Sanctions unit in place by end of year

By year’s end Cyprus should have a national financial sanctions implementation unit, bringing the island up to speed with best practices in combating illicit finance, the finance ministry said on Monday.

In a statement, the ministry recalled that on May 30, 2023 Cyprus accepted the UK government’s proposal for cooperation and the provision of technical assistance in the context of the memorandum signed by the two countries and aimed at enhancing their collaboration in matters of combating illicit finance.

Since then, the British High Commission has assigned a project manager and a team of experts, tasked with submitting a report regarding the establishment and operation of a financial sanctions implementation unit in Cyprus. The proposed unit will adopt international best practices and will be modeled on the UK’s own Office of Financial Sanctions Implementation.

Though not named in the statement, Deloitte UK is the project manager.

According to the statement, since August 2023 the project manager has carried out several meetings – virtual or in person – with the finance ministry, the Central Bank of Cyprus, the Securities and Exchange Commission, the police, the anti-money laundering unit, the attorney-general’s office and the Bar Association.

During these meetings the project manager “charted the sanctions ecosystem and how this is being implemented today, and submitted proposals for the creation of a national sanctions implementation unit and for beefing up the existing legislation”.

Under the envisaged timetable, the Cypriot unit is expected to be set up by the end of this year, provided that the bill governing its establishment is passed.

This would “reduce risk and shield the Republic and its reputation”, the statement ended.

Cyprus found itself in hot water for allegedly aiding Russian oligarchs evade sanctions last year, after both the US and UK sanctioned dozens of Cypriot entities and individuals for being financial enablers.

In November 2023 the International Consortium of Investigative Journalists and the Organised Crime and Corruption Reporting Project published ‘Cyprus Confidential’, a slew of reports stating that while the West was trying to block funding for Russia’s war against Ukraine, financial fixers in Cyprus — including accounting powerhouse PwC — scrambled to help oligarchs evade the sanctions.