The telecoms and post regulator fined the post office €100,000 for violating its obligations after one of its staff stole around 200 mail sacks over a period of some 18 months.
The 37-year-old was arrested in October 2016.
The post office, according to a statement, had violated the terms of its licence, specifically the obligation to protect the confidentiality of the mail and personal data.
The regulator also ruled that the post office violated the obligation to have measures in place so as not to jeopardise national defence and security. There was also violation of the continuous provision of postal services.
The regulator also determined that the department’s policy on management and investigation of complaints was inadequate and inefficient.
There was also an absence of procedures and inadequate monitoring for the proper and efficient operation of the functions in question, the regulator said.
The suspect, who was employed at the mail sorting office at Larnaca airport, was arrested after officers located a bag, three mail sacks with undelivered letters, and five empty sacks during a search of his car.
Another 217 mail sacks with undelivered letters and packages were located in his house, along with a number of empty ones.
The go ahead to return the stolen items was given by police late last month.