Debate: Cyprus Confidential - need to curb enablers of sanctions-evasion and money-laundering rules in the EU
Date: WEDNESDAY, 22 NOVEMBER 2023
Speaker: Dubravka Šuica
Language: EN

According to the investigation, there may also have been instances of tax avoidance or even tax evasion involved. We note that the Cypriot authorities have already announced that they will investigate these matters. We are raising these issues with them too. A year and a half after the beginning of Russia’s war of aggression against Ukraine, it is essential for us to stay vigilant about any violation or circumvention attempts that could weaken the intended impact of our sanctions. As you know, we have 11 packages of far-reaching sanctions in place. The High Representative and the Commission proposed a 12th package on 14 November. This is currently being discussed in the Council. We take any allegation of breaches of European sanctions very seriously. We have also been determined to drive forward a very ambitious agenda to fight money laundering and terrorist financing. As a result, the European Union has some of the toughest money laundering rules in the world, thanks also to the commitment of this House. As you know, we are working to strengthen our tools to fight money laundering with the ambitious package under negotiation. There is no room for complacency. We have to ensure that European rules are correctly implemented by Member States and European operators to prevent crime, protect the European Union financial system and ensure sanctions are enforced. In July, the Commission opened an infringement procedure against Cyprus on the grounds of incorrect transposition of the fifth Anti-Money Laundering Directive. This action was taken before the Cyprus Confidential investigation. We keep a close eye on the implementation of European law. This infringement mainly relates to how the national beneficial ownership register works. The beneficial ownership register is a pillar of any national framework against money laundering. It contains data on the beneficial owners of companies and trusts: who actually owns what. A complete and accurate beneficial ownership register is essential for enforcing sanctions because it can help identify the true owners, who often are behind complex corporate structures. The EU Member States are responsible for implementing and enforcing sanctions. The Commission has dedicated significant efforts to support Member States in this task. We provide guidance and bring national authorities together on a regular basis to exchange data and best practices. We want to help make sure that sanctions are uniformly applied across the European Union. We set up the ‘freeze and seize task force’ to improve the cooperation with and among Member States on sanctions implementation. But there will always be unscrupulous actors looking to make a profit no matter what, including by violating or circumventing sanctions. Violating sanctions is a crime in most Member States, but how offences are defined and the types and levels of penalties differ significantly across the Member States. To address this problem, the Commission last year proposed a directive to harmonise definitions and penalties for sanctions violation. The proposal contains a detailed list of criminal offences targeting violations of different types of European sanctions, such as asset-freeze measures, sectorial measures, travel bans and arms embargoes. The list of criminal offences also covers specific cases of sanction circumvention. I want to thank the rapporteurs, the shadow rapporteurs and their teams working on anti-money laundering files and the proposal on the violation of sanctions. I know that Parliament takes these matters as seriously as the Commission does. The Commission is closely following developments in Cyprus. Last week, 14 November, Cyprus launched its electronic system for the beneficial ownership register. The roll-out of the whole system is planned for 2024. The Commission is working closely with national authorities to address risks of circumvention, including providing guidance and legal clarity. In June of this year, a Commission delegation travelled to Nicosia to meet Cypriot officials responsible for sanctions implementation and enforcement. Cyprus is setting up a National Sanctions Implementation Unit. We are watching these efforts closely. We will continue to monitor the situation, and we are available to help the relevant authorities in Cyprus on this matter. I look forward to your views.