The findings of the Cyprus Confidential investigation by the International Consortium of Investigative Journalists will be the focus of a discussion in the Plenary of the European Parliament next Wednesday. This session, scheduled for the afternoon in Strasbourg, will include representatives from the Commission and the Council of the EU. Notably, the Parliament does not plan to issue a resolution following this discussion.

According to a press statement from the European Parliament, which was issued after finalizing the agenda for the 20-23 November plenary, MEPs are preparing to discuss counter-measures in response to recent revelations. These revelations involve money laundering and the evasion of sanctions against Russia in Cyprus.

The press release elaborates, “The latest investigation by the International Consortium of Investigative Journalists (ICIJ) has uncovered alleged involvement of Cypriot investment firms and banks in concealing the assets of sanctioned Russian oligarchs and billionaires.” It further states, “MEPs are poised to debate with the Council and the Commission on strategies to urgently and effectively close all loopholes in the financial system. They also aim to expedite ongoing negotiations with member states to tighten anti-money laundering regulations.”

Meanwhile, following its targeted supervisory actions from late 2018 to the present, the Central Bank of Cyprus (CBC) reported on Thursday that credit institutions have terminated relationships with 42,728 shell companies and closed 125,782 bank accounts.

In response to the "Cyprus Confidential" investigative report, the CBC issued a statement reaffirming its dedication to combating money laundering. Addressing recent coverage in both international and local media, the CBC outlined its proactive measures to rectify alleged misconduct linked to credit institutions.

The statement highlights the CBC's ongoing efforts to bolster its Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) supervisory capacity. "As a result of our targeted supervisory actions, since the end of 2018, credit institutions have severed ties with 42,728 shell companies and shut down 125,782 bank accounts," the statement reads.

To gauge credit institutions' adherence to AML/CFT legal and regulatory frameworks, the CBC conducts thorough onsite inspections, ad hoc inspections, and continuous off-site monitoring.

In 2019, acknowledging the dynamic nature of financial regulations, the CBC embarked on an extensive recruitment drive. By 2022, this effort led to a significant 50% increase in the AML/CFT department's workforce. Since 2015, the CBC has imposed fines in 13 cases following AML/CFT inspections.

In 2023, the CBC partnered with a renowned firm specializing in AML/CFT solutions. This collaboration aims to rigorously test and evaluate sanctions screening and transaction monitoring systems. The CBC is nearing the completion of its assessment of the sanctions screening systems of its supervised entities.

The CBC also notes that Cyprus is evaluated by Moneyval, which employs the FATF methodology. During the 5th round of MONEYVAL evaluations, Cyprus underwent a comprehensive assessment, with the Mutual Evaluation Report (MER) published in 2020. Conducted by a team of international experts, this assessment used the stringent FATF methodology to appraise Cyprus's measures against money laundering and terrorism financing. It highlighted the country's recent progress and pinpointed areas needing further improvement. Notably, the assessors recognized, both orally and in writing, the significant role played by the CBC, particularly in regulating financial institutions.