Cyprus

Last updated: 07/04/2008

CENTRAL AUTHORITY FOR REPORTING

Unit for Combating Money Laundering (MOKAS), at the Attorney General’s Office.

ANTI-MONEY LAUNDERING REGULATOR(S)

Central Bank
The Authority for the Supervision and Development of Cooperative Societies
The Securities and Exchange Commission
The Insurance Commissioner
The Council of the Institute of Certified Public Accountants of Cyprus (for accountants)
The Council of the Cyprus Bar Association (for lawyers)
The Unit for Combating Money Laundering (for estate agents and dealers in precious stones and metals)

HAS THE THIRD EU MONEY LAUNDERING DIRECTIVE BEEN IMPLEMENTED? IF NOT, WHEN IS IT EXPECTED TO BE IMPLEMENTED?

Yes, it was implemented with the enactment of the Prevention and Suppression of Money Laundering Activities Law (No. 188(I)/2007) on 31.12.2007 with effect from 1.1.2008 (the “AML Law”)

LIST THE LAWS REGARDING ANTI-MONEY LAUNDERING, INDICATING WHICH LAWS ARE APPLICABLE TO LAWYERS

Prevention and Suppression of Money Laundering Activities Law of 2007.

The Prevention and Suppression of Money Laundering Activities Law, 1996-2004. (Law No. 61(I) of 1996, as amended with Laws No. 25(I) of 1997, 41(I) of 1998, 120(I) of 2000, 18(I) of 2003 and 185(I) of 2004). These laws were consolidated and amended with the enactment of the AML Law.

ARE VISITING LAWYERS SUBJECT TO LOCAL LAWS REGARDING ANTI-MONEY LAUNDERING, AND, IF SO, TO WHAT EXTENT?

Yes, insofar as they conduct business in Cyprus.

LIST ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS (FOR EXAMPLE, LAW SOCIETY OR BAR ASSOCIATION GUIDELINES) CURRENTLY IN PLACE

The Cyprus Bar Association issues Money Laundering Guidance Notes

MOKAS has developed an educational program for lawyers and accountants.

IS THE LAW SOCIETY/BAR ASSOCIATION INVOLVED IN SUPERVISING OR ENFORCING COMPLIANCE WITH ANTI-MONEY LAUNDERING REGULATIONS?

Yes, the Cyprus Bar Association is the Supervisory Authority for lawyers, designated by the Council of Ministers.

DESCRIBE CLIENT DUE DILIGENCE REQUIREMENTS, INCLUDING WHEN IT MUST BE UNDERTAKEN BY LAWYERS

They are described in the Guidance Notes issued by the Cyprus Bar Association.

DOES YOUR COUNTRY FOLLOW A RISK-BASED APPROACH TO CLIENT DUE DILIGENCE BY LAWYERS?

We are in the process of developing a risk-based approach in Cyprus.

ARE THERE ENHANCED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, POLITICALLY EXPOSED PERSONS?

Yes, relevant provisions are contained in the new AML Law.

ARE THERE SIMPLIFIED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, LISTED COMPANIES?

Yes, relevant provisions are contained in the new AML Law.

ARE LAWYERS PERMITTED TO RELY ON THIRD PARTY DUE DILIGENCE? IF YES, PLEASE DESCRIBE.

Yes, if obtained from a country which applies AML measures equivalent to the EU standards.

WHEN IS A LAWYER UNDER AN OBLIGATION TO REPORT SUSPICIOUS TRANSACTIONS?

Lawyers have a responsibility to report directly to the FIU of Cyprus (MOKAS) suspicious activities that they know or suspect to be connected with criminal activities and that come to their knowledge in the course of undertaking their professional activities.

DOES ATTORNEY/CLIENT PRIVILEGE AND/OR DUTIES OF CONFIDENTIALITY PROVIDE A DEFENCE OR PARTIAL/TOTAL EXCEPTION TO THE REQUIREMENT TO REPORT SUSPICIOUS TRANSACTIONS?

Lawyers are not bound to disclose “privileged information.”

“Privileged information” means:

Communication between an advocate and a client for the purpose of obtaining professional legal advice or professional legal services in relation to legal proceedings whether these have commenced or not, which would in any legal proceedings be protected from disclosure by virtue of the privilege of confidentiality under the law in force at the relevant time; provided that a communication between an advocate and a client for the purposes of committing a prescribed offence shall not constitute privileged information; provided that a communication between an advocate and a client for the purposes of committing a prescribed offence shall not constitute privileged information.

DOES LOCAL LAW PROVIDE ANY CRIMINAL AND/OR CIVIL INDEMNITY TO A LAWYER WHO HAS REPORTED A SUSPICIOUS TRANSACTION?

Reporting entities have immunity from any claim for breach of any duty of confidence. This immunity extends to the initial disclosure of the suspicion and to the information on which it is based.

ONCE A SUSPICIOUS TRANSACTION REPORT HAS BEEN FILED, IS A LAWYER ALLOWED TO PROCEED WITH THE LEGAL ADVICE/TRANSACTION, AND, IF SO, MUST CONSENT FROM AUTHORITIES BE OBTAINED FIRST?

They must first get advice, consent or guidance from the FIU.

IS THERE A TIPPING-OFF PROHIBITION? IF YES, PLEASE DESCRIBE.

Yes, it is punishable with imprisonment for up to five years.

“Tipping off” is defined in the AML Law as follows:

“Any person who discloses that information or other relevant material regarding knowledge or suspicion of money laundering has been submitted to the FIU or makes a disclosurewhich may impede or prejudice the interrogation and investigation carried out in respect of prescribed offences or the ascertainment of proceeds, knowing or suspecting that the said interrogation and investigation are taking place, shall be guilty of an offence punishable by imprisonment not exceeding five years.”

DESCRIBE ANY RESTRICTIONS ON ACCEPTING A NEW CLIENT

No information available.

ARE THERE ONGOING MONITORING REQUIREMENTS FOR EXISTING CLIENTS? IF YES, PLEASE DESCRIBE

No information available.

DESCRIBE ANY OTHER WAYS IN WHICH LAWYERS ARE AFFECTED BY ANTI-MONEY LAUNDERING LEGISLATION

No information available.

HAVE LAWYERS IN YOUR JURISDICTION BEEN IMPLICATED IN MONEY LAUNDERING, INCLUDING ANY TYPE OF COMPLAINT, ARREST OR PROSECUTION?

Some lawyers have been requested to give information to the FIU.

HAS THE FINANCIAL ACTION TASK FORCE (FATF) CONDUCTED A MUTUAL EVALUATION OF THIS COUNTRY, AND, IF SO, WHAT WERE THE FINDINGS CONCERNING LAWYERS’ COMPLIANCE WITH THE FATF 40+9 RECOMMENDATIONS?

Cyprus is not a member of the FATF. It is a member of the Moneyval Committee of the Council of Europe, which is an associated member of the FATF. Cyprus’ anti money laundering system has been assessed three times by the Moneyval Committee and the findings for lawyers are that there is compliance with the FATF 40+9 Recommendations.

Information provided by:

Eva Rossidou-Papakyriacou
Senior Counsel of the Republic
Head of the Unit for Combating Money Laundering

Koulia Vakis
Chief Executive Officer
Cyprus Bar Association
Nicosia, Cyprus

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Sources

Chris Hamblin, “World Bank publishes laundering report on Northern Cyprus”, 4 January 2007, www.complinet.com
Marinella Kilikitas, “Jurisdiction update: Cyprus”, 6 March 2008, www.complinet.com.