Assets worth more than €32 million were frozen in 23 cases during the first eight months of 2026, according to figures presented by the Police before the House Audit Committee on Thursday. Around half of the total value of assets frozen between 2023 and 2026 was linked to cases involving citizenship-by-investment schemes.
The committee examined a special report by the Audit Office on the operational effectiveness of banking-sector supervision in preventing money laundering. Representatives of the relevant authorities outlined the measures taken to address the weaknesses identified in the report.
Police report sharp increase in frozen assets
The Head of the Economic Crime Investigation Subdivision at Police Headquarters, Avxentis Konstantinou, said assets worth approximately €550,000 were frozen in nine cases in 2023, around €8.5 million in 26 cases in 2024, and approximately €10.5 million in 28 cases in 2025.
Asked by Akel MP Christos Christofides about cases linked to citizenship-by-investment schemes, Konstantinou said they accounted for around half of the total value of assets frozen between 2023 and 2026, despite representing a smaller number of cases.
He referred, among other cases, to that of Jho Low, while clarifying that freezing assets does not mean a case has been concluded or that the assets have been permanently confiscated.
Konstantinou attributed the increase in seizures to police training and the introduction of a practice whereby financial investigations are conducted alongside criminal investigations.
He also acknowledged that there had been problems with feedback and information-sharing between the Police and the Unit for Combating Money Laundering (MOKAS) until 2024. These had since been addressed through new cooperation procedures, he said.
Committee chair points to progress but calls for stronger oversight
Speaking after the meeting, committee chair and Diko MP Chrysanthos Savvides said there had been improvements in tackling money laundering since 2020, involving the Central Bank, MOKAS and the Police.
He said the staff shortages identified in the report were gradually being addressed, while stressing the need to strengthen controls against cyber-enabled financial crime, which is also a concern for Europol.
Savvides referred to the closure of thousands of bank accounts due to breaches of relevant requirements, noting that the committee had requested information on what happened to the money held in those accounts after they were closed.
He said the necessary level of effectiveness had not been achieved by 2023, but that inspections had intensified in recent years. He attributed the improvements to measures taken under President Nikos Christodoulides' administration and expressed the view that Cyprus would achieve better results in its 2028 MONEYVAL assessment.
MPs question delays and weaknesses in supervision
Disy MP Giorgos Karaiskakis said that, despite the existence of an adequate legislative framework, the Audit Office report identified weaknesses and delays in supervisory inspections. In some cases, these had taken two years or more to complete.
He called for updated information on pending cases, staffing levels and inspections carried out in 2025 and 2026.
Akel MP Christos Christofides described the findings as “another aspect of the major scandal involving the golden passports”.
He argued that the required checks on money entering and being invested in Cyprus had not been carried out during the citizenship-by-investment programme.
Christofides said the Police had revealed that around half of the value of frozen assets was linked to naturalisation cases. He also strongly criticised the Police and MOKAS leaderships at the time, claiming that the enforcement authorities had “more or less turned a blind eye”.
He also described the delay in updating the National Risk Assessment as a “huge gap”, noting that the previous assessment had been carried out in 2017.
He said new risks had emerged since then, including those linked to cryptocurrencies and sanctions, and questioned whether responsibility for conducting the assessments had been clearly assigned.
Elam MP Evgenios Hamboullas asked for clarification on where money from closed bank accounts was transferred and whether its movement to other countries was being monitored.
He also raised concerns about the criteria banks use when deciding whether to approve or reject transactions.
Odysseas Michaelides identifies two institutional gaps
The head of the Alma movement, Odysseas Michaelides, said the examination of the report had highlighted two serious institutional gaps.
The first concerned the lack of a clear legislative mandate allowing the Audit Office to audit the Central Bank of Cyprus on money laundering matters. He said the possibility of introducing legislation would be examined, potentially in cooperation with the committee.
The second concerned MOKAS. Michaelides noted that the Attorney General has the authority to appoint and dismiss its head, while its budget is included in that of the Law Office.
He linked the issue to the proposed reform of the Law Office, criticising political parties which, in his view, were attempting to postpone the question of the separation of powers indefinitely.
Audit Office highlights staffing shortages and delayed inspections
Audit Office representative Akis Kikas said its audit, which covered the period from January 2020 to July 2024, identified staffing shortages at the Central Bank, delays in carrying out supervisory inspections and scope for improving the quality of suspicious transaction reports submitted to MOKAS.
He also said differing legal interpretations had restricted the Audit Office's access to certain Central Bank information, stressing that there should be no areas beyond independent scrutiny.
The Audit Office has proposed relevant legislative amendments, he added.
Central Bank reports closure of 168,000 accounts
Central Bank representative Kleanthis Ioannides said measures had already been taken to address the weaknesses identified, including the reorganisation and strengthening of the Bank's Anti-Money Laundering (AML) Directorate and the creation of a separate sanctions enforcement unit.
According to the figures he presented, at least 42,000 corporate customer accounts and 126,000 personal accounts were closed during the period under examination due to non-compliance with legal requirements and relevant directives.
He also said Cyprus's next on-site MONEYVAL assessment is expected to take place on 8 June 2028.
MOKAS introduces automated system for suspicious transaction reports
MOKAS representative Maria Antoniou said an automated system for assessing and prioritising suspicious transaction reports had been in operation since July 2023.
New guidelines were also issued during 2026 to improve the quality of these reports, she said.
Antoniou additionally referred to the establishment of a public-private partnership involving banks, the Police and MOKAS.
Government acknowledges delay in national risk assessment
Finance Ministry representative Kikis Pafitis acknowledged the significant delay in updating the National Risk Assessment, saying the process could have started earlier.
He cited, among other factors, work to strengthen the framework for implementing sanctions and difficulties in finding specialised experts.
He clarified that the new National Risk Assessment is currently under way.
Source: CNA
