Cyprus Banking Sector Leading in Compliance and Anti-Financial Crime Regulation

NICOSIA – The Association of Cyprus Banks (ACB) has highlighted the progress of the Cyprus banking sector in implementing advanced compliance regulations and reform policies that combat money laundering and other financial crime, according to a news release dated December 15.

The professional body representing Cyprus banks said a “revolution in banking culture and processes” since the 2013 financial crisis had reduced banks’ exposure to high risk jurisdictions, minimized reliance on third parties and effectively addressed shell company activity. Its progress has been widely recognized, particularly in the U.S., with four U.S. dollar clearing correspondent banks now operating in Cyprus.

Speaking on the webcast, Cyprus: Cementing a Culture of Compliance, Craig Saperstein, a partner at Pillsbury Winthrop Shaw Pittman LLP and a panel moderator, said he had been told by U.S. congressional staff drafting reforms to Anti-Money Laundering (AML) laws that Cyprus’ example influenced their work.

Marios Skandalis, Director of Compliance, Bank of Cyprus Group, told the webcast:

“After the crisis of 2013, we had to start a new chapter in Cyprus. Otherwise, it would have been game-over for the Cyprus economy. Instead of conforming to the mere regulatory obligations, we engaged actively in identifying benchmarks of international excellence and embedding these in our operational framework.”

“If you want to regain your credibility then simply conforming to the law is not enough. You have to demonstrate that you are ready, capable and committed to take the extra mile as an undisputed global leader in the sector. We have gladly shed blood in Cyprus. We have seen it as an opportunity to set up a sustainable jurisdiction.”

Matheos Charalambides, Chief Compliance Officer and AML Compliance Officer at Hellenic Bank, said: “Cyprus has been recognized internationally for its progress in the banking sector, particularly by the U.S. The number of U.S. dollar clearing banks operating in Cyprus increased from one to four during the last few years and Cyprus’ efforts in Anti-Money Laundering have been praised by the U.S. Department of Treasury Assistant Secretary, Office of Terrorist Financing and Financial Crimes, Marshall Billingslea, and Congresswoman Maxine Waters, Chairwoman of the House Financial Services Committee.”

Michael Kammas, ACB Director General, added: “It is critically important that we participate in these opportunities to tell global audiences about the comprehensive reform effort undertaken by the ACB and its member banks. These efforts help ensure that international stakeholders have an accurate impression of the cultural and regulatory changes made in Cyprus over the past several years. ACB also utilizes such venues to express its ongoing commitment to making further progress toward adopting globally-recognized best-in-class approaches to AML and reducing financial risk within the Cypriot baking sector.”

Dr. Charis Pouangare, Deputy CEO of the Bank of Cyprus, explained that the pandemic had not been a great obstacle to economic and regulatory progress in Cyprus, and that the sector would continue to adopt the best international standards. He said: “Despite COVID, we have continued our efforts to de-risk and improve our bank’s balance sheets, in addition to deleveraging the banking sector and reducing bad loans. Unemployment has now been reduced to around 7% and the reduction of real GDP during the pandemic was below the EU average, reflecting the resilience of the economy.”

Cyprus: Cementing a Culture of Compliance was hosted by Pillsbury Winthrop Shaw Pittman LLP and U.S. management consultancy firm Guidehouse. A recording of the full webcast can be accessed here: https://bit.ly/3q22csO.

Established in 1969, the ACB is a non-profit organization the purpose of which is the representation of the banking sector in Cyprus. The ACB puts forward the banking industry views when legislative and other governmental policies on banking and financial issues are determined. Common positions are formulated on several banking and financial matters for the benefit of the economy as a whole. More information is available online: https://acb.com.cy/.


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