North Cyprus Anti Money Laundering Law (1/2024): duties for businesses and professionals
The regime for preventing the laundering of criminal proceeds in the Turkish Republic of Northern Cyprus was renewed by Law 1/2024. This article summarises the duties that bind businesses and professionals. The information is based on the text of the law as published in the Official Gazette.
The law and its scope
The Law on the Prevention of the Laundering of Criminal Proceeds, the Financing of Terrorism and the Financing of the Proliferation of Weapons of Mass Destruction (1/2024) was published in the Official Gazette on 4 January 2024 and repealed the earlier Law 4/2008.
Who are the obliged persons?
The law treats a broad group that may meet laundering risk as obliged persons:
- Banks and financial institutions
- Accountants and auditors, and tax advisors
- Lawyers, in specified financial and real estate transactions
- Trust and company service providers
- Real estate agents and agencies
- Jewellers and dealers in precious metals and stones
- Gaming halls and betting service providers
- Crypto asset service providers
- Motor vehicle dealers
- Public bodies and institutions
MABEB and the Board
The financial intelligence unit of North Cyprus is established as the Financial Information Unit (MABEB) within the Ministry of Finance; it collects and analyses suspicious transaction reports.
Core obligations
- Establish institutional anti laundering policies and a risk assessment
- Carry out identity verification under the know your customer principle
- Report suspicious transactions to MABEB
- Keep records
- Appoint a compliance officer and train staff
Identity verification thresholds
Identity verification is required on establishing a business relationship and on the following single transactions:
| Transaction | Threshold |
|---|---|
| Business relationship | No amount required |
| Single transaction | 10,000 EUR and above |
| Gaming and betting | 2,000 EUR and above |
| Electronic fund transfer | 1,000 EUR and above |
| Where suspicion exists | No amount required |
Suspicious transaction reporting
When a suspicious transaction is detected, the report is made immediately. If the transaction is abandoned, a report is expected by the next business day at the latest.
Penalties
Administrative fines are set as multiples of the monthly gross minimum wage:
| Breach | Administrative fine |
|---|---|
| Compliance officer and training duties | 15 times the monthly gross minimum wage |
| Identity, risk, reporting and record duties | 30 times the monthly gross minimum wage |
| Continuing breach | The fine is doubled |
For the offences of laundering, financing of terrorism or financing of proliferation, a fine of up to 200,000 EUR and imprisonment of up to 15 years may be imposed.
Frequently asked questions
Are accounting and audit firms subject to this law?
Yes. Accountants and auditors, and tax advisors, are expressly among the obliged persons.
Is the North Cyprus financial intelligence unit MASAK?
No. The North Cyprus unit is MABEB (Financial Information Unit). MASAK is Turkey's unit and is subject to a different law.
At what amount does identity verification become mandatory?
No amount is required for a business relationship; for single transactions it is required at 10,000 EUR and above. Where suspicion exists, no amount is required.
Sources
This article is for general information; obligations and penalties can change with legislation. Contact us for a compliance programme tailored to your firm.