Moneyval said in a recent evaluation report that the operation of casinos on the territory of the Republic of Cyprus carries potential money laundering risk.
Moneyval is a permanent monitoring body of the Council of Europe tasked with assessing compliance with principal standards to tackle money laundering and the financing of terrorism.
The agency further noted in its evaluation report on money laundering and terrorist financing that it believes Cyprus Casinos, the company authorized to operate casinos around the tiny Mediterranean island nation, should not expand its activities until it makes sure that risks of money laundering are reduced to an absolute minimum.
Cyprus Casinos is a subsidiary of Hong Kong-listed integrated resort operator Melco Resorts & Entertainment. The company operates a temporary casino in the Cypriot city of Limassol and three satellite casinos in the capital Nicosia, Larnaca, and Ayia Napa.
News about Moneyval’s report emerge just weeks ahead of the planned opening of a fourth satellite casino in Paphos.
Moneyval’s report details an onsite visit of Cyprus Casinos’ Limassol venue in May 2019, suggesting that there were weaknesses in the property’s anti-money laundering and counter-terrorist financing systems.
The monitoring body’s assessment team said that the gambling venue was “currently operating at or beyond the limits of its AML/CTF compliance and risk management system.”
According to Moneyval, the opening of more casinos “will undoubtedly increase the risks of money laundering and terrorist financing”, and Cyprus Casinos should take further measures to mitigate such risks before moving on with expanding its operations in Cyprus.
The monitoring agency also urged the Cyprus Gaming and Casino Supervision Commission not to authorize the opening of more casinos until Cyprus Casinos proves that it has deployed proper risk management practices.
Light at the End of the Tunnel
While the Moneyval report has thrown some serious shade on Cyprus Casinos’ efforts to counter money laundering and financing of terrorism, it also notes that the company has been taking some measures to prevent its properties from being used to mask financial crimes.
The monitoring body specifically referred to the fact that the company has been encouraging patrons to join its loyalty program, which allows it to carry out basic checks on clients’ background.
Commenting on Moneyval’s report, Cyprus Casinos said in a statement that combating money laundering and terrorist financing was an integral part of their operations and that they welcomed “a strong and compliant regulatory framework.”
Cyprus Casinos further noted that it has been working closely with the Cypriot gambling regulator to implement all the necessary anti-money laundering regulations and deploy additional industry-leading AML/CTF procedures across all its operations.