Calls for resignation over money laundering oversight

MPs on Wednesday raised the alarm over whether Cyprus is actually carrying out its duties on money laundering compliance, after it emerged the police, money laundering unit (Mokas) and customs office have a glaring gap in their coordination and communication.

During the House ethics committee, MPs heard over €160 million in cash has flowed into Cyprus in the past four years, as they lambasted the three authorities over their apparent inaction on investigations surrounding tax evasion and money laundering.

“The heads of these departments should have already resigned,” Akel MP Irene Charalambides charged.

The discussion was sparked over the recent arrest of a 31-year-old Ukrainian woman who now faces 60 counts of money-laundering related charges. She is believed to have brought €8 million in cash to the country, through a number of trips in the past year.

The case has raised questions over the country’s oversight, with Charalambides saying the incident had laid bare the country’s negligence.

Diko MP Zacharias Koulias requested the session was held behind closed doors after a representative for the attorney-general’s office called on MPs to remain vague so as not to affect the woman’s right to innocence as she awaits court proceedings.

MPs from Disy, Diko and Depa supported the motion, with Akel and independent MP Alexandra Attalides being the minority votes in opposition.

‘Strange meddling’

Speaking to the press after the session, Charalambides raised questions over a “strange” meeting which took place in 2023. She claimed police ordered the customs office not to relay any information to Mokas directly, but instead have everything go through police instead.

The MP said this instruction was given verbally and was in no way supported by the law.

No representative of the police, Mokas or customs office attended the session or commented on the claims.

According to Charalambides, the customs office hands a USB to Mokas every three months, detailing any declared sums of cash. This appears to be their only form of communication with an obvious time lag, she specified.

The MP questioned why “we cannot do the obvious” and have authorities be able to see the information in real time, linked to passport numbers.

Attalides called for an investigation on institutionalised corruption, charging there is “a huge problem where oversight bodies are concerned”.

Although government officials and politicians tell journalists and international organisations that Cyprus has taken steps to combat money laundering, they “forget” to refer to how effective the legal framework is – or isn’t.

She charged there is no proper oversight on how well the law might be implemented or on “key individuals”.

With financial organisations now having a tough framework on accepting cash, information on €160m can only lead to one conclusion she declared: “there is a shadow economy.”

‘Criminal’ inaction          

Committee chair and Disy MP Demetris Demetriou said more than €100m in cash has repeatedly entered the country.

“Unfortunately, there is a complete lack of coordination between the relevant state services, and a complete absence of any form of reflexes from the customs offices.”

Where Mokas and police are concerned, there is an obvious “inaction” on their part.

Demetriou specified it appears police do not have a clear picture on the matter and the customs office just gave the requested reports to Mokas.

While Mokas may have investigated individual cases of possible money laundering “it didn’t actually sit down and add up the amounts to say person X brought Y amount to Cyprus.”

He described this as “criminal”.

Asked whether there is a question of legislation to create a mechanism to coordinate the three agencies, he said he did not think the issue was a matter of lack of legislation.

“It is the lack of cooperation and initiative by those in charge,” he said.