_________________________________________________________
US State Dept Narcotics Report 2011 (introduction):
No report available
_________________________________________________________
US State Dept Trafficking in Persons Report 2011 (introduction):
(Tier 2 Watch List)
Cyprus is a destination country for men and women who are subjected to
forced labor and forced prostitution. NGOs report that trafficking victims
in Cyprus originate from Russia, Moldova, Ukraine, Hungary, Bulgaria,
Romania, Belarus, the Philippines, Morocco, China, Vietnam,
Uzbekistan, Greece, the United Kingdom, Colombia and the Dominican
Republic. During the reporting period, the government identified victims
from Vietnam, China, the Philippines, Egypt, Romania, Bulgaria, India,
Nepal, Cameroon, Ukraine, and Estonia. Sex trafficking occurs within
commercial sex industry outlets in Cyprus, including cabarets, bars,
pubs, and massage parlors disguised as private apartments. Groups
vulnerable to forced labor include domestic workers from Vietnam, as
well as asylum seekers, foreign migrants, and EU citizens from Romania
and Bulgaria working in the construction and agricultural sectors. NGOs
continue to report that Roma children, as well as children of migrants
and asylum seekers, remain especially vulnerable to prostitution and
other forms of trafficking. Local authorities and NGOs noted an increase
in street prostitution in the country involving women from Romania,
China, Vietnam and the Philippines in 2010; these women are vulnerable
to trafficking given the debts incurred by migrating to Cyprus.
The Government of Cyprus does not fully comply with the minimum
standards for the elimination of trafficking; however, it is making
significant efforts to do so. Some observers allege that trafficking-related
complicity significantly hampered the government’s anti-trafficking efforts
though the government took some initial steps to address it. The
government also initiated implementation of its April 2010 National Action
Plan (NAP) during the reporting period. Despite these efforts, however,
the government failed to demonstrate evidence of increasing efforts to
address human trafficking over the previous reporting period; therefore,
Cyprus is placed on Tier 2 Watch List. The government failed to
vigorously prosecute or convict trafficking offenders; very few
prosecutions resulted in traffickers being held accountable in 2010.
Further, the government did not convict or sentence any officials
complicit in trafficking in Cyprus, which observers allege continued to be
a significant problem. Although the government dedicated significant
resources to its NAP, implementation of the plan was slow. The
government made few improvements in the protection of victims; it did
not ensure procedures for the safe repatriation of foreign victims. The
artiste visa that was of grave concern in previous reporting periods was
replaced with other visa or work permit categories which traffickers have
managed to exploit to import foreign women into the commercial sex
industry, a major locus of human trafficking. The government has yet to
implement a nationwide campaign to specifically address demand within
the context of Cyprus, in order to educate clients about the realities of
forced prostitution inherent to the island’s sex industry.
Area Administered by Turkish Cypriots
The northern area of Cyprus is administered by Turkish Cypriots; the
area has declared itself the “Turkish Republic of Northern Cyprus”
(“TRNC”). The United States does not recognize the “TRNC,” nor does
any other country except Turkey. The area administered by Turkish
Cypriots is a destination for women originating from Eastern European
countries and subjected to conditions of forced prostitution. Men and
women are also reportedly subjected to conditions of forced labor.
According to local authorities, women working in nightclubs and pubs
who received “hostess” or “barmaid” work permits in 2010 came
overwhelmingly from Moldova, followed by Ukraine.
Turkish Cypriot authorities continue to deny that trafficking is a
significant problem in the area, posing a serious challenge to assuring
any protection for women from trafficking or the prosecution of their
traffickers. Local observers continue to report a significant trafficking
problem with foreign women being deprived of their freedom in
nightclubs. Despite this, Turkish Cypriot authorities identified no
trafficking victims during the reporting period.
Although the area administered by Turkish Cypriots drafted an anti-
trafficking “bill” in 2007, it has yet to make any progress on this
“legislation.” Turkish Cypriot authorities provided no specialized training
on trafficking and continued to confuse trafficking with prostitution and
smuggling. Trafficking crimes can potentially be prosecuted on charges
of “living off the earnings of prostitution” or “encouraging prostitution.”
Persons convicted under these “laws” can receive up to two years’
imprisonment. These penalties are not commensurate with those
prescribed for other serious crimes in the area administered by Turkish
Cypriots, such as rape. NGOs report that organized crime elements are
behind the ownership and management of some of the nightclubs in the
north. Further, local observers report that local “police” are complicit with
traffickers and are directly involved in the trafficking. Authorities hold the
travel documents of foreign women working in nightclubs in the “TRNC.”
Authorities do not have specialized procedures in place to identify
trafficking victims among vulnerable groups or refer victims to service
providers, nor do they allocate any funding to anti-trafficking efforts or
provide any specialized care or shelter for victims. Deportation is the
most common form of “rescue” the authorities use for women who
complain about their employment at nightclubs and ask for help from the
local police. Although prostitution is illegal in the “TRNC,” nightclub
employees are required to submit to weekly health checks for sexually-
transmitted infection screening, suggesting tacit approval by the
authorities of the prostitution industry. If arrested on prostitution
charges, a victim is usually deported within 24 hours. Likely trafficking
victims arrested for engaging in prostitution were also sometimes
detained before their deportation. The “TRNC” issued 977 “hostess”
work permits and 16 “barmaid” work permits in 2010. Authorities in 2009
reported issuing 961 “hostess” work permits, including renewals, and 14
“barmaid” permits during the previous reporting period. Turkish Cypriot
authorities did not conduct any anti-trafficking awareness campaigns
during the reporting period.
The “TRNC” does not fully comply with the minimum standards for the
elimination of trafficking, and does not appear to be making significant
efforts to do so. If the “TRNC” were assigned a formal ranking in this
report, it would likely be Tier 3.
For full report click here
_________________________________________________________
US State Dept Terrorism Report 2010
Overview: The Government of Cyprus was responsive to efforts to block
and freeze terrorist assets, implemented Financial Action Task Force
(FATF) recommendations, and conformed to EU counterterrorism
directives. Cyprus continued to allow blanket overflight and landing rights
to U.S. military aircraft supporting operations in Iraq and Afghanistan,
and provided regular, routine protection for transiting personnel. Since
1974, the northern part of Cyprus has been administered by Turkish
Cypriots and proclaimed itself the “Turkish Republic of Northern Cyprus
(TRNC)” in 1983. The United States does not recognize the TRNC, nor
does any country other than Turkey. The largely porous, lightly patrolled
“green line” separating the two sides is routinely exploited for trafficking
people, narcotics, and other illicit goods.
Members of the Kurdistan Workers’ Party (PKK) engaged in fundraising
in Cyprus and transited Cyprus en route to third countries. Cypriot
authorities believed there was little risk the group would conduct
operations in Cyprus and maintained that the Cypriot government was
fulfilling all responsibilities with respect to the EU designation of the PKK
as a terrorist organization.
Legislation and Law Enforcement: In November, the Republic of Cyprus
Parliament passed a law to bring Cyprus into conformity with European
Council terrorism guidelines. The law specified what constituted a
terrorist group and formally accepted the list of terrorist organizations
compiled by the European Council. The law identified terrorist offenses
and corresponding criminal penalties. In October, the Government of
Cyprus designated a Counterterrorism Coordinator. In June, an
amendment was made to the Constitution with the intent of enabling
police to obtain information – provided the Attorney General secured a
court order – from telephone and other communications of persons
suspected of serious crimes and in the interest of national security.
Countering Terrorist Finance: The United States and Cyprus cooperated
closely on anti-money laundering and counterterrorist financing
(AML/CTF) issues. The Cypriot Anti-Money Laundering Authority
implemented new UNSCR 1267 listings immediately and informally
tracked suspect names listed under U.S. Executive Order 13224. The
Cypriot government maintained a “Prevention and Suppression of Money
laundering Activities Law” that contained provisions on tracing and
confiscating assets. In June, Cyprus amended its legislation to enhance
its asset freezing and confiscation regime. All financial entities must have
a national AML/CTF coordinator who will be responsible for the group's
domestic and foreign offices, and banks must have a separate
compliance department and apply risk management procedures.
In 2008, the FATF listed the Turkish Cypriot-administered area as a
jurisdiction susceptible to money laundering. In February 2009, FATF
found “significant progress” had been made. However, implementation of
Turkish Cypriot measures to counter AML lagged in 2010.
Regional and International Cooperation: The de facto division of the
island has precluded counterterrorism cooperation between the two
communities’ law enforcement authorities, and between Cyprus and
Turkey. In the Turkish Cypriot-administered area, issues of status and
recognition inevitably restricted the ability of authorities to cooperate on
counterterrorism with international organizations and countries other
than Turkey. Turkish Cypriots cannot sign treaties, UN conventions, or
other international agreements, and lacked the legal and institutional
framework necessary to counter money laundering and terrorist
financing effectively. Within these limitations, however, Turkish Cypriots
cooperated in pursuing specific counterterrorism objectives.
Cyprus signed the Beijing Convention on the Suppression of Unlawful
Acts Relating to International Civil Aviation and the Protocol to the
Convention for the Suppression of Unlawful Seizure of Aircraft at the
conclusion of an ICAO diplomatic conference in September.
_________________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
US State Dept Narcotics Report 2011 (introduction):
No report available
_________________________________________________________
US State Dept Trafficking in Persons Report 2011 (introduction):
(Tier 2 Watch List)
Cyprus is a destination country for men and women who are subjected to
forced labor and forced prostitution. NGOs report that trafficking victims
in Cyprus originate from Russia, Moldova, Ukraine, Hungary, Bulgaria,
Romania, Belarus, the Philippines, Morocco, China, Vietnam,
Uzbekistan, Greece, the United Kingdom, Colombia and the Dominican
Republic. During the reporting period, the government identified victims
from Vietnam, China, the Philippines, Egypt, Romania, Bulgaria, India,
Nepal, Cameroon, Ukraine, and Estonia. Sex trafficking occurs within
commercial sex industry outlets in Cyprus, including cabarets, bars,
pubs, and massage parlors disguised as private apartments. Groups
vulnerable to forced labor include domestic workers from Vietnam, as
well as asylum seekers, foreign migrants, and EU citizens from Romania
and Bulgaria working in the construction and agricultural sectors. NGOs
continue to report that Roma children, as well as children of migrants
and asylum seekers, remain especially vulnerable to prostitution and
other forms of trafficking. Local authorities and NGOs noted an increase
in street prostitution in the country involving women from Romania,
China, Vietnam and the Philippines in 2010; these women are vulnerable
to trafficking given the debts incurred by migrating to Cyprus.
The Government of Cyprus does not fully comply with the minimum
standards for the elimination of trafficking; however, it is making
significant efforts to do so. Some observers allege that trafficking-related
complicity significantly hampered the government’s anti-trafficking efforts
though the government took some initial steps to address it. The
government also initiated implementation of its April 2010 National Action
Plan (NAP) during the reporting period. Despite these efforts, however,
the government failed to demonstrate evidence of increasing efforts to
address human trafficking over the previous reporting period; therefore,
Cyprus is placed on Tier 2 Watch List. The government failed to
vigorously prosecute or convict trafficking offenders; very few
prosecutions resulted in traffickers being held accountable in 2010.
Further, the government did not convict or sentence any officials
complicit in trafficking in Cyprus, which observers allege continued to be
a significant problem. Although the government dedicated significant
resources to its NAP, implementation of the plan was slow. The
government made few improvements in the protection of victims; it did
not ensure procedures for the safe repatriation of foreign victims. The
artiste visa that was of grave concern in previous reporting periods was
replaced with other visa or work permit categories which traffickers have
managed to exploit to import foreign women into the commercial sex
industry, a major locus of human trafficking. The government has yet to
implement a nationwide campaign to specifically address demand within
the context of Cyprus, in order to educate clients about the realities of
forced prostitution inherent to the island’s sex industry.
Area Administered by Turkish Cypriots
The northern area of Cyprus is administered by Turkish Cypriots; the
area has declared itself the “Turkish Republic of Northern Cyprus”
(“TRNC”). The United States does not recognize the “TRNC,” nor does
any other country except Turkey. The area administered by Turkish
Cypriots is a destination for women originating from Eastern European
countries and subjected to conditions of forced prostitution. Men and
women are also reportedly subjected to conditions of forced labor.
According to local authorities, women working in nightclubs and pubs
who received “hostess” or “barmaid” work permits in 2010 came
overwhelmingly from Moldova, followed by Ukraine.
Turkish Cypriot authorities continue to deny that trafficking is a
significant problem in the area, posing a serious challenge to assuring
any protection for women from trafficking or the prosecution of their
traffickers. Local observers continue to report a significant trafficking
problem with foreign women being deprived of their freedom in
nightclubs. Despite this, Turkish Cypriot authorities identified no
trafficking victims during the reporting period.
Although the area administered by Turkish Cypriots drafted an anti-
trafficking “bill” in 2007, it has yet to make any progress on this
“legislation.” Turkish Cypriot authorities provided no specialized training
on trafficking and continued to confuse trafficking with prostitution and
smuggling. Trafficking crimes can potentially be prosecuted on charges
of “living off the earnings of prostitution” or “encouraging prostitution.”
Persons convicted under these “laws” can receive up to two years’
imprisonment. These penalties are not commensurate with those
prescribed for other serious crimes in the area administered by Turkish
Cypriots, such as rape. NGOs report that organized crime elements are
behind the ownership and management of some of the nightclubs in the
north. Further, local observers report that local “police” are complicit with
traffickers and are directly involved in the trafficking. Authorities hold the
travel documents of foreign women working in nightclubs in the “TRNC.”
Authorities do not have specialized procedures in place to identify
trafficking victims among vulnerable groups or refer victims to service
providers, nor do they allocate any funding to anti-trafficking efforts or
provide any specialized care or shelter for victims. Deportation is the
most common form of “rescue” the authorities use for women who
complain about their employment at nightclubs and ask for help from the
local police. Although prostitution is illegal in the “TRNC,” nightclub
employees are required to submit to weekly health checks for sexually-
transmitted infection screening, suggesting tacit approval by the
authorities of the prostitution industry. If arrested on prostitution
charges, a victim is usually deported within 24 hours. Likely trafficking
victims arrested for engaging in prostitution were also sometimes
detained before their deportation. The “TRNC” issued 977 “hostess”
work permits and 16 “barmaid” work permits in 2010. Authorities in 2009
reported issuing 961 “hostess” work permits, including renewals, and 14
“barmaid” permits during the previous reporting period. Turkish Cypriot
authorities did not conduct any anti-trafficking awareness campaigns
during the reporting period.
The “TRNC” does not fully comply with the minimum standards for the
elimination of trafficking, and does not appear to be making significant
efforts to do so. If the “TRNC” were assigned a formal ranking in this
report, it would likely be Tier 3.
For full report click here
_________________________________________________________
US State Dept Terrorism Report 2010
Overview: The Government of Cyprus was responsive to efforts to block
and freeze terrorist assets, implemented Financial Action Task Force
(FATF) recommendations, and conformed to EU counterterrorism
directives. Cyprus continued to allow blanket overflight and landing rights
to U.S. military aircraft supporting operations in Iraq and Afghanistan,
and provided regular, routine protection for transiting personnel. Since
1974, the northern part of Cyprus has been administered by Turkish
Cypriots and proclaimed itself the “Turkish Republic of Northern Cyprus
(TRNC)” in 1983. The United States does not recognize the TRNC, nor
does any country other than Turkey. The largely porous, lightly patrolled
“green line” separating the two sides is routinely exploited for trafficking
people, narcotics, and other illicit goods.
Members of the Kurdistan Workers’ Party (PKK) engaged in fundraising
in Cyprus and transited Cyprus en route to third countries. Cypriot
authorities believed there was little risk the group would conduct
operations in Cyprus and maintained that the Cypriot government was
fulfilling all responsibilities with respect to the EU designation of the PKK
as a terrorist organization.
Legislation and Law Enforcement: In November, the Republic of Cyprus
Parliament passed a law to bring Cyprus into conformity with European
Council terrorism guidelines. The law specified what constituted a
terrorist group and formally accepted the list of terrorist organizations
compiled by the European Council. The law identified terrorist offenses
and corresponding criminal penalties. In October, the Government of
Cyprus designated a Counterterrorism Coordinator. In June, an
amendment was made to the Constitution with the intent of enabling
police to obtain information – provided the Attorney General secured a
court order – from telephone and other communications of persons
suspected of serious crimes and in the interest of national security.
Countering Terrorist Finance: The United States and Cyprus cooperated
closely on anti-money laundering and counterterrorist financing
(AML/CTF) issues. The Cypriot Anti-Money Laundering Authority
implemented new UNSCR 1267 listings immediately and informally
tracked suspect names listed under U.S. Executive Order 13224. The
Cypriot government maintained a “Prevention and Suppression of Money
laundering Activities Law” that contained provisions on tracing and
confiscating assets. In June, Cyprus amended its legislation to enhance
its asset freezing and confiscation regime. All financial entities must have
a national AML/CTF coordinator who will be responsible for the group's
domestic and foreign offices, and banks must have a separate
compliance department and apply risk management procedures.
In 2008, the FATF listed the Turkish Cypriot-administered area as a
jurisdiction susceptible to money laundering. In February 2009, FATF
found “significant progress” had been made. However, implementation of
Turkish Cypriot measures to counter AML lagged in 2010.
Regional and International Cooperation: The de facto division of the
island has precluded counterterrorism cooperation between the two
communities’ law enforcement authorities, and between Cyprus and
Turkey. In the Turkish Cypriot-administered area, issues of status and
recognition inevitably restricted the ability of authorities to cooperate on
counterterrorism with international organizations and countries other
than Turkey. Turkish Cypriots cannot sign treaties, UN conventions, or
other international agreements, and lacked the legal and institutional
framework necessary to counter money laundering and terrorist
financing effectively. Within these limitations, however, Turkish Cypriots
cooperated in pursuing specific counterterrorism objectives.
Cyprus signed the Beijing Convention on the Suppression of Unlawful
Acts Relating to International Civil Aviation and the Protocol to the
Convention for the Suppression of Unlawful Seizure of Aircraft at the
conclusion of an ICAO diplomatic conference in September.
_________________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
|
|
Sanctions:
As a member of the EU, the country is party to all EU Sanctions
as well as UN sanctions.
____________________________________________________
Offshore Jurisdiction Blacklists:
As a recognised offshore finance jurisdiction this country may fall
under various country offshore jurisdiction blacklists.
____________________________________________________
US State Department Money Laundering Report - 2012:
Since 1974, Cyprus has been divided de facto into the
government-controlled two-thirds of the island and the Turkish
Cypriot-administered one-third. The Government of the Republic
of Cyprus (ROC) has continued to be the only internationally
recognized authority; in practice, its authority extends only to the
government-controlled area. In 1983, the Turkish Cypriots
declared an independent “Turkish Republic of Northern Cyprus”
(“TRNC”). The United States does not recognize the “TRNC,” nor
does any country other than Turkey. This section of the report
discusses the area controlled by the ROC. A separate section on
the area administered by Turkish Cypriots follows.
Cyprus is a major regional financial center with a robust financial
services industry and a significant amount of nonresident
businesses. A number of factors have contributed to the
development of Cyprus as a financial center: a preferential tax
regime; double tax treaties with 44 countries (including the United
States, several European Union (EU) nations, and former Soviet
Union nations); well developed and modern legal, accounting and
banking systems; a sophisticated telecommunications
infrastructure; and EU membership. There are no legal or
substantive distinctions between domestic and offshore
companies. Cyprus has also lifted the prohibition from doing
business domestically, and companies formerly classified as
offshore are now free to engage in business locally. International
business companies are allowed to be registered in Cyprus but
their ultimate beneficial ownership must be disclosed to the
authorities. There are over 240,000 companies registered in
Cyprus, many of which belong to non-residents. The same
disclosure, reporting, tax and other laws and regulations apply
equally to all registered companies.
Like any financial center, Cyprus faces risks from money
laundering and illicit finance activities. The Cypriot authorities are
aware of those risks and take legislative and other measures to
counter and suppress such activities. The biggest threats for
money laundering are primarily from simple financial crime
domestically and tax evasion internationally. There is no
significant black market for smuggled goods in Cyprus. What little
black market trade exists is usually related to small scale
transactions, typically involving fake clothing, pirated CDs/DVDs
and cigarettes moved across the UN-patrolled buffer zone
separating the ROC from the “TRNC”.
Cyprus has three free trade zones (FTZs). Two, located in the
main seaports of Limassol and Larnaca, are used only for transit
trade, while the third, located near the international airport in
Larnaca, can also be used for repacking and reprocessing.
These areas are treated as being outside normal EU customs
territory. Consequently, non-EU goods placed in FTZs are not
subject to any import duties, VAT or excise tax. FTZs are
governed under the provisions of relevant EU and Cypriot
legislation. The Department of Customs has jurisdiction over all
three areas and can impose restrictions or prohibitions on certain
activities, depending on the nature of the goods.
For additional information focusing on terrorist financing, please
refer to the Department of State’s Country Reports on Terrorism,
which can be found here: http://www.state.gov/j/ct/rls/crt/
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: NO
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: NO
KYC covered entities: Banks, cooperative credit institutions,
securities and insurance firms, payment institutions including
money transfer businesses, trust and company service providers,
auditors, tax advisors, accountants, real estate agents, dealers in
precious stones and gems, and in certain cases, attorneys
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 510 in 2010
Number of CTRs received and time frame: Not available
STR covered entities: Banks, cooperative credit institutions,
securities and insurance firms, payment institutions including
money transfer businesses, trust and company service providers,
auditors, tax advisors, accountants, real estate agents, dealers in
precious stones and gems, and in certain cases, attorneys, plus
any person who in the course of his profession, business or
employment knows or reasonably suspects that another person is
engaged in money laundering or terrorist financing activities
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: 41 in 2010
Convictions: 15 in 2010
Records exchange mechanism:
With U.S.: MLAT: YES Other mechanism: YES
With other governments/jurisdictions: YES
Cyprus is a member of the Council of Europe’s Committee of
Experts on the Evaluation of Anti-Money Laundering Measures
and the Financing of Terrorism (MONEYVAL), a Financial Action
Task Force-style regional body (FSRB). Its most recent mutual
evaluation report can be found here: http://www.coe.
int/t/dghl/monitoring/moneyval/Countries/Cyprus_en.asp
Enforcement and implementation issues and comments:
There are no legal issues hampering Cyprus’ ability to assist
foreign governments in mutual legal assistance requests. Cypriot
law allows MOKAS, the Cypriot financial intelligence unit (FIU) to
share information with other FIUs without benefit of a
memorandum of understanding (MOU).
Cyprus has enacted comprehensive legislation and established
systems for identifying, tracing, freezing, seizing, and forfeiting
narcotics-related assets and assets derived from other serious
crimes. Like most EU countries, though, Cyprus has no provisions
allowing civil forfeiture of assets without a criminal case. The
police and the FIU are responsible for tracing, seizing and
freezing assets and they fully enforce existing legislation. Cyprus
has an independent national system and mechanism for freezing
terrorist assets, and has also engaged in bilateral and multilateral
negotiations with other governments to enhance its asset tracking
and seizure system.
Area Administered by Turkish Cypriots
The Turkish Cypriot community continues to lack the legal and
institutional framework necessary to provide effective protection
against the risks of money laundering, although significant
progress has been made in recent years with the passage of
“laws” better regulating the onshore and offshore banking sectors
and casinos. There are currently 21 domestic banks in the area
administered by Turkish Cypriots and Internet banking is available.
The offshore banking sector remains a concern. The offshore
sector consists of 11 banks and 90 companies. The offshore
banks may not conduct business with residents of the area
administered by Turkish Cypriots and may not deal in cash. The
“Central Bank” provides the regulation and licensing of offshore
banks and audits the offshore entities, which must submit an
annual report on their activities. The “law” permits only banks
previously licensed by Organization for Economic Co-operation
and Development (OECD)-member nations or Turkey to operate
an offshore branch in northern Cyprus.
The Turkish Cypriot community is not part of any FSRB and thus
is not subject to normal peer evaluations. Turkish Cypriot
authorities have taken steps to address the risk of financial crime,
including enacting an “anti-money laundering law (“AMLL”)” for
the area and formally establishing an FIU equivalent. The “AMLL”
aims to reduce the number of cash transactions in the area
administered by Turkish Cypriots as well as improve the tracking
of any transactions above 10,000 Euros (approximately $13,000).
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: no
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: NO
Domestic: NO
KYC covered entities: Banks, cooperative credit societies, finance
companies, leasing/factoring companies, portfolio management
firms, investment firms, jewelers, foreign exchange bureaus, real
estate agents, retailers of games of chance, lottery authority,
accountants, insurance firms, cargo firms, antique dealers, auto
dealers, lawyers
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 105 in 2011 (as of
October 30, 2011)
Number of CTRs received and time frame: Not available
STR covered entities: Banks, cooperative credit societies, finance
companies, leasing/factoring companies, portfolio management
firms, investment firms, jewelers, foreign exchange bureaus, real
estate agents, retailers of games of chance, lottery authority,
accountants, insurance firms, cargo firms, antique dealers, auto
dealers, lawyers
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: None
Convictions: None
Records exchange mechanism:
With U.S.: MLAT: NO Other mechanism: NO
With other governments/jurisdictions: YES – with Turkey only
The area administered by Turkish Cypriots is not a member of any
FSRB.
Enforcement and implementation issues and comments:
Despite the 2009 promulgation of more strict “laws,” the 24
operating casinos (four in Nicosia, five in Famagusta and 15 in
Kyrenia) remain essentially unregulated due to the lack of an
enforcement or investigative mechanism by the casino regulatory
body and efforts to de-criminalize any failure by casinos to follow
KYC regulations.
Banks and other designated entities must submit STRs to the
“FIU”. The “FIU” then will forward any STRs to the five-member
“Anti-Money Laundering Committee” which decides whether to
further refer suspicious cases to the “attorney general’s office,”
and then if necessary, to the “police” for further investigation. The
five-member committee is composed of representatives of the
“Ministry of Economy,” “Money and Exchange Bureau,” “Central
Bank,” “police” and “customs”.
The Turkish Cypriot “AMLL” provides better banking regulations
than were in force previously, but without ongoing enforcement its
objectives cannot be met. A major weakness continues to be the
many casinos, where a lack of resources and expertise leave the
area essentially unregulated, and therefore, especially vulnerable
to money laundering abuse. Amendments to a “law” to regulate
potential AML activity in casinos that would essentially
decriminalize failure to implement KYC rules have been pending
for over one year. The largely unregulated consumer finance
institutions and currency exchange houses are also of concern.
The Turkish Cypriot authorities should continue efforts to
enhance the “FIU,” and adopt and implement a strong licensing
and regulatory environment for all obligated institutions, in
particular casinos and money exchange houses. Turkish Cypriot
authorities should stringently enforce the cross-border currency
declaration requirements. Turkish Cypriot authorities should
continue steps to enhance the expertise of members of the
enforcement, regulatory, and financial communities with an
objective of better regulatory guidance, more efficient STR
reporting, better analysis of reports, and enhanced use of legal
tools available for prosecutions.
As a member of the EU, the country is party to all EU Sanctions
as well as UN sanctions.
____________________________________________________
Offshore Jurisdiction Blacklists:
As a recognised offshore finance jurisdiction this country may fall
under various country offshore jurisdiction blacklists.
____________________________________________________
US State Department Money Laundering Report - 2012:
Since 1974, Cyprus has been divided de facto into the
government-controlled two-thirds of the island and the Turkish
Cypriot-administered one-third. The Government of the Republic
of Cyprus (ROC) has continued to be the only internationally
recognized authority; in practice, its authority extends only to the
government-controlled area. In 1983, the Turkish Cypriots
declared an independent “Turkish Republic of Northern Cyprus”
(“TRNC”). The United States does not recognize the “TRNC,” nor
does any country other than Turkey. This section of the report
discusses the area controlled by the ROC. A separate section on
the area administered by Turkish Cypriots follows.
Cyprus is a major regional financial center with a robust financial
services industry and a significant amount of nonresident
businesses. A number of factors have contributed to the
development of Cyprus as a financial center: a preferential tax
regime; double tax treaties with 44 countries (including the United
States, several European Union (EU) nations, and former Soviet
Union nations); well developed and modern legal, accounting and
banking systems; a sophisticated telecommunications
infrastructure; and EU membership. There are no legal or
substantive distinctions between domestic and offshore
companies. Cyprus has also lifted the prohibition from doing
business domestically, and companies formerly classified as
offshore are now free to engage in business locally. International
business companies are allowed to be registered in Cyprus but
their ultimate beneficial ownership must be disclosed to the
authorities. There are over 240,000 companies registered in
Cyprus, many of which belong to non-residents. The same
disclosure, reporting, tax and other laws and regulations apply
equally to all registered companies.
Like any financial center, Cyprus faces risks from money
laundering and illicit finance activities. The Cypriot authorities are
aware of those risks and take legislative and other measures to
counter and suppress such activities. The biggest threats for
money laundering are primarily from simple financial crime
domestically and tax evasion internationally. There is no
significant black market for smuggled goods in Cyprus. What little
black market trade exists is usually related to small scale
transactions, typically involving fake clothing, pirated CDs/DVDs
and cigarettes moved across the UN-patrolled buffer zone
separating the ROC from the “TRNC”.
Cyprus has three free trade zones (FTZs). Two, located in the
main seaports of Limassol and Larnaca, are used only for transit
trade, while the third, located near the international airport in
Larnaca, can also be used for repacking and reprocessing.
These areas are treated as being outside normal EU customs
territory. Consequently, non-EU goods placed in FTZs are not
subject to any import duties, VAT or excise tax. FTZs are
governed under the provisions of relevant EU and Cypriot
legislation. The Department of Customs has jurisdiction over all
three areas and can impose restrictions or prohibitions on certain
activities, depending on the nature of the goods.
For additional information focusing on terrorist financing, please
refer to the Department of State’s Country Reports on Terrorism,
which can be found here: http://www.state.gov/j/ct/rls/crt/
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: NO
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: NO
KYC covered entities: Banks, cooperative credit institutions,
securities and insurance firms, payment institutions including
money transfer businesses, trust and company service providers,
auditors, tax advisors, accountants, real estate agents, dealers in
precious stones and gems, and in certain cases, attorneys
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 510 in 2010
Number of CTRs received and time frame: Not available
STR covered entities: Banks, cooperative credit institutions,
securities and insurance firms, payment institutions including
money transfer businesses, trust and company service providers,
auditors, tax advisors, accountants, real estate agents, dealers in
precious stones and gems, and in certain cases, attorneys, plus
any person who in the course of his profession, business or
employment knows or reasonably suspects that another person is
engaged in money laundering or terrorist financing activities
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: 41 in 2010
Convictions: 15 in 2010
Records exchange mechanism:
With U.S.: MLAT: YES Other mechanism: YES
With other governments/jurisdictions: YES
Cyprus is a member of the Council of Europe’s Committee of
Experts on the Evaluation of Anti-Money Laundering Measures
and the Financing of Terrorism (MONEYVAL), a Financial Action
Task Force-style regional body (FSRB). Its most recent mutual
evaluation report can be found here: http://www.coe.
int/t/dghl/monitoring/moneyval/Countries/Cyprus_en.asp
Enforcement and implementation issues and comments:
There are no legal issues hampering Cyprus’ ability to assist
foreign governments in mutual legal assistance requests. Cypriot
law allows MOKAS, the Cypriot financial intelligence unit (FIU) to
share information with other FIUs without benefit of a
memorandum of understanding (MOU).
Cyprus has enacted comprehensive legislation and established
systems for identifying, tracing, freezing, seizing, and forfeiting
narcotics-related assets and assets derived from other serious
crimes. Like most EU countries, though, Cyprus has no provisions
allowing civil forfeiture of assets without a criminal case. The
police and the FIU are responsible for tracing, seizing and
freezing assets and they fully enforce existing legislation. Cyprus
has an independent national system and mechanism for freezing
terrorist assets, and has also engaged in bilateral and multilateral
negotiations with other governments to enhance its asset tracking
and seizure system.
Area Administered by Turkish Cypriots
The Turkish Cypriot community continues to lack the legal and
institutional framework necessary to provide effective protection
against the risks of money laundering, although significant
progress has been made in recent years with the passage of
“laws” better regulating the onshore and offshore banking sectors
and casinos. There are currently 21 domestic banks in the area
administered by Turkish Cypriots and Internet banking is available.
The offshore banking sector remains a concern. The offshore
sector consists of 11 banks and 90 companies. The offshore
banks may not conduct business with residents of the area
administered by Turkish Cypriots and may not deal in cash. The
“Central Bank” provides the regulation and licensing of offshore
banks and audits the offshore entities, which must submit an
annual report on their activities. The “law” permits only banks
previously licensed by Organization for Economic Co-operation
and Development (OECD)-member nations or Turkey to operate
an offshore branch in northern Cyprus.
The Turkish Cypriot community is not part of any FSRB and thus
is not subject to normal peer evaluations. Turkish Cypriot
authorities have taken steps to address the risk of financial crime,
including enacting an “anti-money laundering law (“AMLL”)” for
the area and formally establishing an FIU equivalent. The “AMLL”
aims to reduce the number of cash transactions in the area
administered by Turkish Cypriots as well as improve the tracking
of any transactions above 10,000 Euros (approximately $13,000).
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: no
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: NO
Domestic: NO
KYC covered entities: Banks, cooperative credit societies, finance
companies, leasing/factoring companies, portfolio management
firms, investment firms, jewelers, foreign exchange bureaus, real
estate agents, retailers of games of chance, lottery authority,
accountants, insurance firms, cargo firms, antique dealers, auto
dealers, lawyers
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 105 in 2011 (as of
October 30, 2011)
Number of CTRs received and time frame: Not available
STR covered entities: Banks, cooperative credit societies, finance
companies, leasing/factoring companies, portfolio management
firms, investment firms, jewelers, foreign exchange bureaus, real
estate agents, retailers of games of chance, lottery authority,
accountants, insurance firms, cargo firms, antique dealers, auto
dealers, lawyers
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: None
Convictions: None
Records exchange mechanism:
With U.S.: MLAT: NO Other mechanism: NO
With other governments/jurisdictions: YES – with Turkey only
The area administered by Turkish Cypriots is not a member of any
FSRB.
Enforcement and implementation issues and comments:
Despite the 2009 promulgation of more strict “laws,” the 24
operating casinos (four in Nicosia, five in Famagusta and 15 in
Kyrenia) remain essentially unregulated due to the lack of an
enforcement or investigative mechanism by the casino regulatory
body and efforts to de-criminalize any failure by casinos to follow
KYC regulations.
Banks and other designated entities must submit STRs to the
“FIU”. The “FIU” then will forward any STRs to the five-member
“Anti-Money Laundering Committee” which decides whether to
further refer suspicious cases to the “attorney general’s office,”
and then if necessary, to the “police” for further investigation. The
five-member committee is composed of representatives of the
“Ministry of Economy,” “Money and Exchange Bureau,” “Central
Bank,” “police” and “customs”.
The Turkish Cypriot “AMLL” provides better banking regulations
than were in force previously, but without ongoing enforcement its
objectives cannot be met. A major weakness continues to be the
many casinos, where a lack of resources and expertise leave the
area essentially unregulated, and therefore, especially vulnerable
to money laundering abuse. Amendments to a “law” to regulate
potential AML activity in casinos that would essentially
decriminalize failure to implement KYC rules have been pending
for over one year. The largely unregulated consumer finance
institutions and currency exchange houses are also of concern.
The Turkish Cypriot authorities should continue efforts to
enhance the “FIU,” and adopt and implement a strong licensing
and regulatory environment for all obligated institutions, in
particular casinos and money exchange houses. Turkish Cypriot
authorities should stringently enforce the cross-border currency
declaration requirements. Turkish Cypriot authorities should
continue steps to enhance the expertise of members of the
enforcement, regulatory, and financial communities with an
objective of better regulatory guidance, more efficient STR
reporting, better analysis of reports, and enhanced use of legal
tools available for prosecutions.
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*Please note that FATF deems that a country has significant aml deficiencies if any
of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated either
Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated either
Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
| CYPRUS |
| KnowYourCountry |
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| Last Updated: 16 April 2012 |