A €10,000 ceiling in the use of cash for the purchase of goods or services was discussed at the House ethics committee on Wednesday, as part of a bill put forward by Disy MP Demetris Demetriou to combat illicit money transactions and money laundering.
Demetriou explained that transactions in cash should not exceed €10,000, in line with the provisions of the EU regulation of May 2024, to prevent money laundering and funding terrorism.
The bill was drafted after a Ukrainian was found with €400,000 in his luggage.
The committee heard that over €120 million had passed through Cyprus’ airports and found its way into the market over the past three years.
Representatives of the Tax Department, the Law Office, the Unit for Combating Money Laundering, the Customs Department, the Central Bank of Cyprus, the Cyprus Securities and Exchange Commission, the Association of Cyprus Banks and the Institute of Certified Public Accountants, who attended the meeting, all said they supported the bill.
They also said that some changes should be made so that the amendment would comply with the EU regulation to come into effect in 2027.
Tax commissioner Soteris Markides said cash was often used as a means for tax evasion and money laundering and suggested that the amount should gradually be reduced to €5,000.
He furthermore supported that imposing prison sentences should be examined for violators, along with the 10 per cent fine on any amount exceeding €10,000 cash.
The Law Office representative said that the finance ministry should be invited to the next meeting to discuss harmonisation with the EU regulation.
Speaking after the meeting, Demetriou said it was incomprehensible that in 2024 millions of euros were entering Cyprus and no one knows what happened to that money.
Demetriou said the bill would most likely be sent to the House plenary over the coming weeks.
Diko MP Zacharias Koulias expressed some reservations, saying that those who stood to gain from this bill were the banks.
He added that the agricultural sector should be exempt from the restriction and that the next meeting should hear the views of the trade unions.
Independent MP Alexandra Attalidou said the amount should be less than €5,000 and penalties for violators should be increased.
She added that efforts to clamp down on money laundering abroad focused on three sectors, namely property, luxury items and works of art and that the provisions of the 2027 EU regulation should be included in the current bill.
