Cyprus Country Summary

FATF Status

Cyprus is not currently on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Cyprus was undertaken in December, 2023. According to that Evaluation, Cyprus was deemed Compliant for 16 and Largely Compliant for 21 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 3 of the Effectiveness & Technical Compliance ratings.

Cyprus faces significant challenges related to crime and corruption, with widespread public perception indicating that corruption is a pervasive issue affecting daily life. Human trafficking, drug trafficking, and various forms of smuggling are prominent criminal markets, exacerbated by the island's strategic location and the influence of organized crime, which has infiltrated both public and private sectors, undermining governance and public trust.

Cyprus, strategically located at the crossroads of Europe, Africa, and Asia, has established itself as an attractive destination for foreign direct investment (FDI), particularly in sectors such as shipping, tourism, and finance. The Republic of Cyprus (ROC) has shown resilience in its economic performance, achieving a GDP growth of 2.4% in 2023, significantly outpacing the average growth of its Eurozone peers, alongside a relatively low unemployment rate of 6.5%. The government actively promotes green investments and has made significant strides in attracting FDI in emerging sectors such as energy and technology, bolstered by the discovery of hydrocarbon deposits in its Exclusive Economic Zone, although investors should navigate the complexities arising from the political division of the island.