Monday

20th Jan 2020

Letter

Cyprus and Russia: Association of Cyprus Banks responds

  • (Photo: Flickr/Draig)

Following the publication on 25 September of an investigation by Andrew Rettman into Cypriot banking, EUobserver received this letter from the director general of the Association of Cypriot Banks, Michael Kammas, which we publish as a right of reply:

Letter to the editor, EUobserver

Your recent article Cyprus: Russia's EU weak link reflects an outdated perception of the Cypriot banking system, failing to note the nation's extensive, positive and continuous efforts to reform and modernise its financial sector, and instil a culture of enhanced compliance, since the economic crisis of 2011-13.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 30-day free trial.

... or join as a group

The fact is that the Central Bank of Cyprus and other authorities have worked to re-engineer the country's financial regulations, tax transparency requirements, and bank supervisory expectations.

As a result, the members of the Association of Cyprus Banks (ACB) have significantly improved transparency, imposed strict new conditions for new and existing customers, and terminated accounts that do not meet rigorous new standards.

The whole sector has downsized to such an extent that, contrary to your report, neither the prosperity of Cyprus nor its banking industry rely on foreign bank deposits and transactions.

Cyprus's financial regulatory regime currently aligns with relevant EU standards and sanctions requirements, and adheres to appropriate United Nations Security Council resolutions.

Cypriot banks have strict sanctions compliance programs.

We're especially pleased that in Basel's 2017 Anti-Money Laundering Risk Index, Cyprus was placed in the lowest risk group, one place behind the US.

The success of the reforms is reflected in the latest figures, which provide the most accurate picture of the state of banking in Cyprus today and address many of the outdated assertions in the article.

Bank clients that are of local or European origin now vastly outnumber those from Russia and Common of Independent States countries.

In fact, less than two percent of current bank clients are from the Russian Federation, and just 0.4 percent are from Ukraine.

Client deposits from Russia have also dropped 37 percent, and now represent less than 6 percent of the total number of deposits in Cypriot banks.

At the same time, Cyprus has put into place a regulatory framework to ensure that relevant laws are adhered to effectively, and established a culture of compliance across all the members of the Association of Cypriot Banks.

Specific focus has been recently given to restricting the use of shell companies and payable through accounts.

I kindly ask that future references to the Cyprus banking system in EUobserver reflect its enhanced compliance regime, recognised progress in fighting money laundering, and ongoing commitment to continuous reform.

We would urge you to publish this letter, so that your readers can be better informed about the Cypriot banking sector as it stands today, and we would welcome a discussion about how this might be achieved.

Sincerely,

Michael Kammas.

Michael Kammas is director general of the Association of Cyprus Banks

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

Investigation

Cyprus: Russia's EU weak link?

Five years and €10bn after its EU bailout, Cyprus is a weak link in Europe's banking system - amid renewed fears on Russia money-laundering.

US steps in to clean up Cyprus

Cyprus has overlooked undertakings on bank probity made to the EU in the context of the 2013 bailout - but it might prove harder to get the US off its back.

Brexit - Europe's 'Versailles moment'?

The spectre of another peace agreement looms: that of the doomed Versailles treaty, which, by sowing resentment and perpetuating misunderstanding of each other's true ambitions and principles, created more tensions than it dissolved.

Why EU subsidy schemes don't work - the evidence

Counter to popular beliefs among policymakers, the positive effects of support schemes are found to be very limited. In order to revitalise Europe, the newly appointed EU Commission needs to reconsider government's role in innovation and entrepreneurship.

News in Brief

  1. 'No objection in principle' on Huawei cooperation, EU says
  2. French aircraft carrier goes to Middle East amid tensions
  3. EU suggests temporary ban on facial recognition
  4. EU industry cries foul on Chinese restrictions
  5. 'Devil in detail', EU warns on US-China trade deal
  6. Trump threatened EU-tariffs over Iran, Germany confirms
  7. EU trade commissioner warns UK of 'brinkmanship'
  8. Germany strikes coal phase-out deal

Column

Why nations are egomaniacs

A nation, Reinhold Niebuhr wrote, is not capable of altruism. Even less so, if such a group has formed on the basis of strong emotions and casts itself as the "saviour of the nation".

Maltese murder - the next rule-of-law crisis in EU?

While Poland's government is escalating its rule of law crisis by introducing even more drastic measures against the country's judges, another problem is looming over the EU's commitment to upholding the rule of law: Malta.

Stakeholders' Highlights

  1. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  2. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  3. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms
  4. Nordic Council of MinistersNordic Climate Action Weeks in December
  5. UNESDAUNESDA welcomes Nicholas Hodac as new Director General
  6. Nordic Council of MinistersBrussels welcomes Nordic culture

Stakeholders' Highlights

  1. UNESDAUNESDA appoints Nicholas Hodac as Director General
  2. UNESDASoft drinks industry co-signs Circular Plastics Alliance Declaration
  3. FEANIEngineers Europe Advisory Group: Building the engineers of the future
  4. Nordic Council of MinistersNew programme studies infectious diseases and antibiotic resistance
  5. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  6. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues

Join EUobserver

Support quality EU news

Join us