Finance Minister: Cyprus Not A Hub Of Money-Laundering

By Lorys Charlamabous, Tax-News.com, Cyprus

15 February 2013

Cyprus's Finance Minister Vassos Shiarly has once again rejected accusations that the country is a haven for money laundering, explaining that legislative amendments had been made in December 2012 and that measures to improve the efficiency of the Registrar of Companies were being implemented "as a matter of priority."

In a statement published on the Finance Ministry website, Shiarly dismissed media reports articles claiming a "secret-service report" portrayed Cyprus as a hub for money-laundering. He argued that the authorities had never received such a report, and he drew attention to the island's adherence to the internationally agreed Financial Action Task-Force standards on money laundering. The latest assessment of Cyprus' anti-money laundering regime, made by the Council of Europe's Moneyval committee in September 2011, did not find Cyprus to be perfect, but he argued that "no country has a perfect report."

He added that Cyprus is the only country in Europe where the owner or a controller of more than 10% of a legal entity has to be identified, rather than the standard 25%. Further, Cyprus has procedures by which all beneficial owners of a legal entity can be identified.

Money-laundering, Shiarly explained, is an international issue, and he urged Cyprus to "strive to be one of the best" countries to deal with the problem.

Shairly's statement follows comments made last month, in which he denied claims that Cyprus was a location for tax dumping and defended the island's low corporation tax rate of 10% on the grounds that the country's tax system is one of its few location advantages.

Cyprus has suffered from a perception problem on money-laundering and tax dumping since it applied for a bailout in June 2012. German politicians called for support to be conditional on extra legislation, and the subject was raised by EU Economic and Monetary Commissioner Olli Rehn.