The European Commission has launched infringement proceedings against Cyprus over anti-money laundering measures

The European Commission has launched infringement proceedings against the Republic of Cyprus by sending the authorities an official notice. The reason was the incomplete transposition into national law of the provisions of the EU directive on combating money laundering from criminal activity.

In addition to Cyprus, the European Commission has raised similar concerns with Lithuania, Poland and Slovenia. According to Brussels, these countries have not fully incorporated into their legislation the provisions of Directive (EU) 2018/1673 concerning criminal liability for money laundering, the penalties provided for it and the circumstances under which the punishment must be more severe.

The directive establishes EU-wide rules for defining money laundering offences and the penalties for them. It is also intended to strengthen cooperation between the law enforcement and judicial authorities of Member States and prevent criminals from exploiting differences in national legislation.

One of the key provisions of the document is the possibility of holding a person liable for money laundering even without a prior conviction for the predicate offence through which the illicit proceeds were obtained. In addition, the directive provides for punishment for so-called «self-laundering» — the laundering of proceeds derived from one’s own criminal activity.

Stricter sanctions are also envisaged for persons and entities performing special public functions, including banks and notaries. The document separately regulates jurisdiction issues in cases involving offences committed in several countries.

According to the European Commission, Cyprus’s legislation still does not meet all the directive’s requirements. The Republic of Cyprus has two months to provide a response and address the shortcomings identified. If the explanations do not satisfy the European Commission, it may move to the next stage of the procedure and issue a reasoned opinion.