travel rule".
It is also noted that there remain "minor deficiencies" related to the absence of powers to intercept telecommunications in the context of investigating money laundering, terrorist financing and other key offences. As mentioned, the interception of conversations covers only some laundering-related offences, in particular murder or manslaughter, trafficking and trafficking in persons, drug trafficking, as well as offences related to corruption and counterfeiting of banknotes.
However, the scope is limited, as court orders allowing the content of the conversations to be recorded do not extend to the investigation of money laundering, terrorist financing and other basic offences such as sexual exploitation, including of children, membership of a criminal organisation, fraud, theft, trafficking in arms, and corruption offences punishable by less than five years' imprisonment, such as tax offences and others.
Source: CNA
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