The Cyprus Parliament has approved a bill introduced by MP Demetris Demetriou, setting a cap on large cash transactions to combat money laundering and illicit activities. The bill was passed by the Plenary with 24 votes in favor and 2 against and amends the law on preventing and combating money laundering and terrorist financing.

The legislation aligns with European Union regulations aimed at preventing the misuse of financial systems for illegal purposes. Under the new law:

• Transactions involving goods or services can only be settled in cash up to €10,000 or its equivalent in foreign currency.

• This cap also applies to real estate transactions.

• Violators face penalties, including fines of up to 10% of the cash amount involved and a maximum prison sentence of five years.

The definition of cash includes not only physical currency but also bearer negotiable instruments, high-value commodities, and prepaid cards.

>>Opinion: Cash Transaction Cap is a Solid Step. Everyone Should Back It.<<

A clause allows for the temporary suspension of the cap in cases of force majeure, such as unavailability of payment systems other than cash.

During the discussion, MP Demetriou highlighted gaps in oversight, citing a case involving a Ukrainian national who entered Cyprus with €400,000 in cash, which was later reported stolen. Authorities admitted that €120 million in cash had passed through customs over the last 3.5 years, with no knowledge of its final destination.

The law aims to address such issues by introducing stricter controls and improving coordination among relevant authorities.

DISY MP Marios Mavridis questioned the necessity of imprisonment for individuals handling legitimate cash.

Meanwhile, AKEL MP Andreas Pasiourtidis welcomed the measure as a step forward in closing regulatory gaps but emphasized the need for ongoing monitoring and enforcement.

Independent MP Alexandra Attalides expressed concerns over the lack of coordination among authorities, describing the situation as a “lawless vineyard.” She noted that cash transactions facilitate money laundering and support fraudulent enterprises.