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Cyprus still carries money laundering stigma, stakeholders say

January 16, 2020 at 9:29am
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Despite significant progress steps taken by Cyprus over the recent years in combating money laundering the stigma is still there, stakeholders said on Wednesday  during a meeting of the House Ethics Commission.

Cyprus has aligned itself with the fourth European directive, amended its laws and shut tax evasion ‘loopholes’ but its reputation is still at stake, head of Cyprus Securities and Exchange Commission Demetra Kalogerou told MPs.

She also recommended the establishment of a body to record the changes and improvements in legislation already made as well as further measures to be taken in the future.

“We have to promote all action taken abroad, it will take some years for Cyprus to shed the stigma,” she added.

Assistant Commissioner for Taxation Soteris Markides said that technology makes it difficult for the department to identify cases of tax evasion.

He also stressed the need for modern electronic systems, noting that the department’s new system is expected to be implemented in 2021. At the same time, he expressed concern over electronic transactions the department cannot control.

In the meantime, the Department of Taxation has exchanged tax information with 102 tax authorities of other countries. Specifically, Cyprus provided information to 63 countries and received information from 39 countries.

A representative of the island’s association of commercial banks said significant steps were taken to modernise their surveillance system, pointing out that there are correspondent banks for overseas customers. At the same time, The Institute of Certified Public Accountants of Cyprus have also updated their regulations.

Cyprus has to harmonise itself with the fifth European directive on combating tax evasion by the end of the year.

A Moneyval report of the Council of Europe for the Republic of Cyprus is expected in February and the Central Bank of Cyprus as well as other supervisory authorities expecting it to be positive.

A Finance Ministry spokesman told MPs that a recent press release by the island’s Advisory Authority for Combatting Money Laundering aid that data obtained was satisfactory. He also said that evaluations are difficult but useful.

By Eleftheria Paizanou

 

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