Cyprus regulator calls on accountants to tackle terrorist financing

The Institute of Certified Public Accountants of Cyprus (ICPAC) has issued an urgent appeal to accountants and audit professionals to actively contribute to the fight against terrorist financing.

In a recently issued warning, the regulator highlights the importance of vigilance in five specific methods of money transfer, including the use of cryptocurrencies.

Role of accountants as gatekeepers

ICPAC points out that accountants, due to the nature of their work and their role as gatekeepers, play a crucial role in the prevention of financial crimes such as money laundering and terrorist financing. The regulator states that it is essential that professionals within the sector are actively involved in identifying and reporting suspicious transactions.

The methods of money transfer

According to ICPAC, terrorist organizations use five methods to transfer money:

1. Donations through non-governmental organizations (NGOs);
2. Cash;
3. Bank transfers and gift cards;
4. Cryptocurrency;
5. Empty companies.

With regard to cryptocurrencies, ICPAC calls on accountants to be alert to anonymous cross-border peer-to-peer transfers, crowdfunding, charities and anonymous online fundraising campaigns. The regulator emphasizes that failure to report suspicious transactions is considered an offense.

Flagged transactions are subject to strict controls, involving profiling of individuals involved, screening of crypto wallets and transactions, and the deployment of specialized blockchain tools.

International insights

A US Treasury official said Palestinian militant groups, including Hamas, use small amounts of cryptocurrencies to finance terrorism, but prefer traditional products and services. This was confirmed during a hearing that stressed that the amount of cryptocurrencies used by these groups is relatively small compared to other sources of financing.

ICPAC continues to encourage its members and associates to report suspicious activities and play an active role in the prevention of terrorist financing.