On 2 May 2025, the Central Bank of Cyprus (CBC) announced the adoption of a new Directive (Κ.Δ.Π. 120/2025) focused on preventing money laundering and the financing of terrorism. This updated framework aims to modernize how financial institutions approach compliance, while also making it easier for individuals and businesses to access banking services.
The CBC has made it clear that its high standards for preventing financial crime remain firmly in place. However, the new rules are designed to ensure that these standards are applied fairly and in a way that reflects the actual level of risk involved.
Why This Matters
This updated Directive balances two key goals: protecting the financial system from abuse, and making everyday banking simpler and more accessible, especially for lower-risk customers such as pensioners and small businesses. It reflects a broader trend across Europe to make financial compliance more proportionate, efficient, and user-friendly.
What's New in the Directive?
The new rules introduce several practical changes for how banks and other financial institutions manage customer relationships. These changes include:
- Flexible Customer Reviews – Banks can now review and refresh customer information based on risk level, instead of following a rigid schedule. For example, for low-risk clients, such as retirees receiving only a pension, such reviews can be less frequent.
- Simplified Documentation – Instead of asking for original documents, banks can now accept certified copies. This makes compliance reviews faster, and more convenient.
- Smarter Use of Existing Information – If a bank already holds reliable information on a customer, it can use that data to meet compliance checks, reducing the need for repeated requests.
- Support for Vulnerable Customers – The Directive includes special provisions for people with health problems or disabilities, allowing alternative forms of verification and demonstrating sensitivity to their circumstances.
- More Options for Verification – Banks can accept certifications from trusted third parties, such as government agencies, and use digital documents. This ensures faster and more accessible digital banking processes.
Impact of the Directive
The provisions of the new Directive are expected to reduce unnecessary bureaucracy and delays for customers, while still keeping strong protections in place against financial crime. By allowing banks to focus more closely on higher-risk cases, the system becomes both more secure and more efficient.
For businesses and citizens alike, the new Directive should mean better customer experience, and a more transparent relationship with financial institutions. At the same time, it strengthens the reputation of Cyprus as a credible and responsible financial hub.
The Central Bank of Cyprus has stated that these measures will help simplify procedures, support economic activity, and improve public trust in the financial system, without compromising on safety.
The new Directive can be accessed here (in Greek language only), and the relevant announcement from the Central Bank of Cyprus can be accessed here.
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.
