Cyprus Money Laundering Summary Misleading, Central Bank SaysPaul Tugwell
A summary of two reports on Cyprus’s track record in combating money laundering doesn’t reflect the main findings of the reports and only gives a description of perceived weaknesses, the Central Bank of Cyprus said.
“The failure to refer to any of the positive aspects mentioned has resulted in erroneous and distorted conclusions,” the Nicosia-based bank said in an e-mailed statement today.
In contrast to the summary, the reports by Deloitte Financial Advisory Srl and Moneyval, the Council of Europe’s money-laundering watchdog, indicate that “anti-money laundering preventative measures and procedures in banks are generally sound” and “generally the banks have a high level of compliance with the statutory and regulatory requirements, which in some areas are more demanding than European Union and international requirements,” the central bank said.
An audit of Cyprus’s attempts to prevent money laundering, required as part of a 10 billion-euro ($12.9 billion) international rescue, showed “systemic deficiencies in the implementation of preventative measures by the audited institutions,” according to a summary of a report by Deloitte’s Italian unit distributed to reporters in Helsinki on May 15.
“There is no reference to, or indication of systemic deficiencies” in the reports as a whole and “the general picture portrayed is not negative,” the central bank said. Cypriot authorities are in the process of providing a detailed response to the International Monetary Fund, the European Commission, the European Central Bank as well as to euro-area finance ministers, it said.
Deloitte’s report found that only four of 27 areas concerning customer due diligence needed further attention while only 29 of over 570,000 transactions analyzed warranted further investigation by the bank, according to the statement. Moneyval established that there was nothing unique to Cyprus in the way international banking business is conducted, the central bank said.
Countries including Germany had insisted that Russia carry some of the cost of rescuing Cyprus, alleging that Russian businesses were using the island to launder money.