Marshall Billingslea, the US Treasury Department’s Assistant Secretary for Terrorist Financing, will likely be visiting the island this month or the next, sources have confirmed.
The precise purpose of Billingslea’s trip is not known. Sources told the Cyprus Mail the US official could be coming for a follow-up to his visit here in May last year, or possibly as part of a tour of the region.
For its part, when contacted the US embassy in Nicosia said that as of yet it had no official information on Billingslea visiting the island.
Last year the trip was confirmed to the US embassy 10 days prior to his arrival.
Time-wise Billingslea’s visit may coincide with the upcoming completion of a new country review by Moneyval, the Council of Europe’s permanent monitoring mechanism.
It also comes after the US State Department’s International Narcotics Control Strategy Report (INCSR) for 2018, released in March of this year.
The report stated that “the Cypriot financial system is vulnerable to money laundering by domestic and foreign criminal enterprises and individuals, although proceeds generated abroad pose a greater threat.
“Despite legal requirements to identify beneficial owners to government authorities, some Cypriot law and accounting firms help construct layered corporate entities to mask the identities of financial beneficiaries. The main criminal sources of illicit proceeds are investment fraud, corruption, advance fee fraud, tax evasion, illegal drugs, tobacco smuggling, and human trafficking.”
Elsewhere, the report said organised criminal groups and others have “reportedly” used Cypriot banks to launder proceeds, particularly from Russian and Ukrainian illicit activity.
The INCSR noted also that “the gaming sector may pose new, potential vulnerabilities as the Cypriot authorities adjust to supervising casino-based activity.”
The report was neutral on Cyprus’ investor citizenship programme, noting that the scheme generated US$5.7 billion from 2008 to the end of 2017.
In 2016, Cypriot authorities convicted 28 persons for money laundering offenses, six of whom were prosecuted in cases filed before 2016. In 2017, Cypriot authorities convicted 33 persons for money laundering offences, 22 of whom were prosecuted in cases filed before 2017.
The US report cites the June 2018 circular issued by the Central Bank of Cyprus (CBC) to banks, advising them to be extra vigilant against shell companies and letter-box companies, and to avoid doing business with them.
A refined version of this circular was issued on November 2, 2018 to all credit, payment, and virtual money institutions.
“The circular has resulted in banks closing noncompliant accounts and refusing to open new accounts that fail to meet specified thresholds in the circular. The circular will be incorporated in a legally binding CBC directive, expected to be issued in early 2019.”
The CBC’s initial guidance on shell companies and letterbox outfits was issued in June 2018, only weeks after Billingslea’s visit here.
Following Billingslea’s contacts in Nicosia, the US embassy had released a statement noting that “It is vital that illicit actors know that Cyprus is not open for business.”
The “illicit actors” cited were understood to be Russian businessmen under US sanctions.