Cyprus: Cyprus Anti-Money Laundering Measures And The New Regulations For The Administrative Service Providers (ASP)

The Republic of Cyprus (hereinafter "Cyprus") has been the target of many European Countries due to it's allegedly lack of money laundering measures that damage the European Union. Is the reaction of these European Union Countries justified?

Cyprus, even before joining the family of the European Union had in place legislation as well as a body responsible for the supervision of monetary transactions within its jurisdiction.

The relevant legislation as drafted and proposed by the Parliament in 1996 was approved in 1997 as the Prevention and Suppression of Money Laundering Acts Law. Since then numerous amendments were made with the latest coming into force in 2012.

In addition, Cyprus ratified on 30 Nov 2001 the International Convention for the Suppression of the Financing of Terrorism.

The unit for Combating Money Laundering (MOKAS) was established to supervise the provisions of Prevention and Suppression of Money Laundering Activities Law. MOKAS gained the power to investigate any reports for potential money laundering and has therefore been structured and manned with a variety of professionals such as advocates, custom officers, financial analysts, police officers and many others, making MOKAS a powerful tool in the hand of the Attorney General against money laundering in Cyprus.

The adoption of the Prevention and Suppression of Money Laundering Activities Law 2007 has put Cyprus in line with the international conventions of the:

  • United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (Vienna Convention) 1988,
  • Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime 1990,
  • Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism 2005,
  • Relevant European Union Council Directives,
  • EU Council Framework Decisions and the 40+9 Recommendations of the FATF on ML&FT. It participates in the following organizations:
  • Moneyval Committee of the Council of Europe,
  • EU Committee on the Prevention of Money Laundering and Terrorist Financing,
  • Camden Assets Recovery Inter-Agency Network (CARIN),
  • FIU Net Task Force, the Asset Recovery Offices Forum and the FIU Platform.

Recent Measures for ASP's

Foreign investors use the services of local lawyers and accountants, who are qualified in implementing investor's corporate structures. It is vital to be in opposition to recognize which transactions may not be genuine in order to report them to MOKAS. Unfortunately, in the last few years a number of unqualified offices made their appearance in Cyprus, providing "corporate services" without having the necessary know-how and with limited knowledge of Cyprus Law. This inevitably caused problems to a number of investors who realized that the administration of their Company was not in line with Cyprus law. The Parliament of Cyprus, in an attempt to maximize the control over the corporate service market, has recently approved and adopted law 196(Ι)/2012 on Regulating Companies Providing Administrative Services and Related Matters (the "Law").

The Law has put the burden on the Cyprus Bar Association and Cyprus Securities and Exchange Commission to supervise those authorized under the Law and those that are already qualified to provide administrative services.

The Law provides for exempt persons, i.e. persons that are allowed to provide administrative services without applying to the Cyprus Bar Association and Cyprus Securities and Exchange Commission. Namely, the the Cyprus Bar Association and Cyprus Securities and Exchange Commission persons are:

  1. An advocates or an advocates' limited company (L.L.C.) as defined in the Advocates' Law, 42/1961 as amended and a general or limited partnership whose general partners are either lawyers or a lawyers' limited company regulated by the Cyprus Bar Association, in its capacity as regulatory authority for the Prevention and Suppression of Money Laundering Activities Law;
  2. members of the Institute of Certified Public Accountants of Cyprus and a general, limited partnership or a limited liability company whose majority of general partners or shareholders and directors, members of Institute of Certified Public Accountants of Cyprus, in its capacity as regulatory authority for the Prevention and Suppression of Money Laundering Activities Law; and
  3. a subsidiary company, either directly or indirectly, of any of the above persons;

It is therefore important that each investor makes sure that his companies in Cyprus are being administered by a licensed ASP company or by one of the exempt persons. It should be noted that persons that are in breach of the Law are subject to heavy fines by the regulatory authorities.

Reports and Incidents of Money Laundering

The Government of Cyprus has recently obtained two reports from Deloitte and Moneyval who they were instructed to review, among others, the Anti-Money Laundering (AML) procedures used by the Banks and service providers as well as the Customer's Due Diligence (CDD).

Both reports have shown that there is room for improvement but under no circumstances gives the right to any EU Country or otherwise to attack Cyprus as the money laundering jurisdiction of Europe.

We have seen in the near past money laundering scandals around the globe, but those countries haven't been "attacked" by the media and or foreign governments as much as they did with Cyprus.

Some examples of proved money laundering are:

  • In 2013, Guaranty Trust Bank (UK) has been fined with a fine of £525,000 for inadequate anti-money laundering control in relation to high-risk customer, politically exposed.
  • in 2012, HSBC Holdings Plc agreed to pay $1.92 billion in fines to U.S. authorities for not applying the anti-money laundering provision, allowing the institution to be used by Mexican drug lords for money laundering.
  • In 2008, Commerzbank was ordered by the Frankfurt civil-court to pay €7.3 million, including confiscation of €6.3 million of profits derived from illegal activity
  • In 2002 what has become known as the "Benex Scandal" which involves allegedly Russian mafia money being moved to the Bank of New York, among others. It has been estimated that $7 to $9 billion was laundered through the Bank of New York accounts.

It should further be noted that a study published by the Tax Justice Network which examined seventy countries found that Germany is one of the biggest havens for tax evasion. It's worth saying that Germany even ranks higher than offshore jurisdictions, such as Cayman Islands, that do not comply with the OECD or EU Regulations and Directives.

In the light of the above mentioned facts each of you can make his own decisions to which countries do really "support" money laundering.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
Email Address
Company Name
Confirm Password
Mondaq Newsalert
Select Topics
Select Regions
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions