Transactions of over €10,000 done in liquid assets, such as cash, are now illegal and punishable by fines or even jail time, under a law passed by parliament on Thursday.

Drafted by Disy MP Demetris Demetriou, the legislation provides for a fine of no more than 10 per cent of the amount paid/received in liquid assets, whenever the transaction is worth over €10,000 or equivalent in another currency.

Such transactions cover not only the purchase of goods and services, but also sales of real estate. In the latter case, in addition to the fine, a court may impose a prison sentence of up to five years.

Liquid assets include cash, transferable securities, commodities used as highly liquid stores of value, as well as prepaid cards.

The law was passed to tighten up controls over money laundering and the possible financing of terrorist activities.

It stipulates an exemption from prosecution in the event that liquid assets – other than coins and banknotes – are unavailable due to force majeure.

In remarks on the House floor, Demetriou referred to the case of the Ukrainian woman who came to Cyprus with €400,000 in cash.

He also cited reports that, over the past three-and-a-half years, some €120 million in cash has passed through customs. No government department has been able to track this money.

The law passed with 24 votes for, and two against. There was some pushback from some MPs. Disy’s Marios Mavrides asked why someone should get into trouble with the law when the money transacted is “legitimate”.