Increased Apprehension Over Casino Money Exemption in Cyprus Regarding Potential Money Laundering Activities
In the heart of the Mediterranean, Cyprus is grappling with a contentious bill that seeks to exempt casinos from the €10,000 cash transaction limit, a measure aimed at reducing cash usage and curbing money laundering risks. The proposed legislation, presented by MPs Nikolas Papadopoulos, Marinos Mousiouttas, Efthimios Diplaros, and Andreas Themistokleous, has sparked intense controversy, dividing lawmakers and regulatory bodies.
Arguments for the bill focus on the operational and commercial benefits for casinos. Supporters argue that the cash limit hinders high roller or VIP customer transactions, reducing competitiveness and attractiveness of Cyprus as a gambling destination. Exempting casinos might boost the local gaming industry, potentially enhancing tourism and related economic activities in Cyprus.
However, opponents centre on money laundering and financial crime risks. Removing the cash transaction cap risks increasing the potential for casinos to be used as conduits for money laundering, allowing large illicit cash flows to enter the financial system with less transparency. Critics argue that exempting casinos could create regulatory loopholes, weakening Cyprus’s broader fight against financial crime and potentially inviting international scrutiny.
The bill directly interacts with Cyprus’s AML framework by altering one of the cash flow controls designed to limit anonymous large cash payments, a common technique used in laundering illicit funds through gambling operations. Given that casinos globally are subject to rigorous AML/KYC requirements, the bill’s exemption might reduce transparency if not coupled with equally effective monitoring mechanisms.
Without strong oversight, increased cash transactions in casinos could facilitate layering and integration stages of money laundering, challenging Cyprus’s AML compliance reputation and enforcement effectiveness. In this context, the key to the bill’s impact will lie in how robustly the casino sector’s AML controls can mitigate risks associated with exempting these high-value cash transactions from standard limits.
Several regulatory bodies, including the Tax Commissioner, Central Bank, Cyprus Bar Association, MOKAS, and the Securities and Exchange Commission, oppose amending the law. The debate has seen intense controversy, with AKEL MPs Irene Charalambidou and Andreas Pasioutides, along with independent MP Alexandra Attalides, voicing strong opposition. MP Alexandra Attalides has even accused lawmakers of facilitating money laundering.
The Cyprus Gaming Authority defends the casino industry, stating that stringent monitoring measures are already in place. Nevertheless, at least 16 cases of suspicious gambling activities at casinos have been forwarded to the police for investigation during 2023-2024, with 94% of these transactions being in cash. The Unit for Combating Money Laundering (MOKAS) received 182 reports of suspicious transactions from Integrated Casino Resorts Cyprus Ltd.
The European Union is set to implement stricter regulations on casino revenues in 2027. Meanwhile, the bill's supporters, such as DISY MPs Demetris Demetriou and Nicos Georgiou, along with DIKO's Zacharias Koulias, argue that the benefits to the local gaming industry outweigh the potential risks.
As the bill navigates through Cyprus's legislative process, the focus remains on striking a balance between economic and operational casino interests and money laundering risks and regulatory integrity. The outcome could have far-reaching implications for Cyprus's reputation in the global fight against financial crime.
[1] Source: European Commission, Financial Action Task Force (FATF) reports on Cyprus's Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) measures.
- The proposed legislation in Cyprus, debated within the realm of politics and lawmaking, seeks to exempt casinos from a cash transaction limit, sparking debate among finance professionals and regulatory bodies about the potential impact on the local business sector and general-news topics such as money laundering and crime-and-justice.
- Critics of the bill argue that removing the cash transaction cap could facilitate money laundering and financial crimes, creating regulatory loopholes that could damage Cyprus's reputation in the global fight against financial crime, as highlighted in European Commission and Financial Action Task Force reports.
- As the bill progresses through the legislative process, the emphasis lies on ensuring robust Anti-Money Laundering (AML) controls in the casino sector to mitigate outlined risks and maintain Cyprus's compliance and enforcement effectiveness in the evolving landscape of casino-related financing.
