At the invitation of the Governor of the Central Bank of Cyprus, the IMF in March 2001 assessed the extent to which the Cypriot supervisory arrangements for the offshore financial sector complied with certain internationally accepted standards. The assessment concentrated on the supervision of the offshore banking center and on the provision of company services to the international business companies registered in Cyprus. An IMF-led team, including supervisory experts from Germany and Jersey, carried out the assessment.
The subsequent report found that the Cypriot offshore sector is not large in comparison with some other offshore centers and that the services provided are more restricted than in many other offshore centers. The report concluded that supervision was generally effective and thorough, though there was some scarcity of resources. It also described the many legislative changes being made by the authorities to bring Cyprus in line with the European Union, as the country prepares itself for accession. The report also notes that Cyprus has licensed institutions from countries often regarded as high risk and that continued vigilance and high standards of supervision are required.
The Central Bank of Cyprus published the report, which can also be found on the IMF website (www.imf.org/external/np/ofca/ofca.asp).