Cyprus Country Summary

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 strong anti-corruption framework and legal measures in place, high-profile cases and public perception indicate ongoing risks, particularly in sectors like banking and public procurement. In the area administered by Turkish Cypriots, corruption is also prevalent, with a report ranking it 140th out of 180 countries, highlighting issues in public tenders and licensing.

Cyprus has a strategically significant economy, being the eastern-most member of the European Union and a member of the eurozone. In 2023, the Republic of Cyprus experienced 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 economy is bolstered by sectors such as tourism, shipping, and financial services, alongside emerging industries like energy and technology, particularly following the discovery of hydrocarbon deposits in its Exclusive Economic Zone.

Cyprus has a favorable investment climate, actively welcoming foreign direct investment (FDI) across various sectors, including shipping, tourism, and emerging industries like energy and technology. The government promotes FDI through Invest Cyprus, which provides support and information to investors, while also maintaining a legal framework that is largely based on UK common law. Recent discoveries of hydrocarbon deposits have further attracted multinational companies, enhancing the island's appeal as an investment destination.