Processors On Alert As Cyprus Reviews Anti-Money Laundering Rules  21ST JUL 2015 |

WRITTEN BY:MARK TAYLOR

Payment and e-money companies based in Cyprus have been advised to take note of a major review of the country’s anti-money laundering (AML) laws.

A National Risk Assessment is to be carried out by the Central Bank of Cyprus (CBC), using international standards set by the Financial Action Task Force (FATF), an inter-governmental global watchdog. The CBC said it hoped to restore Cyprus’ reputation as a reputable financial centre. The assessment will be in line with “relevant European directives” and “especially” the 4th Anti-Money Laundering Directive (4th AMLD). Cyprus is one of the first EU jurisdictions to formally announce it is carrying out a jurisdictional risk assessment following the approval of the 4th AMLD in May. There are currently five licensed e-money institutions based in Cyprus, including SafeCharge and Cardpay Europe; two big names offering services to the rest of the EU as part of the terms of their registration, alongside serving Russia and Asia. And there are eight licensed payment institutions headquartered in the country. The National Risk Assessment is expected to be completed by the end of 2016. A finalised report with “concrete” recommendations will be submitted to the government, the Cypriot regulatory authorities and the private sector for implementation. “This exercise, on the basis of the internationally accepted and recognised methodology of the World Bank, will allow for the identification of any deficiencies in the regulatory framework currently in place for combating money laundering and terrorist financing, but also in the effectiveness of the procedures followed by all stakeholders involved in this effort, aiming at taking corrective action,” the CBC said. 1 Topics: Geography: Sectors: Content: “This will contribute significantly towards the reinstatement of Cyprus as a reputable international financial centre and will facilitate substantially the various assessments of our country that are carried out from time to time.” Legal experts have said payment processors and financial institutions in Cyprus should be aware of the review, as their practises are likely to be scrutinised. Dimitris Papoutsis, legal consultant at the Limassol office of Cyprus’ largest law firm, Andreas Neocleous & Co LLC, told PaymentsCompliance: “The country has a very good and tough legal framework, and there are only very low levels of crime. “Cyprus is very keen to adopt any approach that the FATF is putting forward, and has always been quick to make any necessary changes; we don’t expect too much to change significantly.” Papoutsis said that while there was unlikely to be a drastic overhaul of existing regulations, businesses should not take their eyes off the ball. “It’s not a big issue given how tough the laws are, but one that people should be aware of,” he said. Cyprus was one of six countries which did not comply with new European Banking Authority (EBA) guidelines on the security of internet payments, which are to be introduced on August 1. The minimum security rules were introduced by the EBA to increase standards in online payments, while the EU waits for the revised Payment Services Directive (PSD2) to be introduced. The CBC said Cyprus must tweak its card payment laws to be compliant with all the EBA guidelines on internet payments, and estimates it will have made the necessary changes by August 1, 2016.