Money laundering must be tackled harder across Europe, according to Moneyval. On the occasion of a new study round of the systems in force against money laundering and the financing of terrorism, the European committee of subject experts published two reports on Gibraltar and Cyprus. And the report is worrying: if notable advances are highlighted, " significant improvements are necessary in several respects " in Nicosia, and Gibraltar has " not proven its capacity to carry out effective investigations and prosecutions ".
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Attached to the Council of Europe, Moneyval regularly carries out control visits to the countries affiliated to its organization and monitors their systems for combating the financing of terrorism and money laundering. This time, its experts first looked at the British overseas territory of Gibraltar, which remains in its portfolio of states to control. The authorities of the small British enclave in Spain have an " uneven " understanding of these two issues, stresses Moneyval: the institution notes " gaps linked to the national risk assessment, in particular by an insufficient analysis of the cross-border threat to which Gibraltar faces as an international financial center ”.
The authors of the report underline the progress made by Gibraltar, both in the " legal framework " in force and in the means provided to its financial intelligence unit (FIU), but also point out the shortcomings. The findings of the FIU have not been put to good use by the authorities of the enclave, its investigations and prosecutions are open to criticism and " fundamental improvements are necessary " in the case of money laundering and the financing of terrorism.
“ Golden passports ” criticized again
Moneyval is even more virulent with Cyprus. The island " understands, to a large extent ", the issues and threats posed by these illegal activities, particularly in the area of terrorist financing, and recent changes are welcomed by experts. " The banking sector has become more effective in mitigating risks, " notes the document, for example.
However, these issues are clearly not the government's priority. Lack of formal analysis of companies, weak means, insufficient fight against the laundering of foreign capital resulting from illegal activities, absence of initiative “ in matters of freezing and confiscation of the proceeds of crime ”, few preventive measures… “ Of significant improvements are required ”in several areas to fill the many holes in the racket observed by experts.
More specifically, the “ Cyprus Investment Program ” (CIP), this process allowing an investor to obtain a Cypriot - and therefore European - passport in exchange for an investment of at least two million euros on the island. subject to numerous criticisms of the report. This program has indeed led to an exponential increase in “ risks in the real estate sector ”, and the report points to “ intrinsic ” vulnerabilities linked to obtaining citizenship in exchange for money. The latter - and in particular those linked to the strong investments in real estate brought about by the CIP - have not been sufficiently studied by the Cypriot authorities, and the monitoring of the program, which brought the island 6.64 billion d ' euros between 2013 and 2018, must be reinforced, estimates Moneyval.
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Despite the progress observed, the institution has therefore decided to place these two territories under reinforced monitoring: this procedure is adopted in the event of " serious breaches of standards ", or if the procedures required to fill the gaps have not been implemented. place on time. The authorities of Gibraltar and Cyprus will have to present their progress in 2021. Moneyval also suggests that Nicosia be " more aggressive " in its fight against money laundering, " more proactive " and more attentive to investments made on the island , particularly in the real estate sector.
Reacting to the publication of the report, the Cypriot authorities underlined the “ progress and measures adopted ” in recent years by the government, while adding that Cyprus “ has shown its commitment to implementing strong policies against money laundering and financing of terrorism ”. Authorities tried to show off last year to alleviate criticism, by strengthening checks on the CIP, the documents to be provided and the time taken to study the file before the passport is provided to the investor.
It must be said that the pressure is mounting on the States implementing programs of the “ golden passport ” type, which are now in the crosshairs of several international organizations, including the OECD: at the end of 2018, the latter had expressed its reservations about these devices, sources of vulnerability in the fight against tax evasion. The same goes for the European Union: in a report published a year ago, the Commission underlined that these " golden visas " presented " a certain number of risks, in terms of security, money laundering or tax evasion ”. She had invited several countries, including Malta, Cyprus and Bulgaria, to be " more transparent " about the way passports were granted. Otherwise, " we will not hesitate to take the necessary measures ," warned Commissioner Dimitris Avramopoulos.
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