The Council of Europe team of experts against money laundering, MONEYVAL, indirectly praises the Cypriot authorities for their efficiency in cases of suspicious financial transactions that were attempted through Cypriot banks.
The references to Cyprus are included in a 56-page research report produced by a team of experts, issued by MONEYVAL on 19 July 2013, titled "The postponement of financial transactions and the monitoring of bank accounts".
The report concludes that the monitoring of bank accounts has proven to be an effective instrument in locating proceeds of crime, and that in case that there are suspicions of financing terrorism, this is probably one of the most efficient means of investigation.
In a case cited concerning Cyprus, the report notes that a Cypriot national sent a forged money transfer order to a Bank in country X regarding the transfer of €3,000,000 from a foreign company’s account to an account maintained by a Cypriot company, in a Cypriot Bank the suspect being the sole owner of this company. When the foreign company noticed the transfer, they communicated with the bank and after discovering that the money transfer order was forged, they notified the Police. At the same time, the foreign bank contacted the bank in Cyprus requesting for the funds to be returned. The Cypriot bank immediately reported to MOKAS all the facts.
The next day an e-mail was sent to MOKAS from the foreign country’s FIU, informing about the case and the facts. The foreign FIU was also informed that a formal rogatory Letter from the Judicial Authorities would soon follow so as to make it possible for MOKAS to freeze the €3,000,000 in the bank account in Cyprus. As a result of this information, MOKAS issued an administrative order forbidding the Cypriot bank to allow the execution of any transactions regarding the €3,000,000 in the account.
The formal Rogatory Letter was sent for the freezing the €3,000,000 in the Cypriot bank account together with all necessary documents required to issue a freezing order in Cyprus. The documents included a signed declaration by the person referred to as the ‘purchaser’ on the sale contract provided to the Cypriot bank by the suspect. This person was actually the owner of the foreign company which had been deceived. In his declaration he claimed that he never signed a sale contract with the suspect and furthermore that he was not even acquainted with him.
Following enquiries with the Land Registry of Cyprus about the validity of the sale contract it emerged that no such contract was ever submitted to them. Finally, the person who received the money accepted to send them back.
In another case, MOKAS received 4 STRs regarding Company A and one STR regarding Company B from banking institutions in Cyprus and 1 STR from an individual from Country X regarding Company B. Companies A and B were related because they had the same beneficial owner who was from Country Z. Companies A and B were registered in another country, their business address was in Country W and their principal activity was the IT consultancy, programming and development.
Based on information obtained by MOKAS, complainants informed the banking institutions that were defrauded by an investment company which tried to persuade them to invest in shares and to send the funds of the investments in Companies A and B in Cyprus. Thus, suspicions were raised due to the fact that the declared principal activity was not in line with the actual transactions i.e. the sale of shares and complainants were requesting their funds back.
MOKAS sent a request for information to the FIU of Country Z, the country from where the beneficial owner was. Requests for information were sent to the FIU of Country W, the country where the business address of Companies A and B were. MOKAS also informed the Cyprus Securities and Exchange Commission about the actions of Companies A and B.
Furthermore, MOKAS sent a request to all banking institutions in Cyprus in order to be informed whether Companies A and B were holding bank accounts. MOKAS informed the Authorities of Country X, about the complainant. Two administrative orders of postponement of transactions were issued to 2 banking institutions in Cyprus regarding Companies A and B’s bank accounts, upon receipt of the Formal Letter of Request from Country X for a total of $92, 537.
Country X sent a formal letter of request and freezing orders affecting the bank accounts of Companies A and B totaling to $99,385 were issued.
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