Cyprus: Money Laundering

A UK regulator's £4.7 million penalty against Citibank reveals how operational weaknesses in payment screening and account restrictions can undermine sanctions compliance. The enforcement action identifies specific process failures that allowed nearly 1,000 prohibited transactions worth £19.72 million to proceed despite sanctions restrictions.

Operating an adult entertainment business in Cyprus may be legal, but securing banking and payment services presents significant operational hurdles. Financial institutions apply heightened scrutiny to these businesses despite full legal compliance, creating challenges that require strategic planning and transparent risk management to overcome.

The Cyprus Bar Association has issued its first Guidelines on Business-Wide Risk Assessment (BWRA), establishing a comprehensive framework for supervised entities to identify and mitigate money laundering, terrorist financing and sanctions risks. These guidelines provide practical direction for compliance with the new EU Anti-Money Laundering Regulation ahead of its July 2027 implementation deadline, outlining methodologies for risk assessment, control evaluation and ongoing monitoring requirements.

Cyprus companies must update addresses and confirm beneficial owners by Dec 31, 2025, to avoid fines and deregistration risks.

In September 2025, the Department of the Registrar of Companies and Intellectual Property (the "DRCIP") issued two important announcements outlining new obligations for companies and partnerships in Cyprus.

Cyprus companies now operate in an environment aligned with EU and OECD norms, meaning investors can transact with confidence.

This article is based on the AML Regulation Factsheet by Accountancy Europe, which outlines the latest changes introduced by the European Union's Anti-Money Laundering (AML) reform.

We've all seen the recent news about a bank being fined for deficiencies in its anti-money laundering (AML) procedures.

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