How do the EU AML directives and the FATF shape Cyprus's AML rules?

Money laundering, terrorist financing and organised crime undermine the soundness, stability and good name of the financial sector and threaten the EU's internal market and internal security. Criminals move money across borders easily, so national rules alone are not enough. The EU's directives, adopted by the European Parliament and the Council, complement and reinforce measures to detect and prevent laundering, and make cooperation between competent authorities in different member states faster and more efficient.

Cyprus implements them through Law 188(I)/2007 and CySEC's AML Directive. The 4th AML Directive, (EU) 2015/849, strengthened the risk-based approach first set out in the 3rd Directive (2005/60/EC), adding EU, national and firm-level risk assessments, and introduced central beneficial ownership registers. The 5th, (EU) 2018/843, amended it, for example by extending the rules to virtual currency providers and opening up access to the registers; in November 2022 the EU Court of Justice struck down general public access, and Cyprus now requires a legitimate interest. Directive (EU) 2018/1673 harmonised the criminal offence of money laundering and its penalties.

In 2024 the EU adopted a new package: a directly applicable Anti-Money Laundering Regulation, (EU) 2024/1624, and a new directive, (EU) 2024/1640, both applying mainly from 10 July 2027, and a new EU authority, AMLA, set up by Regulation (EU) 2024/1620, which took over the EBA's AML/CFT role at the start of 2026.

The Financial Action Task Force is an intergovernmental body set up by the G7 in 1989 to develop national and international measures against money laundering. Its mandate has since grown to cover terrorist financing and the financing of the proliferation of weapons of mass destruction.

Its decision-making body, the Plenary, meets three times a year. It has 40 members: 38 jurisdictions and two regional organisations, the European Commission and the Gulf Co-operation Council. Russia's membership was suspended on 24 February 2023, after its invasion of Ukraine. Cyprus is not a member; it is evaluated by MONEYVAL, a body that works to the FATF standards, as explained in What is MONEYVAL?

Besides setting standards, the FATF monitors how its members implement them, studies laundering and terrorist financing methods in typology reports, and identifies jurisdictions with strategic weaknesses.

The FATF Recommendations serve as the global benchmark for combating money laundering, terrorist financing and proliferation financing. They do not have the force of law; they work because countries commit to them and are evaluated against them, and because weak performers face public listing.

First issued in 1990, they were revised in 1996, 2001, 2003 and 2012, and have been updated regularly since. After the attacks of 2001 the FATF added Special Recommendations on terrorist financing, nine in the end. In 2012 it merged the 40 plus 9 into a single set of 40.

The Recommendations cover risk assessment and the risk-based approach, national cooperation, the criminal offences of money laundering and terrorist financing, targeted financial sanctions, preventive measures for financial institutions and other businesses, the transparency of companies and trusts, the powers of authorities and international cooperation.