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23 May, 2024
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Authorities stumped on declared cash

Delving into the enigma of unaccounted cash and the battle against money laundering

Pavlos Neophytos

The question of the whereabouts of over 90 million euros in cash allegedly spent by travelers arriving in Cyprus through Larnaca and Paphos airports in the last 15 months remains unanswered by competent state authorities. This substantial sum has entered the Republic's territory - with increased mobility since last August, as authorities admit - making it challenging for law enforcement to trace its path. Simultaneously, an atmosphere of speculation surrounds its potential negative impact on the country. Specifically, questions arise regarding whether the money remains in free zones, has been invested in real estate, transferred abroad via Cyprus as a transit point, or ended up in the occupied territories. These focused inquiries concluded the Committee on Institutional Affairs meeting on Wednesday, where the repeated question "Where has the money gone?" echoed among MEPs like a leitmotif.

In furthering the discussion on cash arriving at airports and potential money laundering, the Institutional Affairs Committee received information regarding the case of a 31-year-old Ukrainian woman. She faces charges before the Court of Justice for transferring 8 million euros to Cyprus over eight months. Director General of the Ministry of Finance, George Pantelis, informed the committee that between 2021 and March 2024, 1077 cash declarations were submitted to the Court, entering the country via Larnaca and Paphos airports, totaling 119 million euros.

He noted that in the past 15 months, 105 million euros came into the country through 825 declarations, with 101.6 million euros from 436 declarations currently under investigation by the police and MOCAS, representing 96%. However, the whereabouts of 92% of the money remains unknown, along with the channels through which it passed, as indicated in a report by Deputy Police Chief Dimitrios Demetriou. He mentioned that four cases involving around 10 million euros are currently before the court.

Both Mr. Panteli and Mr. Demetriou assured that there has been significant movement in the entry of large amounts of cash into the Republic since August 2023. However, when the chairman of the committee, Dimitriou Dimitriou, pointed out that 92% of the 105 million that has passed through in the last 15 months remains unaccounted for as there are no cases before the courts, the Director-General of the Ministry of Finance replied that 96% of this money is under investigation by the police and thus cannot confirm Dimitriou's claim.

As per the deputy police chief, the remaining cases are still under investigation. He further stated that a significant case involving another European country and Eurojust is currently ongoing.

The matter of MOKAS's ex officio intervention

Maria Kyrmizi Antoniou, the Head of the Unit, revealed that from 2022 to the present, the Customs Department has forwarded 54 reports to the Financial Intelligence Unit (MOKAS). She noted that out of these, 17 cases were passed to the police for criminal investigation due to suspected money laundering or other criminal activities, while 10 cases were reported to corresponding units abroad.

During the discussion, concerns were raised regarding MOKAS's ex officio intervention, alongside highlighting significant gaps in the Unit's case investigations. When asked about ex officio investigations, Ms. Antoniou explained that they are conducted based on suspicious transaction reports received by the unit. For instance, she mentioned that around 2,000 cases were reported in 2023, with investigations prioritized based on severity.

Bill proposes €1,000 limit on cash purchases of goods

Tax Commissioner Sotiris Markides confirmed that several cases of "developers" taking cash had been reported to the tax authorities. Specifically, he stated that there were approximately 1,200 cash transactions worth more than €10,000 according to completed 2021 events. Additionally, he mentioned awaiting a list from the customs department of individuals who claimed to have entered Cyprus with cash, for further investigation.

Following the meeting, committee chairman Demetris Demetriou expressed his intention to propose legislation setting a maximum cash purchase limit of €1,000 for both individuals and businesses. Currently, there is no such limit, with sellers only required to declare purchases exceeding €10,000 to the tax inspector. MPs speculated on the Ministry of Finance's potential response to the proposal following the meeting.

The procedure

Theodora Demetriou, director of the customs department, explained that individuals declaring cash upon entering the Republic fill out forms detailing the origin, destination, and purpose of the cash. She noted that most declarations cite property purchases. However, she highlighted the lack of on-the-spot verification beyond taking the declaration, with centralized verification occurring later.

Anastasia Kamenou, speaking for the Ministry of Interior, outlined a statutory risk assessment process targeting legal entities to identify those at high risk for money laundering, terrorist financing, and tax evasion. Criteria include anonymous sponsorship, large cash movements, and other risk factors. In early 2023, 25% of legal entities were identified as high-risk. Following due diligence, cases are forwarded to the MOCA, police, and tax inspector for further investigation. High-risk entities include cash-based institutions and football clubs with unclear foreign income sources.

[This article was translated from its Greek original and edited for clarity]



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