The Cyprus Securities and Exchange Commission has recently released information to all Cyprus Investment Firms, Management Companies and Administrative Service Providers regarding fraudulent tax evasion, and also a proposal on the prevention of use of the financial system for the purpose of money laundering and terrorist financing.
In February 2012, Financial Action Task Force (the international body responsible to promote the effective implementation of measures for combating money laundering and terrorist financing) altered the definition of ‘predicate offense’ to include any serious tax offenses related to direct or indirect taxes.
The Prevention and Suppression of Money Laundering and Terrorist Financing Laws of 2007 – 2013 states predicate offences are, amongst other, all criminal offences punishable with imprisonment exceeding one year.
Additionally CySEC have stated that service providers must follow a risk based approach to their clients and as a result of this Eltoma will be adhering to the following procedures:
- To implement appropriate systems and processes to detect, prevent and deter money laundering or serious tax offences.
- To screen clients during KYC procedures against databases or third party checks for adverse tax-related news.
- Not to knowingly help clients of prospects in committing tax offences or any crimes and appropriately report any suspicions that client accounts contain proceeds derived from serious tax offences.
- To continually monitor the business relationship clients and ensure the amount of funds deposited are consistent with the amount of funds indicated at the opening of accounts.