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Cyprus banks step up fight against money laundering

May 31, 2018 at 9:44am
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Local banks have closed or suspended accounts of foreign clients as they step up efforts to combat money laundering.

Bank of Cyprus has closed or suspended the accounts of 5359 Russian and Ukrainian clients, leading to a loss of €3.6b in turnover and a corresponding impact on revenue and profits. The BoC has also slashed the number of intermediaries to 324 from 1601 and rejected 2937 prospective new clients in the period 2015 to 2017. Over the same period, the number of Russian and Ukrainian clients fell by 60% while deposits from these countries at the end of 2017 accounted for only 8.34% of total deposits.

Hellenic Bank has also moved to minimise the risk of money laundering and financial crime by tightening up procedures in line with a strict compliance policy. Among other, it has reduced deposits from higher risk countries by 45% since 2014. They now represent 15% of all deposits. It has also halved incoming payments from these countries since 2014. They now account for only 3% of the total. International legal entities have been reduced by 55%.

As a result of action taken by RCB Bank Cyprus, the number of clients who are Cyprus and EU residents now stands at 85%. Since 2015, the share of clients who are resident of Russia and the Commonwealth of Independent States has fallen from 12% to 5%.

Cyprus has been fighting an uphill battle to improve its international reputation regarding effective action against money laundering.