CoE’s Money­val sees progress in bank­ing checks

Financial Mirror (Cyprus) - - FRONT PAGE -

The Coun­cil of Europe’s anti-money laun­der­ing watchdog said that Cyprus banks seem to have made sig­nif­i­cant progress in bank­ing checks and will re­port on its next as­sess­ment in Septem­ber.

Money laun­der­ing – the process through which crim­i­nals give an ap­par­ently le­git­i­mate ori­gin to pro­ceeds of crime – is an ex­pand­ing and in­creas­ingly in­ter­na­tional phe­nom­e­non. Cur­rent es­ti­mates of the amount of money laun­dered world­wide range from $500 bln to a stag­ger­ing $1 trln, with dis­as­trous ef­fects on the global econ­omy, es­pe­cially on vul­ner­a­ble, de­vel­op­ing economies.

In its an­nual re­port for 2014, the Com­mit­tee of Ex­perts on the Eval­u­a­tion of Anti-Money Laun­der­ing Mea­sures and the Fi­nanc­ing of Ter­ror­ism (MONEY­VAL) said that it con­ducted two fol­low-up re­ports on the Spe­cial As­sess­ment of Cyprus.

From its pre­vi­ous re­port ion De­cem­ber 2013 when MONEY­VAL said that “while the fo­cus of the (Cen­tral Bank of Cyprus) ef­forts had been on strength­en­ing the fi­nan­cial sys­tem in Cyprus, it was clear that much work still needed to be done” with another re­port sched­uled in March 2014.

The fol­low-up re­port sug­gested that “he out­come of the anal­y­sis con­firmed the ex­pec­ta­tions of the CBC and did not give rise to any par­tic­u­lar ar­eas of con­cern which re­quired a sig­nif­i­cant al­ter­ation to the CBC’s su­per­vi­sory pri­or­i­ties.”

In to­tal, the CBC con­ducted com­pre­hen­sive on­site ex­am­i­na­tions at eleven banks in 2014, but the CoE watchdog added that “while it was noted that mea­sures to strengthen and im­prove AML/CFT pro­grammes had been im­ple­mented, some weak­nesses were iden­ti­fied.”

In June 2014, the CBC con­ducted a short fo­cused visit (1 to 2 days each) at nine banks. Over­all, the banks were found to have been im­ple­ment­ing the rec­om­men­da­tions made in the MONEY­VAL Spe­cial As­sess­ment Re­port.

“Weak­nesses were iden­ti­fied in some ar­eas and guid­ance for i mprove­ment was given to the banks con­cerned. No sanc­tions were im­posed since the pur­pose of these vis­its was mainly to ex­er­cise over­sight over the im­ple­men­ta­tion of the rec­om­men­da­tions,” the re­port said.

The 15 banks (out of a to­tal of 32 banks in Cyprus) which were se­lected by the CBC for closer scru­tiny (ei­ther by re­ceiv­ing a com­pre­hen­sive ex­am­i­na­tion or a fo­cused visit) to­gether com­prised over 85% in to­tal as­sets and 68% in de­posits of the en­tire bank­ing sec­tor. The se­lec­tion was made on the ba­sis of the risk-based off-site tool re­cently im­ple­mented by the CBC.

Fur­ther de­vel­op­ments were re­ported in re­la­tion to the set­ting up a register of ‘black­listed’ third party in­tro­duc­ers. Cyprus has been re­quested to pro­vide a re­port to the 48th Ple­nary in Septem­ber 2015 on fur­ther progress made in re­la­tion to the Spe­cial As­sess­ment.

The gen­eral con­clu­sions of the an­nual re­port said that “the emer­gence of IS in 2014 un­der­lined once again the im­por­tance of its mis­sion on fi­nanc­ing of ter­ror­ism. MONEY­VAL’s work on AML is also cen­tral to the pro­tec­tion of the Rule of Law in Coun­cil of Europe states (and other States and ter­ri­to­ries cov­ered by MONEY­VAL). This is be­cause ef­fec­tive anti-money laun­der­ing mea­sures take the profit out of crime and dis­rupt or­gan­ised crim­i­nal­ity.”

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