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Cash flows to Cyprus increase, amid money laundering fears

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MPs on Wednesday repeated a variation of ‘show me the money’ during a House ethics committee discussing the amount of cash flowing into the country, amid fears of ongoing money laundering.

Deputy police chief Demetris Demetriou, since August 2023, said there was a lot of activity with large sums of money flowing into Cyprus.

Currently there are four cases before court for a sum of €10m. Investigations are still ongoing for the other cases, he said.

Data shared to deputies revealed that €90 million out of €101.6 million which was declared, have no prosecutions before court.

Permanent secretary at the finance ministry George Panteli said that between January 1, 2021 until March 2024, there were 1077 cash declarations made at airport customs offices, amounting to €119m.

Of these, 825 were made between January 2023 and March 2024 to the sum of €105m.

From the 825, there are 336 that police and the anti-money laundering unit (Mokas) are investigating, amounting to €101.6m, or 96 per cent.

According to Demetriou, a huge case is being investigated with another EU country’s involvement and Eurojust.

Mokas chief Maria Kyrmizi Antoniou told deputies that 17 cases which were flagged as suspicious was shared to police for criminal investigations. There were 10 of those which led to alerting foreign counterparts.

Asked if Mokas takes up investigation on their own initiative, Antoniou said they start with reports of suspicious transactions the department receives.

Indicatively, there were reports for around 2,000 cases in 2023, which are examined by order of severity.

Real estate

Tax commissioner Sotiris Markides confirmed there were plenty of developers that take cash for their property. In 2021 for instance, there were 1,200 developers who confirmed they had cash transactions worth more than €10,000.

He underlined he was waiting for a list from the customs department of all those who said they came to Cyprus with cash so as to investigate.

Customs chief Theodora Demetriou underlined that when making cash declarations, individuals must fill out the source, destination and purpose of the cash. Most say it is for the purchase of real estate. Nonetheless, the customs department does not have the means to further investigate on site, she said.

Interior ministry official Anastasia Kamenou said legal entities are monitored for high-risk flags for money laundering, terrorist funding and tax avoidance.

This includes anonymous donations, large sums of cash transfers and other risk factors.

In the beginning of 2023, there were 25 per cent of entities designated as high risk. Cases are then sent on to Mokas, police and tax department.

Lack of cooperation

Disy MP and committee chairman Demetris Demetriou said it was evident there was poor coordination between state services on handling inflows of cash into the Republic.

“We are looking to find where more than €90m in cash has gone. Is this money in the country? Was it invested in the country? Has it left the country? Has it gone to the north? We have not received any answers.”

Demetriou added there was a plan to submit a bill where the maximum amount of cash for someone to use to purchase something to be maxed at €1,000.

At the moment, there is no limit, as long as more than €10,000 cash purchases are declared to the tax commissioner.

Akel MP Irene Charalambides underscored that “it is very sad that after what we went through in this country, we keep finding black holes.

“What money is coming through marinas? Why does someone who wants to bring money to Cyprus not do so through official channels?”

She too lamented that authorities were not able to give information on the matter.

 

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