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Cyprus - Anti-Money Laundering legislation

  • 18-03-2013 2:45pm
    #1
    Dan133269
    Registered Users, Registered Users 2 Posts: 1,229 ✭✭✭


    Ok, this is one of the questions that springs to my mind. From what I've read about the Cypriot bail-in, a lot of sources are saying that a large amount of deposits are the proceeds of illegal crime from Russian mafia. The German Finance Minister, Wolfgang Schauble also effectively saying it.

    So my question in this, if there is a huge amount of money in Cyprus which is being laundered there from ill-gotten gains outside the EU, why hasn’t Cyprus been implementing the anti-money laundering legislation like it should have been under EU law? As far as I’m aware there have been 2 different Directives on this, and a third Proposed Directive has recently been announced.


Comments

  • #2
    Scofflaw
    Registered Users, Registered Users 2 Posts: 23,283 ✭✭✭✭Scofflaw


    Dan133269 wrote: »
    Ok, this is one of the questions that springs to my mind. From what I've read about the Cypriot bail-in, a lot of sources are saying that a large amount of deposits are the proceeds of illegal crime from Russian mafia. The German Finance Minister, Wolfgang Schauble also effectively saying it.

    So my question in this, if there is a huge amount of money in Cyprus which is being laundered there from ill-gotten gains outside the EU, why hasn’t Cyprus been implementing the anti-money laundering legislation like it should have been under EU law? As far as I’m aware there have been 2 different Directives on this, and a third Proposed Directive has recently been announced.

    I would assume that they have been implemented into law, and then bypassed to some extent in practice. We have similar dead letter laws, and unless someone takes a case that the legislation has either not been implemented or is not being enforced, or the regulator takes a hand, the situation would be stable.

    I would imagine the setup in Cyprus was rather similar to here in terms of regulatory capture by the industry, and government pressure not to rock the profits boat.

    cordially,
    Scofflaw


  • #3
    Cody Pomeray
    Closed Accounts Posts: 3,648 ✭✭✭Cody Pomeray


    I suggest you read the Moneyval report to see the extent of money laundering in Cypriot financial institutions.

    http://www.law.gov.cy/law/mokas/mokas.nsf/All/04BAA49AF88AF88AC2257A5C0034255D/$file/MONEYVAL(2011)%20-%20Fourth%20Round%20Evaluation.pdf?OpenElement

    Cyprus has transposed all of the EU legislation against money laundering.

    in fact, beneficial ownership of capital is determined by stricter rules than set out in EU legislation.

    There are no secrecy laws governing financial institutions which inhibit the implementations of the international standards against money laundering, unlike, say in Austria or Switzerland.

    Moneyval said (and remember, this is an EU body speaking) that the Cypriot anti-money laundering agency, is "adequately performing its role as a key player in the [anti money laundering] system.

    In fact... compare Cyprus to Germany.

    29ge5o2.png

    Now the troika are sending Moneyval back in again, and this time they want a different answer.


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