At its recent 2006 plenary meeting, the Council of Europe's Moneyval Committee approved the mutual evaluation report on Cyprus's anti-money-laundering measures prepared after a visit to Cyprus in April 2005.
This is the third time the Moneyval committee has evaluated Cyprus. In the previous two evaluations, carried out in 1998 and 2001, Cyprus was praised for the legal framework it had put in place and for its comprehensive anti-money-laundering procedures.
The latest assessment report is the first to be based on the exacting methodology developed in 2004 by the Financial Action Task Force (FATF) and the International Monetary Fund. It is extremely thorough and detailed and covers not only the financial services sector but also designated non-financial business and professions such as accountants, lawyers, real estate agents, and trust and company service providers.
The report commends the considerable progress made since the previous evaluation and praises the authorities for the resolve they have shown to reduce the vulnerability of the financial services sector and the designated non-financial business and professions to money laundering and misuse for financing terrorism.
In an appendix to the report, Cyprus is rated for compliance with each of the FATF's 40 Recommendations on Money Laundering and nine Special Recommendations on Terrorist Financing. The ratings are based on five levels: compliant, largely compliant, partially compliant, non-compliant and not applicable.
Cyprus was found to be fully compliant in 17 areas and largely compliant in a further 22. It was partially compliant in the remaining 10 areas, with no instances of non-compliance.
Including Cyprus, nine countries have now been assessed under the new methodology, the others being Australia, Belgium, Hungary, Ireland, Norway, Slovenia, Sweden and Switzerland. Cyprus's ratings compare favourably with the rest. Cyprus is the only country of the nine assessed that has no non-compliant ratings. Australia has 10, Ireland eight, Sweden five, Norway four, Switzerland three, Slovenia two and Belgium and Hungary one each. On a weighted average basis, assigning three points for each compliant score, two for largely compliant, one for partially compliant and zero for non-compliant or not applicable, Cyprus ranks third overall behind Hungary and Belgium, comfortably ahead of the other six countries.
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