Cyprus will make representations to the Organisation for Economic Cooperation and Development (OECD)  in a bid to remove its Investment Programme from OECD’s list of citizenship by investment schemes that potentially pose high risk to effective implementation of the OECD’s Common Reporting Standard.

Sources have told the Cyprus News Agency (CNA) that the Ministry of Finance is preparing additional information containing the programme’s requirements aiming at removing the Cypriot programme from the OECD’s list.

Only two EU member-states, Cyprus and Malta are included in the list. On October 16, the OECD published the results of its analysis of over 100 CBI/RBI schemes offered by CRS-committed jurisdictions, identifying those schemes that potentially pose a high-risk to the integrity of CRS.

ICPAC: Cyprus Investment Programme robust and transparent

Speaking to CNA, Marios Skandalis, President of the Institute of Certified Public Accountants of Cyprus (ICPAC) said the Cyprus Investment Programme is robust and does not jeopardise the transparency of Cyprus as a tax jurisdiction, adding that Cyprus is included in the OECD’s white list of widely compliant states concerning information exchange.

He added that the Cyprus Investment Programme can be considered as a European Programme as it was drafted on the basis of EU guidelines.

“This not an opaque programme which violates the EU transparency principles, the focus should be on the implementation by every member state,” he said.

“Cyprus not only tried to put in place a good and balanced programme but following the recent reforms approved by the Council of Ministers in May 2018, the programme became one of the strictest in the EU,” he went on to say.

Renamed as the Cyprus Investment Programme, the scheme imposes a maximum period of six months for the processing of an application, a ceiling of 700 naturalisations per year, while it now features a code of conduct governing the programme to avoid abuse of the programme, as well as establishing a special committee to supervise the code’s implementation.

“What many do not understand is that not even a cent of capital flows could be processed without the strict scrutiny based on the framework against Anti-money laundering (AML),” Skandalis stated, adding “is it widely acceptable that Cyprus has, if not one of the most strict, perhaps the strictest framework against AML,” he added.

Therefore, Skandalis said, Cyprus has in place very strict procedures governing the programme, while capital flows are subject to a very thorough control by the regulating authorities (the Central Bank of Cyprus, the Cyprus Securities Commission, ICPAC and the Cyprus Bar Association).

“This creates a quite robust framework, that safeguards the country’s transparency and for this reason Cyprus is included in the OECD’s white list of largely compliant countries,” the ICPAC President said, adding “therefore, a European state that effectively implements the EU provisions cannot be considered to be in breach of transparency rules set by the OECD.”

He also denied reports that Cyprus is a gateway for illegal funds through the investment programme, pointing out that based on the latest data, Cyprus naturalisations correspond to just 0.3% of total naturalisations in the EU.

Skandalis also pointed out that deposits by third-country nationals in the Cypriot banking system declined significantly in recent years, while deposits by Russian nationals have dropped by 40% in the last four years.

“All capital flows, including those of the investment programme, are processed through the AML framework and the Cyprus banking system implements the strictest framework against AML,” he said.

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