Know All 2025 Anti-Money Laundering Regulatory Updates

Insights from Cyprus’ National Risk Assessment Reports

The Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) of the Council of Europe continues to assess the AML/CFT frameworks of EU Member States that are not FATF members. In its most recent reports (December 2023 and May 2025), Cyprus was assessed as largely compliant or compliant with 38 of the FATF Recommendations, with only two remaining partially compliant, reflecting the country’s ongoing progress in strengthening its AML/CFT regime. The Cyprus National Risk Assessments (NRAs) of 2018 and 2021 have been instrumental in identifying the country’s key ML/TF threats and vulnerabilities. The 2018 NRA, coordinated by the Central Bank of Cyprus and MOKAS, concluded that Cyprus faces a medium level of ML/TF threat, primarily driven by cross-border rather than domestic crime. The 2021 NRA, conducted in line with FATF Recommendation 15, examined ML/TF risks linked to crypto-asset activities and led to key recommendations such as adopting the Travel Rule and introducing enhanced due diligence measures for entities engaging in VA-related services.

The findings showed that CySEC-supervised entities in the securities sector demonstrated a strong understanding of VA-related risks and applied relevant mitigating measures, while the banking sector remained cautious due to limited experience and operational readiness. Meanwhile, Administrative Service Providers (ASPs) supervised by CySEC, ICPAC, and the CBA experienced inconsistencies stemming from differing supervisory guidance. Since then, these authorities have revisited and aligned their AML/CFT directives to ensure a more consistent approach. However, supervisory bodies have since revisited and updated their AML/CFT directives to provide greater clarity and alignment.

To further enhance supervision, the NRAs emphasized the need for financial supervisory authorities other than CySEC to establish formal registration, licensing, and supervision frameworks for VA activities. They also encouraged information sharing on best practices, assigned CySEC the responsibility for detecting unregistered CASPs, and recommended that the Customs Department receive specialized training for handling crypto-asset storage devices.

CySEC Circulars and Regulatory Updates

CySEC continues to play a central role in strengthening the national AML/CFT framework. Through the adoption of new European legislation and the issuance of targeted circulars, CySEC seeks to enhance supervisory consistency, transparency against ML/TF risks.

At the European level, several significant developments have shaped the AML landscape. The Regulation (EU) 2024/1624 introduces directly applicable AML/CFT rules across all Member States, ensuring a harmonized approach to compliance. It expands list of obliged entities to include Crypto-Asset Service Providers (CASP) and sets clearer obligations concerning Customer Due Diligence, beneficial ownership verification, and risk-based internal policies.

Additionally, the 6th Anti-Money Laundering (AMLD6) repeals previous directives (AMLD4 and AMLD5) and modernizes the EU’s AML/CFT legal framework. AMLD6 focuses on enhancing cooperation between national authorities, increasing transparency and addressing emerging risks such as those related to crypto-assets and complex corporate structures.

Further, CySEC Circular C655 summarises common findings from CySEC’s review of AML Compliance Officers’ Annual Reports and Internal Audit Reports for the years 2022 ad 2023. The assessment revealed recurring deficiencies, including insufficient methodological explanations in AML inspections, limited detail in findings, data gaps, and the absence of detailed training and organisational information. These elements are essential for a comprehensive and credible AMLCO Annual Report.

Lastly, CySEC Circular C656 presents the results of a thematic review on regulated entities’ compliance with AML/CFT Law. The review identifies both areas of improvement and good practices observed during on-site inspections. Among the strengths noted were the use of enhanced monitoring systems, escalation procedures and robust customer due diligence documentation. However, weaknesses were also observed, including outdated AML manuals, incomplete application of enhanced due diligence measures, and gaps in transaction monitoring.

Therefore, these updates illustrate CySEC’s ongoing commitment in improving AML/CFT supervision, encouraging a culture of accountability, and ensuring that all obliged entities operate under a consistent and risk-based regulatory framework.

• Upcoming AML Regulatory Updates

• CySEC  Circular C614 - EBA Guidelines on National Restrictive Measures- CySEC Circular C614a. 1st set of Guidelines
  b. 2nd set of Guidelines