Identifier
Created
Classification
Origin
09NICOSIA114
2009-02-12 14:03:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Nicosia
how-toVZCZCXRO0227 PP RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSR DE RUEHNC #0114 0431403 ZNR UUUUU ZZH P 121403Z FEB 09 FM AMEMBASSY NICOSIA TO RUEHC/SECSTATE WASHDC PRIORITY 9617 INFO RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY RUEHAK/AMEMBASSY ANKARA PRIORITY 5370 RUEHBS/USEU BRUSSELS PRIORITY RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
UNCLAS NICOSIA 000114
SENSITIVE
SIPDIS
STATE FOR EB
USEU FOR MATTHEW HAARSAGER
TREASURY FOR FINCEN AND HANS HUBER
E.O. 12958: N/A
TAGS: ECON EFIN ETER CY
SUBJECT: NORTHERN CYPRUS AML UPDATE
REF: A. 08 NICOSIA 460
B. 08 NICOSIA 77
UNCLAS NICOSIA 000114
SENSITIVE
SIPDIS
STATE FOR EB
USEU FOR MATTHEW HAARSAGER
TREASURY FOR FINCEN AND HANS HUBER
E.O. 12958: N/A
TAGS: ECON EFIN ETER CY
SUBJECT: NORTHERN CYPRUS AML UPDATE
REF: A. 08 NICOSIA 460
B. 08 NICOSIA 77
1. (SBU) A European Commission-sponsored group of six experts
visited northern Cyprus February 2-6 to assess the
jurisdiction's progress against its anti-money laundering
(AML) action plan. The report's key findings are:
-All but one of the key laws identified in the Action Plan
have been legislated and implemented.
-The Action Plan is on track and the "AML Board convenes
regularly and is fulfilling the duties clearly set out for it
in law." This has "led to the creation of a tight
institutional framework, which withstands international
comparison."
-"However, in assessing progress and looking at issues on
the basis of risk, the development of AML activity cannot
proceed at the same rate in all sectors."
-The Action Plan will be updated to take into account
identified areas of need and a rescheduling of a new risk
assessment.
2. (SBU) The AML Board has submitted an updated training and
equipment needs plan to the EU and other donors. The key need
is for additional police training on conducting financial
transaction investigations. Public prosecutors also require
instruction on how to prosecute under the new AML laws. We
understand that the UK intends to provide the bulk of this
education. USAID has already been involved in helping with
compliance officer training and drafting of laws relating to
non-bank financial services (e.g. insurance companies,
foreign exchange dealers, and real estate brokers.)
3. (SBU) The key immediate issue is passage of the "Games of
Chance Law." The "Prime Minister" promised the visiting
experts, as well as our Ambassador, that this law would be
passed in time for the next FATF plenary beginning on
February 23. The problem has been that, with "parliamentary"
elections recently called and scheduled for April 19, the law
has become caught-up in political jockeying, despite general
agreement among the major parties that casinos need to be
better-regulated. The law has passed through committee and
is scheduled to be debated on February 16, with a final vote
on that day or the next. The AML Board and the "government"
are well aware of the difficulties they may face at the FATF
plenary if the law is not passed, contrary to promises the
Turkish Cypriots made at the last plenary in October.
4. (SBU) Comment. The Turkish Cypriot AML process has come a
long way in a year. The number of suspicious activity reports
has reportedly increased from a few per week to several dozen
per month. And the AML Board seems to be diligent in
investigating these suspicious transactions, reaching out to
advisors to help them determine how best to approach various
cases. The problem remains, however, that the AML Board
remains small, undertrained and with a police and judiciary
that have no background in these matters. The revised Action
Plan and training program that are being prepared by the
Turkish Cypriots will hopefully address some of these
shortcomings.
Urbancic
SENSITIVE
SIPDIS
STATE FOR EB
USEU FOR MATTHEW HAARSAGER
TREASURY FOR FINCEN AND HANS HUBER
E.O. 12958: N/A
TAGS: ECON EFIN ETER CY
SUBJECT: NORTHERN CYPRUS AML UPDATE
REF: A. 08 NICOSIA 460
B. 08 NICOSIA 77
1. (SBU) A European Commission-sponsored group of six experts
visited northern Cyprus February 2-6 to assess the
jurisdiction's progress against its anti-money laundering
(AML) action plan. The report's key findings are:
-All but one of the key laws identified in the Action Plan
have been legislated and implemented.
-The Action Plan is on track and the "AML Board convenes
regularly and is fulfilling the duties clearly set out for it
in law." This has "led to the creation of a tight
institutional framework, which withstands international
comparison."
-"However, in assessing progress and looking at issues on
the basis of risk, the development of AML activity cannot
proceed at the same rate in all sectors."
-The Action Plan will be updated to take into account
identified areas of need and a rescheduling of a new risk
assessment.
2. (SBU) The AML Board has submitted an updated training and
equipment needs plan to the EU and other donors. The key need
is for additional police training on conducting financial
transaction investigations. Public prosecutors also require
instruction on how to prosecute under the new AML laws. We
understand that the UK intends to provide the bulk of this
education. USAID has already been involved in helping with
compliance officer training and drafting of laws relating to
non-bank financial services (e.g. insurance companies,
foreign exchange dealers, and real estate brokers.)
3. (SBU) The key immediate issue is passage of the "Games of
Chance Law." The "Prime Minister" promised the visiting
experts, as well as our Ambassador, that this law would be
passed in time for the next FATF plenary beginning on
February 23. The problem has been that, with "parliamentary"
elections recently called and scheduled for April 19, the law
has become caught-up in political jockeying, despite general
agreement among the major parties that casinos need to be
better-regulated. The law has passed through committee and
is scheduled to be debated on February 16, with a final vote
on that day or the next. The AML Board and the "government"
are well aware of the difficulties they may face at the FATF
plenary if the law is not passed, contrary to promises the
Turkish Cypriots made at the last plenary in October.
4. (SBU) Comment. The Turkish Cypriot AML process has come a
long way in a year. The number of suspicious activity reports
has reportedly increased from a few per week to several dozen
per month. And the AML Board seems to be diligent in
investigating these suspicious transactions, reaching out to
advisors to help them determine how best to approach various
cases. The problem remains, however, that the AML Board
remains small, undertrained and with a police and judiciary
that have no background in these matters. The revised Action
Plan and training program that are being prepared by the
Turkish Cypriots will hopefully address some of these
shortcomings.
Urbancic