By Yiannis Seitanides
An Institute of Certified Public Accountants of Cyprus investigation has found that five of its members who provided services for Cyprus’ passport-by-investment scheme committed disciplinary offences as regards anti-money laundering rules. All five are legal entities, not individuals.
Three of the five are named in the Kalogirou report into the scheme. The other two were identified following an investigation into the accounting firms of Cypriot companies cited in the Pandora Papers.
In the first group of three, the file has been prepared for one company, while the process is ongoing for the other two. The attorney general’s office has been informed and has requested the files in order to examine whether the disciplinary offences relate to its own criminal cases under investigation (based on the material of the Kalogirou report) or whether there is evidence that can be used in its own investigations.
The files were forwarded to the legal service on Wednesday. At the same time, the institute has requested a legal opinion on whether it can proceed with its own disciplinary proceedings while criminal proceedings are ongoing.
The legal service is considering the question and its response will determine the course of the three cases that arose from the Kalogirou report, while disciplinary proceedings will proceed as planned in the other two cases.
Possible penalties range from a reprimand and a fine to the revocation of a professional licence.
The three-member committee headed by Dimitra Kalogirou (then chairwoman of the Securities and Exchange Commission) had documented improper practices. It had called for each of the promoters/service providers to be audited by their respective regulators as to whether they had exercised due diligence in entering into client relationships with investors and whether they had conducted sufficient checks to ensure that clients’ funds did not derive from illegal activities.
The finding states that “the examination of the files, as well as the information received by the three-member committee from the various agencies, strongly suggests that due diligence was not carried out by the service providers/promoters”.