Who is Cyprus's AML/CTF Supervisor?
MOKAS, Cyprus' financial intelligence agency
MOKAS, Cyprus' financial intelligence agency is the unit charged with fighting money laundering. It serves as the central watchdog for receiving, requesting, analysing, and disseminating suspicious activity data and other relevant details relating to illegal money laundering and terrorism funding. MOKAS primary roles are as follows:
- Collecting, classifying, evaluating, and analysing data provided by reporting entities in compliance with applicable laws and regulations, as well as data from foreign and domestic partners.
- Co-operation and exchange of information with other FIUs.
- Issuing guidance directives and providing training to financial institutions, the Police, professionals and others.
- Issuing administrative orders for the postponement of transactions.
- Members of the unit can apply for and receive court orders relating to transparency, freezing, and confiscation.
- Protecting the privacy of the information under possession.
How to comply with MOKAS regulations in Cyprus
The Bank Secrecy Act and the USA Patriot Act are the two main AML Regulations.
The law mandates all Financial Institutions (FIs) and designated non-financial businesses and professions (DNFBPs) must develop and enforce effective and sufficient enforcement programs to protect their businesses, and the financial system in general, from being used for money laundering or terrorism financing purposes. Essentially, this program is intended to accomplish the following:
- Facilitate the recognition and reporting of suspicious transactions.
- Ensure the strict implementation of the "know-your-client" principle.
- Maintenance of adequate record keeping procedures.
- Escalation of suspicions to a 'Money Laundering Compliance Officer' and to MOKAS.
- Inclusion of internal control and risk management procedures for AML/CTF**.**
- Examination of every transaction that is considered to be of high risk due to its nature, and especially complicated or unusual transactions.
- Inclusion of a training program for instructing how to handle transactions suspected to be associated with ML/FT.
Independent audit of the AML/CTF compliance program
It is not enough to put an AML/CTF compliance program into motion. An independent evaluation must oversee and review the software. Financial institutions (FIs) and Designated Non-Financial Business and Professions (DNFBPSs) should periodically review their anti-money laundering and counter-terrorism financing (AML/CTF) programs to ensure their effectiveness and to identify new risk factors. The auditors must be adequately trained to guarantee the reliability of their reports. Among other things, but not exclusively, the independent audit should:
- Assess the overall integrity and effectiveness of the AML/CTF compliance program, including policies, procedures and processes
- Assess the adequacy of the AML/CTF risk
- Examine the adequacy of CDD policies and procedures and whether they comply with regulations
- Review case management and ‘Suspicious Transaction Report (STR)’ systems, including an evaluation of the research and referral of unusual transactions
- Assess the adequacy of record-keeping and record retention
- Track previously identified deficiencies and ensure they are referred to management for correction