Within the next period, there will be a fine for the passport of Joe Lowe, as revealed before the Research for naturalizations, the Governor of the Central Bank, Konstantinos Herodotou. At the same time, Mr. Herodotus referred to the examinations on naturalizations that have negative information, while he gave answers regarding the control methodology exercised by the Central Bank.
In his initial statement, Konstantinos Herodotou clarified that the KEP was not in any of the responsibilities of the Central Bank nor were opinions ever asked and had no participation in the planning of the program.
“Credit institutions and other liable entities must comply with the requirements for the intervention of money laundering,” he said in his statement.
Asked to comment on the possibility of liability in credit institutions but also for supervision, Mr. Herodotus submitted to the committee the methodology of supervision. As he said that supervision is applied depending on the degree of risk and the characteristics of the entity. The scope of supervision is based on a model of the CBC developed in collaboration with the IMF.
Mr. Herodotou also pointed out that there are three pillars of control, firstly the identification of the customer, secondly the control of transactions and thirdly the updating of data.
The checks are done on a sample basis, said Mr. Herodotou, and then the process develops according to the findings, giving the credit institution an opportunity to respond and then the CBC decision is sent. Depending on the case, an announcement may be issued by the Central Bank. “Every bank must make a similar risk assessment” concluded Mr. Herodotou
Asked about the sampling, Mr. Herodotus said that “there is nothing to show the banks that the remittance came from naturalization and also the full amount did not come. In some cases, they came in pieces, and they were still not in a bank. ” It also referred to a specific case of a customer who used more than one credit institution. “There was no system to notify the bank or the state that remittances were for this purpose.”
Mr. Nikolatos said that therefore the CBC did not have a list of naturalizations and whether the CBC should have control. Mr. Herodotou replied that neither in the process, nor in the planning of the naturalization plan and the obligation of the CBC was for AML and not for the passports.
In relation to the quantity of remittances from the KEP in the total of remittances that came from abroad, Mr. Herodotou stated that:
In 2018 it was at 1.64% of the total 56 billion euros that came from abroad, 2019 1.55% from a total of 74 billion euros 2020 0.88% from a total of 47 billion euros.
Asked if the CBC had contacted the Ministries, he said: “We, as the CBC, have made efforts to get information or to inform about some of our concerns. We wanted data to do our analysis of financial stability. It was more to make it easier for banks to locate. “
Mr. Herodotus in his answers cited some statistics that came from the banks and not from the control of the CBC. As the banks rejected 130 relationships with customers 2013-2019 and 77 reports were made to MOKAS in relation to the KEP. For 2020, they rejected 9, finished 3 and referred 33 to MOKAS “As you can see, there was a risk and the banks caught something by sampling”.
From 2014-2020 68 on-site inspections were carried out, 52 of which had specific targets for high-risk customer research. Based on the audits, more than 3,000 customers passed the audit by sampling.
Asked if the accounts of developers, accountants and lawyers are considered high risk, he said yes.
Regarding the case of Joe Lowe, he stated that there was a delay due to the lockdown and that in the coming days there will be a final decision which is the fine. As he said, a special on-site inspection was carried out at the specific credit institution from November 2019.
“The total number of cases coming out of Al Jazeera was 57 and 29 of them had negative information. Of the 57, 33 of them were customers of Cypriot banks and of these potentially negative information was 19 We are in the final stages of 28 files,” he said.
“Since 2014, the CBC has increased its liabilities in relation to the intermediaries where the banks evaluated and had to control the third parties of the persons. We have been back since 2016. These measures reduced the number of mediators by 46%. “Several times the CBC instructions were preceded by laws.”
Asked how many people are employed by the CBC for AML purposes, Mr. Herodotus said that the number is 9 people and that it has increased in recent years.
He was also asked if external collaborators were being used, and said that an attempt had been made in the past but that they thought he should stay inside Central.
Asked by Mr. Nikolatos, regarding MONEYVAL's comment from a letter of February 2020, where he said that it was for the control of the developers and not of the customers. Ms. Kalogirou stated that the investors' money was deposited in the accounts of the developers and MONEYVAL commented on this.
“It simply came to our notice then. Hence in 2020 we asked for the names to facilitate the banks. We made efforts in 2020 to control the developers in 2020 but there was no follow up from the Ministry. It is understandable what MONEYVAL says and it is one of the difficulties “.
Mr. Nikolatos referred to specific cases of suspicious transactions where banks reported to MOKAS either immediately or a little later and asked if the CBC was aware. “When he found out until the report there may have been some delay. Also, procedurally, the banks do not inform the CBC when they go to MOKAS “.
Mr. Nikolatou referred to specific cases of suspicious transactions where the banks reported to MOKAS either immediately or a little later and asked if the CBC was aware. “When he found out until the report there may have been some delay. Also, procedurally, the banks do not inform the CBC when they go to MOKAS “.
Philenews / Insider