Strengthening Cyprus’ Stand Against Illicit Finance
In a move that underscores the determination to shed its past reputation, Cyprus has taken significant strides under the leadership of President Nikos Christodoulides. The president’s unwavering dedication to addressing issues of money laundering and illicit finance has been evident not only in rhetoric but also in concrete actions. One such action is the creation of a unified authority tasked with the oversight of professional service providers, including law firms and audit offices. This step was taken despite facing considerable resistance from the professional bodies themselves.
Moreover, Cyprus has engaged in fruitful collaborations with US and British authorities at a technocratic level to bolster the enforcement of sanctions since last year. In a recent development, the Cyprus and United States governments have announced a partnership aimed at enhancing the Cypriot justice system’s capabilities to counter illicit finance. A memorandum of understanding is set to be signed between Cyprus police and the FBI, formalizing cooperation between the two justice systems. This collaboration will involve key law enforcement partners such as the Law Office of the Republic and the finance intelligence unit Mokas.
The joint statement highlighted that this increased cooperation comes as a direct response to President Christodoulides’ request for assistance in empowering Cyprus to tackle illicit finance more effectively. Various elements of the US Department of Justice, including the FBI, OPDAT, Task Force KleptoCapture, and MLARS, have worked alongside the Department of State’s Bureau of International Narcotics and Law Enforcement Affairs and the US Embassy in Nicosia to fulfill this request.
US authorities have now established direct cooperation with Cypriot law enforcement to enhance their capacity in identifying and prosecuting financial crimes. This collaboration marks a significant evolution from previous assistance to a formal partnership, which is expected to substantially improve Cyprus’ ability to combat illicit finance. The country’s law enforcement entities have historically lacked expertise in this area, leading to ineffective action against money laundering and sanctions evasion.
President Christodoulides’ proactive approach in seeking external support and expertise signifies a bold and necessary step towards reforming Cyprus’ image and practices. While inviting US intervention may draw criticism from some quarters, it is seen as an essential measure for Cyprus to effectively address its history of lax AML controls and sanction enforcement. With the US now directly involved, the prospects for a successful clean-up operation appear significantly brighter.