CBC: Over 125,000 bank accounts terminated since 2018

As a result of its targeted supervisory actions, from the end of 2018 until now, credit institutions terminated relationships with 42,728 shell companies and closed 125,782 bank accounts, the Central Bank of Cyprus (CBC) has said.

In an announcement in the wake of the "Cyprus Confidential" report, the CBC reaffirmed its commitment to combating money laundering. Responding to recent reports in both international and local media, the CBC outlined its active efforts to address alleged wrongdoings related to credit institutions.

The statement underscores the CBC's ongoing initiatives to strengthen its Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) supervisory capacity.

"As a result of the CBC's targeted supervisory actions, from the end of 2018 until now, credit institutions terminated relationships with 42,728 shell companies and closed 125,782 bank accounts," the statement notes.

In order to assess the level of compliance of credit institutions with the AML/CFT legal and regulatory framework, the CBC points out that it conducts in-depth onsite inspections, ad hoc inspections, as well as ongoing off-site monitoring.

In 2019, it is added, recognising the evolving landscape of financial regulations, the CBC initiated a comprehensive recruiting process resulting in a remarkable 50% increase in the headcount of its AML/CFT department by 2022. Since 2015, the CBC has imposed fines relating to AML/CFT inspections in 13 cases.

As the institution responsible for ensuring compliance with targeted financial sanctions imposed by the United Nations' Security Council and the EU, the CBC says that it continues its efforts to strengthen the level of compliance by supervised entities.

In 2023, the CBC has partnered with a reputable firm specialising in AML/CFT solutions. This collaboration aims to test and validate sanction screening and transactions monitoring systems. The CBC is currently in the final stages of assessing the sanctions screening systems of its supervised entities, it adds.

CBC also points out that Cyprus is assessed by Moneyval, which follows the FATF methodology. Within the 5th round of Moneyval evaluations, Cyprus' assessment was completed and the Mutual Evaluation Report (MER) was published in 2020. The assessment, conducted on the basis of the robust FATF methodology by a team of international experts, reflected the measures adopted by Cyprus in the fight against money laundering and terrorism financing in recent years and identified areas where further enhancements and improvements were needed. In particular, as far as the financial institutions are concerned, the assessors "have expressed both orally and in writing the significance of the work performed by the CBC."