Cyprus has launched a public consultation on a draft amendment to its anti-money laundering (AML) legislation, proposing a significant overhaul of how the real estate sector is supervised for money laundering and terrorist financing risks.

The proposed law, titled the Prevention and Suppression of Money Laundering and Terrorist Financing (Amending) Law of 2026, was prepared by the Ministry of Finance in cooperation with other state authorities and is open for public comments until 14 February 2026.

At the core of the amendment is the transfer of preventive AML/CFT supervision in the real estate sector from the Council for the Registration of Real Estate Agents to the Tax Department. Supervision would also be expanded to cover all professionals involved in the purchase or sale of real estate, or those representing buyers or sellers on a professional basis, unless they are already supervised by another competent authority.

The reform follows a 2022 decision of the Council of Ministers and was developed through an ad hoc working group of the Advisory Authority for Combating Money Laundering and Terrorist Financing, involving the Ministry of Finance, the Ministry of Interior, the Central Bank of Cyprus, the Tax Department and MOKAS.

According to the Ministry of Finance, the need for stricter preventive measures is supported by Cyprus’ National Risk Assessment on money laundering and terrorist financing, the MONEYVAL Mutual Evaluation Report of the Council of Europe, and the experience of competent authorities. At EU level, the European Commission’s 2022 EU-wide risk assessment also identified real estate as a sector particularly exposed to money laundering and tax-related crimes.

The proposed amendment is intended to facilitate Cyprus’ transition to the new EU AML framework. Under Regulation (EU) 2024/1624 and Directive (EU) 2024/1640, which will apply from July 2027, AML obligations and public-sector supervision will explicitly extend to real estate agents and other professionals involved in property transactions. The directive requires AML supervision to be exercised by a public authority.

Under the new regime, the Tax Department will assume responsibility for AML/CFT supervision of real estate professionals, while entities already supervised by other authorities—such as credit institutions overseen by the Central Bank of Cyprus—will remain under their existing supervisory frameworks.

The Ministry of Finance argues that the Tax Department is well placed to take on this role due to its involvement in property transactions, existing AML responsibilities in other high-risk sectors, and lower implementation costs compared with establishing a new authority. Similar supervisory models are applied in several EU member states, including Greece, the Netherlands and Luxembourg.

Stakeholders and interested parties are invited to submit their views on the draft legislation as part of the public consultation process.