AML Compliance – Guidelines to Counter Financial Crimes in Cyprus

Money laundering is increasing at a high pace in every industry across the globe. Similarly, financial crimes in Cyprus are also undergoing a noticeable rise making its prevention a top priority for regulatory bodies. Bad actors and crime groups are massively active in exploiting financial systems. Therefore, AML compliance is becoming more demanding within Cyprus.

As per Cyprus’ Unit for Combatting Money Laundering (MOKAS) banks and other financial industries need to build stronger AML verification mechanisms. This involves performing thorough identity verification, risk scoring, and due diligence of customers. Furthermore, Anti-Money Laundering (AML) regulations oblige financial institutions to bring in adequate solutions while they capitalize on potential opportunities. The blog covers MOKAS’s requirements and ways how institutions can stay compliant. 

AML Security and Guidelines by MOKAS – A Detailed Insight 

Cyprus is a European Union (EU)’s member state which increases its liability to stay put with the requirements put forth in this regulatory watchdog’s anti-money laundering directives. Therefore, the country is seen updating its legislation to mandate financial businesses adhere their operations with legal obligations.

Institutions are failing to establish AML security measures due to inadequate processing mechanisms. Evident from the incident where this country served as a safe haven for Russian money laundering. Considering the increase in flow of illicit funds through its financial systems, the Central Bank of Cyprus (CBC) imposed a fine of €790,000 on the Bank of Cyprus.

Considering the increase in money laundering threats, MOKAS monitors businesses to make sure they align their operations per AML compliance. This regulatory body has been serving as the watchdog responsible for recording, analyzing, and proclaiming suspicious activities. Furthermore, MOKAS is responsible for playing the following roles:

  • Cross-validating customers’ identity proof within regional and foreign records
  • Collecting, categorizing, and evaluating client details from the financial institutions in accordance with the AML screening regulations
  • Ensuring proper implementation of the EU’s directives
  • Recording and exchanging identity information with other Financial Intelligence Units (FIUs)
  • Supervising transactions to detect and report suspicious activities as well as financial behaviors  
  • Assuring that financial institutions’ money laundering countermeasures are in line with AML compliance 
  • Providing training to employees, financial professionals, banking officials, law enforcers, and other personnel regarding present anti-money laundering regulations 

Increase in AML Verification Control Across the North of Cyprus

The 1999 Prevention of Money Laundering Law of the Turkish Republic of Northern Cyprus (TRNC) has been active in this country for over 20 years. However, the unexpected increase in financial criminal threats is grasping strict regulatory scrutiny. This is further forcing the supervisory watchdogs to toughen their stance on AML compliance. In wake of this, the Central Bank of the TRNC is increasing efforts to fight financial crimes such as organized syndicates, terrorist funding, and much more. 

The new AML monitoring requirements are aligned with the EU directives and FATF regulations. Therefore, anti-money laundering solutions are enabling financial institutions within Cyprus to stay put with guidelines of MOKAS. They also assist in filling the gaps within their internal cybersecurity controls. In case of non-compliance, businesses will face sanctions, hefty fines, and stringent penalties.

AML Systems – Solutions for Financial Institutions to Ensure Compliance

As per anti money laundering standards set by MOKAS, Financial Institutions (FIs)  and Designated Non-Financial Businesses and Professions (DNFBPs) require robust countermeasures for skyrocketing financial crimes. These efficient digital onboarding and money laundering combating solutions will not only counter transfer of illicit funds but also make way for assuring compliance. The following measures further help financial institutions to combat criminal attempts while staying in line with regulatory obligations:

  1. Implementing requirements put forth in Know Your Customer (KYC) standards for effective anti-money laundering screening of customers. 
  2. Collecting, recording, and maintaining records as well as transaction of clients.
  3. Inclusion of internal mechanisms and risk assessment for AML/CTF.
  4. Building adequate AML security controls for suspicious detection and reporting such activities to regulatory bodies. 
  5. Integrating automated AML solutions for preventing high-risk transactions.
  6. Training employees and professionals regarding AML/CTF regulations and handling of fund transfers.

Cyprus is experiencing a tremendous increase in financial crimes ever since it became the notorious banking hub for Russian money launderers. Furthermore, criminals are using different strategies such as identity theft, hiding sources of funds for concealing proceeds of crimes, and much more to escape AML compliance. Hence, digital onboarding solutions are enabling financial industries to counter fraud risks. 

End Notes

Considering the dramatic increase in financial crimes, regulatory watchdogs are placing strict anti-money laundering checks over Cyprus. Therefore, institutions require advanced countermeasures to deter the sophisticated efforts of criminals. Further aiding in this are the AML solutions that provide real-time identification, risk scoring, and suspiciousness detection. Hence, Cyprus can be a safe haven for legitimate financial dealings.

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