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Money Laundering rules and privacy considerations

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As part of global efforts to prevent money laundering, professional accountants and other professional service providers, are required to obtain additional information. These procedures are a safeguard that will benefit the industry as a whole and ultimately protect our clients and our firm from potential association with money laundering and terrorist funding.

 

The fight against crime demands that criminals are prevented from legitimising the proceeds of their crime by the process of "money laundering or terrorist financing". It is a process which can involve many outside firms, the more obvious targets of banks and other financial institutions. Professionals such as accountants and lawyers are at risk because their services could be of value to the successful money launderer or terrorist financier. But the launderer or terrorist financier often seeks to involve many other often unwitting accomplices, such as:

  • stockbrokers and securities houses,
  • insurance companies and insurance brokers,
  • financial intermediaries,
  • surveyors and estate agents,
  • gaming activities,
  • company formation agents,
  • dealers in precious metals and bullions, and
  • antique dealers, car dealers and others selling high value commodities and luxury goods.

 

The primary legislation in Cyprus is The Prevention and Suppression of Money Laundering Activities Law of 2007. The criminal offences which it involves can be summarised as:

  • Acquiring, possessing or using the proceeds of criminal conduct.
  • Concealing or transferring the proceeds of criminal conduct.
  • Assisting another person to retain the benefit of criminal conduct.
  • Tipping off suspects or others about a money laundering or terrorist financing investigation.

 

The failure to report knowledge or suspicion of money laundering or terrorist financing is punishable on conviction by up to 5 years imprisonment or a fine of up to €50,000 or both of these penalties.

 

All accountants, auditors and their staff, whatever the nature of their work, including tax advice, must be particularly aware of the scope of these potential offences.

 

Failure to comply with any of the requirements of the Law (by a firm to which they apply) is subject to an administrative fine of up to €200,000 which is imposed by the competent supervisory authority. In case the offence continues, an additional administrative fine of up to €1,000 is imposed for every day that the offence continues.

 

Privacy Considerations

See "Confidentiality"

 

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