Cyprus has bolstered its efforts to combat money laundering and the financing of terrorism, according to the latest report by Moneyval, the Council of Europe’s monitoring body. The Cyprus Securities and Exchange Commission (CySEC) has hailed this report as a “vote of confidence” in the country’s financial regulatory framework, particularly in the realm of cryptocurrencies.
The Moneyval report highlights significant improvements in Cyprus’s compliance with the Financial Action Task Force’s (FATF) Recommendation 15, which pertains to new technologies, and Recommendation 8, related to non-profit organizations. Notably, Cyprus’s compliance with Recommendation 15 has been upgraded from “partially compliant” to “largely compliant.”
CySEC Chairman George Theocharides welcomed the findings in Moneyval’s 3rd Enhanced Follow-up Report, stating, “Moneyval’s upgrade is a clear vote of confidence in the effectiveness of financial regulation in Cyprus, particularly in relation to Crypto-Asset Services Providers.”
The report acknowledges enhancements in Cyprus’s virtual asset service providers regime, despite minor deficiencies. It also recognizes steps taken to assess terrorism financing risk within the non-profit sector, although these measures are not yet fully implemented. Recommendation 8 remains “partly compliant,” but the progress in Recommendation 15 reflects a major improvement.
Moneyval assesses compliance with international standards aimed at countering money laundering and the financing of terrorism and weapons proliferation. The report concludes that Cyprus has addressed most technical compliance shortcomings identified in the 2019 Mutual Evaluation Report. Currently, Cyprus has 16 recommendations rated as compliant, 21 as largely compliant, and 3 as partially compliant out of the 40 FATF Recommendations.
Cyprus is expected to report further progress to Moneyval by May 2025. Dr. Theocharides emphasized CySEC’s commitment to ensuring full compliance with FATF Recommendation 15 and reinforcing the country’s anti-money laundering and counter-terrorist financing (AML/CTF) system.
The Moneyval report underscores Cyprus’s advancements in technical compliance with FATF standards, particularly for new technologies. The upgrade for Recommendation 15 highlights the extensive measures taken by CySEC and other authorities to mitigate risks and enhance compliance in the crypto-assets sector.
CySEC has implemented significant measures to improve compliance among Crypto-Asset Services Providers (CASPs). These include using blockchain analytical tools during initial applications and subsequent changes, as well as ongoing supervision of CASPs. The report follows the approval of Law 98(I)/2023 by the Cypriot Parliament, amending existing AML/CFT laws to align with Moneyval and FATF recommendations.
The legislative changes and CySEC directives aim to further solidify Cyprus’s position in the next evaluation of Recommendation 15, demonstrating the country’s dedication to maintaining robust financial regulations and combating illicit financial activities.
Source: https://www.financialmirror.com/2024/05/03/moneyval-praises-cyprus-progress-on-aml-crypto-regulation/