The
business carried out in Cyprus banks is not intrinsically different
from international business carried out in other jurisdictions, a
special assessment of the effectiveness of customer due diligence
measures in Cyprus’ banking sector by MONEYVAL says.
In its assessment the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), notes that it conducted the assessment after being invited to do so in March by Eurogroup Working Group President Thomas Wieser. This was agreed between Cyprus and its Eurogroup partners “as part of the preparations for an adjustment programme that would underpin the assistance” agreed to be granted to the country.
“This evaluation is unique as no other jurisdiction has hitherto submitted to such an exceptional and focused Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) evaluation covering the effectiveness of one part only of its AML/CFT system”, the assessment points out.
In general, it is noted, “the banks interviewed demonstrated high standards of knowledge and experience of AML/CFT issues, an intelligent awareness of the reputational risks they face and a broad commitment to implementing the customer due diligence requirements set out in the law and in subsidiary regulations issued by the Central Bank of Cyprus”.
Implementation of customer due diligence measures as described by the banks appeared strong under most headings.
At the same time the assessment finds that “all banks have procedures in place to determine the identity of the beneficial owner controlling the customer”.
In the conclusions part of the assessment MONEYVAL notes that “overall, it was concluded that while the business carried out in Cyprus is not intrinsically different from international business carried out in other jurisdictions”. At the same time, however it warns that “the magnitude of the business and the combination of various features which are characteristic of the Cypriot regime may raise the degree of cumulative risk to a level that is difficult to manage”.
In its assessment the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), notes that it conducted the assessment after being invited to do so in March by Eurogroup Working Group President Thomas Wieser. This was agreed between Cyprus and its Eurogroup partners “as part of the preparations for an adjustment programme that would underpin the assistance” agreed to be granted to the country.
“This evaluation is unique as no other jurisdiction has hitherto submitted to such an exceptional and focused Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) evaluation covering the effectiveness of one part only of its AML/CFT system”, the assessment points out.
In general, it is noted, “the banks interviewed demonstrated high standards of knowledge and experience of AML/CFT issues, an intelligent awareness of the reputational risks they face and a broad commitment to implementing the customer due diligence requirements set out in the law and in subsidiary regulations issued by the Central Bank of Cyprus”.
Implementation of customer due diligence measures as described by the banks appeared strong under most headings.
At the same time the assessment finds that “all banks have procedures in place to determine the identity of the beneficial owner controlling the customer”.
In the conclusions part of the assessment MONEYVAL notes that “overall, it was concluded that while the business carried out in Cyprus is not intrinsically different from international business carried out in other jurisdictions”. At the same time, however it warns that “the magnitude of the business and the combination of various features which are characteristic of the Cypriot regime may raise the degree of cumulative risk to a level that is difficult to manage”.
It
is highlighted that the Cypriot authorities have taken a range of
legislative measures, in line with Financial Action Task Force (FATF)
and EU standards, to minimize the risk of abuse for ML/FT
purposes.
“Basically sound preventive requirements have been in place for several years at the levels of customer identification, identification of beneficial owner, record-keeping and reporting of suspicious activities”, the assessment says.
It was further noted that “the banks have systems in place to monitor high risk business on an ongoing basis”.
MONEYVAL experts conducted their assessment through interviews. The team selected 13 of the 41 banks, a much larger sample than usual, as it is noted. The banks interviewed represented 71% of the deposits and 76% of the loans in the banking sector. It included the 7 largest banks operating as at December 31, 2012.
The assessment proceeds to make a series of recommendations mainly focusing on further enhancing procedures in place for monitoring high risk international business.
“Basically sound preventive requirements have been in place for several years at the levels of customer identification, identification of beneficial owner, record-keeping and reporting of suspicious activities”, the assessment says.
It was further noted that “the banks have systems in place to monitor high risk business on an ongoing basis”.
MONEYVAL experts conducted their assessment through interviews. The team selected 13 of the 41 banks, a much larger sample than usual, as it is noted. The banks interviewed represented 71% of the deposits and 76% of the loans in the banking sector. It included the 7 largest banks operating as at December 31, 2012.
The assessment proceeds to make a series of recommendations mainly focusing on further enhancing procedures in place for monitoring high risk international business.
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