FATF Status

Cyprus is not currently on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Cyprus was undertaken in December, 2023. According to that Evaluation, Cyprus was deemed Compliant for 16 and Largely Compliant for 21 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 3 of the Effectiveness  & Technical Compliance ratings.

Corruption remains a significant issue in the Republic of Cyprus (ROC), with a Eurobarometer survey revealing that 92% of Cypriots perceive it as widespread, and 58% feel personally affected by it. Despite a robust anti-corruption framework, high-profile cases and public perception indicate ongoing risks, particularly in sectors like banking and public procurement. In contrast, the area administered by Turkish Cypriots faces severe corruption challenges, with a report ranking it 140th out of 180 countries, highlighting prevalent bribery in public tenders and licensing.

Cyprus has a strategically advantageous location at the crossroads of Europe, Africa, and Asia, and is a member of the eurozone. The economy showed resilience in 2023, achieving a GDP growth of 2.4%, significantly outperforming the Eurozone average of 0.5%, with inflation at 3.9% and unemployment at 6.5%. The government actively promotes foreign direct investment (FDI) across various sectors, including shipping, tourism, and energy, particularly following the discovery of significant hydrocarbon deposits.

Cyprus actively seeks and welcomes foreign direct investment (FDI), with a favorable legal framework based on UK common law and a well-developed legal and accounting service sector for foreign investors. The government promotes investment through Invest Cyprus, focusing on key sectors such as shipping, tourism, and energy, while also encouraging newer sectors like technology and education. Recent discoveries of hydrocarbon deposits have further attracted multinational companies, enhancing the investment climate.