Costas Stamatiou was one of a distinguished roster of speakers at the ICC International Financial Crime Forum held in Malta on 5 and 6 June 2013. Organised by the ICC Financial Investigation Bureau and co-sponsored by the Malta Financial Services Authority and the Malta Financial Intelligence Analysis Unit, the unique approach of this specialised interactive forum presents delegates with the latest fraud trends and developments, and assists them in dealing with financial crime, money laundering and counter terrorism financing issues.

Costas examined the vulnerability of offshore locations for washing the profits of fraud. Within this context he analysed the applicability of the EU Money Laundering Directive in Cyprus with reference to the conclusions of the recent Moneyval and Deloitte reports.

Nothing unique to Cyprus: As noted in Moneyval's report "A number of individual features of international banking business [are] conducted in/through Cyprus, none of which are unique to Cyprus and many of which can be found in banking systems worldwide."

Moneyval's report further revealed that "In line with the CBC Directive, banks confirmed that they identify customers in all cases and do not operate anonymous or numbered accounts. For international business, most customers are corporate entities and supporting documentation is obtained to confirm the identification of the customer, the directors and the owners. Although some of these structures are complex and can involve legal entities in two or more jurisdictions, there was a consistency in the responses of the banks that they are required to, and do in practice, identify all relevant parties through all layers of these structures. The assessors did not come upon any examples to suggest lack of understanding or weak compliance on this aspect."

Deloitte's report further revealed that "In the audit for compliance with the CDD requirements of the Cyprus legal framework, it is worthy of note that these requirements are more detailed, and to a certain extent prescriptive, than in many other jurisdictions, including other EU Member States that similarly have implemented the requirements of the Third Money Laundering Directive."

Not only prevention but cure as well: Costas emphasised that in addition to the statutory powers enjoyed by the Attorney General's office for combating money laundering and other criminal offences, Cyprus courts have the power on application of victims of fraud to assist with the tracing, freezing and recovery of assets. The armoury of Cyprus courts includes the discretionary power to issue the following types of provisional measures:

  • freezing orders (Mareva injunctions) to prevent further alienation of assets;
  • Norwich Pharmacal disclosure orders to identify wrongdoers and current location of alienated assets, if unknown;
  • gagging orders to prohibit the "tipping-off" of so-far unidentified wrongdoers and co-conspirators, hence limiting the risks of further alienation of assets; and
  • search orders (Anton Piller orders) to prevent the destruction of evidence.

Extracts of the Moneyval and Deloitte reports are available on the Central Bank of Cyprus website

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