Anti-Financial Crime & Financial Crime Compliance
Regulatory Intelligence Leadership | Insight | Network

Compliance News, Financial Services

Two Cyprus law firms’ licences revoked amid money-laundering investigation

By Dan Byrne

The bar association of Cyprus has rescinded two law firm licences over a money laundering scandal.

The Cyprus Mail reported this week that the two firms were guilty of not following due diligence processes when taking on new clients.  

Legal regulations in Cyprus require all firms to carry out extensive research on the source of funds which they may handle on a client’s behalf. This is to clarify that they are for legitimate transactions and not associated with terrorism or other financial crimes.

According to the Cyprus Mail, Bar Association chairman Doros Ionnides said that the two law firms in question were investigated due to their connection with a “citizenship by investment” programme.  

The programme is a government initiative which opens a pathway to Cypriot citizenship – and, by extension, EU citizenship – to any individual investing at least €2.2 million in the Cypriot economy, among other more minor requirements, according to citizenship advisory firm Henley and Partners.

Ioannides said that the two law firms whose licences have been revoked did not complete a thorough due diligence process and collect all relevant details on clients involved with this scheme.

“Claiming they did not know [the details], or could not find out, was not an excuse,” he said.

He added that the Bar Association was trying to safeguard Cyprus as a service centre and protect the integrity of the country’s legal profession.  

The licence revocations come as part of a broader string of investigations into Cypriot firms which have become attached to money-laundering scandals.

The Mail reports that five other cases are awaiting decision by the Bar Association in addition to the two licences already withdrawn.

Ioannides also said that the Bar Association has carried out around 700 checks on law firms and, even though licences may have not been revoked, a number of fines have been imposed for non-compliance with regulation.

The five remaining cases regarding “citizenship by investment” will be tabled before the Association’s board in the near future.

Share this on:

Follow us on:

AML Intelligence
We hope you enjoyed reading this article

If you would like unlimited access to AML Intelligence premium articles, newsletter delivered twice a week, access to our Global Bank Fines and Penalties database, free access to Boardroom Series events and much more, select one of our subscription options and become a subscriber!