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 indicating that 92% of Cypriots perceive it as widespread, and 58% feel personally affected by it. Despite a strong anti-corruption framework and efforts to combat corruption, high-profile cases and public perception suggest that corruption is prevalent, particularly in sectors like banking and public procurement. In the area administered by Turkish Cypriots, corruption is also a major concern, with a report ranking it 140th out of 180 countries, highlighting bribery as common in public tenders and licensing.

The economy of Cyprus has shown resilience, with a GDP growth of 2.4% in 2023, significantly outperforming the Eurozone average of 0.5%. The country, a member of the eurozone, actively encourages foreign direct investment (FDI) across various sectors, including traditional industries like shipping and tourism, as well as emerging fields such as 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 newer industries like energy and technology. The government promotes FDI through Invest Cyprus, which provides support and information to investors, while the legal framework is based on UK common law, ensuring a transparent environment for business operations. However, there are some restrictions on non-EU investments in specific sectors, and the recent discovery of hydrocarbon deposits has further attracted multinational companies to the region.