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FINMIN: Private audit on money laundering, contrary to Cyprus Constitution

15 February, 2013

Minister of Finance Vasos Shiarly has said that Eurogroup’s terms for a private firm to carry out a money laundering audit of Cyprus’ banking system, contravenes Cyprus’ laws.

In statements Thursday evening, Shiarly said that according to the legal opinion of the Republic’s Attorney General, such a move would be contrary to Cyprus’ Constitution, legislations but also the provisions of the European Convention for Human Rights.
He added that the Eurogroup members as well as the Troika team (European Commission, European Central Bank, International Monetary Fund) have been informed Monday and Tuesday about this legal impediment.
"There is no way we can proceed with the specific terms of reference because there is a serious legal impediment", he said, adding “we have to see how we deal with this problem”, together with the Troika.

Asked when the MoU for a Cyprus bailout will be signed with the Troika, Shiarly said that Cyprus would like to sign it “as soon as possible," adding that "we meet all Troika demands and therefore we are ready."
"When they (the Troika team) are ready as well, the MoU will be signed”, he stressed.

The Minister also clarified that “there is no chance” for a haircut on Cyprus’ bank deposits, calling the issue as "closed".
He explained that “there are legal reasons that do not allow this kind of approach with respect to bank deposits in Cyprus”.

“This matter is closed”, he concluded.
The Republic of Cyprus applied on June 25 2012 for financial assistance from the European Stability Mechanism estimated at 17.5 billion euro which is equivalent to its GDP. The programme is expected to be agreed on Eurogroup level in March, after the presidential elections in Cyprus that take place this Sunday.