MONEYVAL report on Cyprus
Reply to Written question
| Doc. 13353
| 08 November 2013
1. The Committee of Ministers notes that
the special assessment on the effectiveness of customer due diligence
in the banking sector in Cyprus was prepared for the Troika (the
European Commission, IMF and European Central Bank) after the Chairman
of the Eurogroup Working Group and Cyprus had both requested MONEYVAL's
participation in a further assessment in the context of Cyprus's
request for a “bailout”. It was presented to the Troika on 24 April
2013. The MONEYVAL report and the report of the auditors – Deloitte
& Touche who worked in parallel with MONEYVAL under the terms
of reference – were both classified as strictly confidential for
the sole use of the Central Bank and the Ministry of Finance of
Cyprus, the European Commission, the European Central Bank and the
IMF.
2. The statement of the Central Bank of Cyprus, which was issued
on 23 May, is quoting selected statements from MONEYVAL’s special
assessment report. However, while the MONEYVAL report refers to various
positive findings, it also contains detailed findings on vulnerabilities
and issues that need to be improved. The MONEYVAL report sets out
an action plan that includes thirteen recommendations to address the
deficiencies identified by the assessment team. The action taken
by Cyprus on these recommendations will be monitored by MONEYVAL
in its general follow-up processes in December 2013.
3. For reasons of transparency, and after a series of unsubstantiated
allegations in the European press, Cyprus decided to publish both
reports, which became public on 17 June 2013. It is to be noted
that neither the MONEYVAL team nor Deloitte & Touche were consulted
by the Troika on the drafting of the summary of the two reports
which was presented to European Union Ministers of Finance.
4. As regards the question as to what lessons the Committee of
Ministers draws from “overly optimistic” reports on Cyprus, the
Committee of Ministers wishes to underline that the above-mentioned
assessment was exceptional, no other country having been subject
to such a detailed study of one part only of the global anti-money
laundering and countering the financing of terrorism (AML/CFT) standards.
The experienced MONEYVAL assessors in this special assessment were
all of the view that problematic issues would be found in any country
that is subject to a similarly intensive exercise. This assessment
went beyond the scope of a normal AML/CFT evaluation. It was a focused
and detailed “audit” of the banks, which was necessary in these exceptional
circumstances to assist decision-makers on a loan of European taxpayers’
money. The special assessment report builds on the previous MONEYVAL
evaluation report and does not replace it.
5. The delegation of Cyprus has informed the Committee of Ministers
that the recommendations made in both reports are taken into due
consideration and that Cyprus remains committed to the adoption
of all necessary further measures, as stipulated in a relevant action
plan relating to customer due diligence and entity transparency.
