The new provisions follow the National Risk Assessment carried out in 2016, where the Central Bank of Cyprus (CBC), together with other domestic supervisors, completed its cooperation with the World Bank on the task of assessing the risks of money laundering and terrorist financing emerging at national level.
The agreement concluded in 2015 provided for the assessment of the threats and inherent vulnerability of Cyprus to the risks of money laundering and terrorist financing on the basis of the internationally accepted methodology of the World Bank.
By assessing these risks at national level, Cyprus will have complied with the provisions of the International Financial Action Task Force (FATF) and the 4th Directive of the European Parliament and of the Council on the prevention of the use of the financial system for money laundering and terrorist financing (Directive 2015/849), which will come into force in June 2017.
The year 2016 also saw the completion by the Central Bank of Cyprus (CBC) of its full-year on-the-spot audits (2014-2016) on all credit institutions under its supervision. The three-year on-the-spot check-up programme was part of the Action Plan in Cyprus’ bailout programme (Annex 2 of the Memorandum of Understanding) on preventing money laundering and terrorist financing, with a view to addressing any shortcomings identified by studies conducted in 2013 by the Moneyval Committee Europe and the 2013 Deloitte Italy audit firm.
In addition, the CBC is working with the anti-money-laundering unit MOKAS to transpose into national law EU Directive 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purpose of money laundering or for the financing of terrorism.
“Close co-operation exists with the other supervisory authorities in Cyprus in the context of the functioning of the Consultative Body established under the relevant law and with foreign supervisory authorities based on the existing legal framework and memoranda of understanding that have been signed”, the CBC said in a statement.
The CBC continues to monitor, evaluate and supervise the application of the requirements of the relevant legal and regulatory framework by supervised institutions based on international and European standards.
It implements a complete programme of on-site as well as remote checks and takes all the appropriate measures under the current framework based on the results of these audits.