Cypriotische centrale bank beschuldigt trojka van misleiding (en)

BRUSSELS - The Cypriot central bank has said eurozone finance ministers and the media have been misled by a highly critical report on money laundering on the island.

The report in question is a four-page resume of a longer study written by Moneyval, a unit of the Strasbourg-based Council of Europe, and Deloitte, a US accountancy firm.

The resume was drafted on behalf of the "troika" - the European Central Bank, the European Commission and the International Monetary Fund - and circulated to ministers on 14 May.

It was also leaked last weekend by the Cypriot website stockwatch.com.cy.

It says that some leading Cypriot banks rely on "high risk" clients for the most part of their business, that banks do not do proper checks on who their customers are and that they do not file "suspicious transaction reports" even in "compelling cases."

It said there are "systemic deficiencies in the implementation of preventive measures by the audited institutions."

It also prompted Jeroen Dijsselbloem, the chair of the eurozone ministers' meetings, to say: "This report shows that while the legal [anti-money-laundering] framework is OK, the implementation is really lacking" and to call for action from Cyprus.

The eurozone ministers never saw the full version of the study.

The long version is accessible only to the Cypriot central bank and to a handful of troika officials because it contains commercial secrets and private data of named banks and their clients.

But according to the Cypriot central bank in a statement sent to press on Friday (24 May), it tells a different story.

The bank quoted from the Deloitte section of the full report, which spoke of a "generally solid level of compliance" with customer due diligence (CDD) obligations, which are "more detailed … than in many other jurisdictions, including other EU member states."

It said Deloitte found just 29 suspicious transactions out of the 570,000 which it audited.

It said the Moneyval section of the full study spoke of "strong" implementation of CDD rules and "strong" anti-money-laundering measures, including "the rejection of some high risk business."

It said Moneyval also praised Cypriot banks because they "identify customers in all cases" and "through all layers" of complex company structures.

The Cypriot central bank in its own comments added: "The summary paper does not provide a synopsis of the main findings of the [Deloitte and Moneyval] reports but rather a description of the perceived weaknesses of the system, drawing inferences where none exist in the original reports."

It complained that the authors of the summary did not consult the authors of the full report.

It said the summary "cannot be considered balanced" because it does not mention any of the positive findings.

It also said that in the "reports as a whole, there is no reference to or indication of systemic deficiencies … [and] the general picture portrayed is not negative."

For its part, the troika is currently drafting an action plan for anti-money-laundering reforms in Cyprus.

Dijsselbloem back on 14 May said troika officials will closely monitor its compliance, in an implicit threat that EU bailout funds will stop flowing if it steps out of line.

But it is unclear which version of the Cyprus money laundering study - the short and negative or the long and positive version - the troika will use as the basis for its demands.