Cyprus’s Anti-Money Laundering (AML) framework is vital for ensuring financial integrity and security in alignment with international and EU standards. This introduction highlights key aspects, including the legal framework, supervision of regulated entities, and the role of beneficial ownership registers, emphasizing the importance of AML compliance in Cyprus and the broader EU.
In general, Anti-Money Laundering Laws
Anti-Money Laundering European Union Directive refers to a series of directives issued by the European Union (EU) to combat money laundering and terrorist financing within its member states. The purpose of these directives is to establish a common framework and minimum standards for anti-money laundering (AML) and counter-terrorist financing (CTF) measures across the EU.
The responsibility for abiding by Anti-Money Laundering (AML) laws and regulations falls on various entities and individuals involved in financial and business activities. Anti-Money Laundering (AML) laws are designed to prevent and detect money laundering, as well as combat the financing of terrorism. The specific obligations and responsibilities can vary by jurisdiction, but generally, entities like financial institutions, Designated Non-Financial Businesses, and Professions – lawyers, accountants, auditors, tax advisors, real estate businesses, casinos, Virtual Asset Service Providers (VASPs) are subject to AML laws.
Also, service providers must be aware of sanctions, and proliferation financing.
Key provisions and objectives of the Anti-Money Laundering – AML EU Directive framework include:
- Establishing customer due diligence procedures for identifying and verifying the identity of customers.
- Identifying and mitigating risks associated with money laundering and terrorist financing.
- Promoting cooperation and information sharing among national authorities and financial institutions.
- Creating beneficial ownership registers to enhance transparency.
- Ensuring that virtual currency exchanges and wallet providers are subject to Anti-Money Laundering – AML regulations.
- Implementing measures to prevent the misuse of shell companies.
In Cyprus, Anti-Money Laundering Laws and Regulations
Cyprus, like many countries, has implemented Anti-Money Laundering (AML) laws and regulations to combat money laundering and the financing of terrorism. The Anti-Money Laundering – AML framework in Cyprus is designed to align with European Union (EU) directives and international standards on Anti-Money Laundering – AML and counter-terrorist financing (CTF). Below are key aspects of Cyprus Anti-Money Laundering law:
Legal Framework: Cyprus Anti-Money Laundering – AML legal framework is primarily governed by the Prevention and Suppression of Money Laundering Activities Law of 2007 (Law 188(I)/2007). This law has been amended multiple times to align with EU AML directives.
Supervision of Regulated Entities: Cyprus Anti-Money Laundering – AML regulations applies to various regulated entities, including banks, credit institutions, insurance companies, investment firms, lawyers, accountants, auditors, tax consultants, investment advisors, real estate businesses, casinos, Virtual Asset Service Providers (VASPs). These entities are subject to strict Anti-Money Laundering – AML requirements, including customer due diligence (CDD) and reporting of suspicious transactions.
Regulated entities in Cyprus must conduct Customer Due Diligence – CDD on their customers to identify and verify their identity and assess the risk of money laundering or terrorist financing. Enhanced due diligence measures are required for higher-risk customers.
Cyprus has established beneficial ownership registers for companies and legal entities to increase transparency. Entities are required to maintain accurate records of their beneficial owners and share this information with competent authorities.
Regulated entities have a legal obligation to report suspicious transactions to a special unit – MOKAS. They are also required to report certain cash transactions exceeding specified thresholds.
Cyprus has adopted a risk-based approach to Anti-Money Laundering – AML, which means that entities should assess and manage the risk of money laundering and terrorist financing in a manner proportionate to the risk. Higher-risk activities and customers require more rigorous Anti-Money Laundering – AML measures.
The Anti-Money Laundering – AML law in Cyprus includes provisions for administrative fines, penalties, and criminal sanctions for non-compliance with Anti-Money Laundering – AML regulations. These penalties can be imposed on individuals and entities.
Conclusion
Cyprus’s commitment to robust Anti-Money Laundering (AML) laws and regulations is a crucial step in combating money laundering and terrorist financing. By aligning its legal framework with European Union directives and international standards, Cyprus underscores its dedication to maintaining financial integrity and preventing illicit activities. It emphasizes the significance of AML compliance, reinforcing the importance of diligence and cooperation in safeguarding the financial sector and promoting transparency.
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Accordingly, no person, entity, or corporation should act or rely upon any matter or information as contained or implied within this publication without first obtaining advice from an appropriately qualified professional person or firm of advisors, and ensuring that such advice specifically relates to their particular circumstances.