Cyprus is becoming a major player in international money laundering networks linked to Latin American drug cartels, Paphos Mayor Phedonas Phedonos warned on Wednesday.

The island, already known as a hub for drug use and trafficking, is now reportedly being used to launder dirty money flowing in from some of the world’s most dangerous criminal organisations, according to the mayor.

In his statement, Phedonos said Cyprus had “hit a tragic low,” moving from a high-consumption market and transit point for drugs to “a cog in the global machine of drug money laundering”.

He pointed to mounting evidence that drug networks from Mexico and other Latin American countries are funnelling their profits through Cyprus-based Forex companies. These firms, he claimed, are creating complex webs of subsidiaries in Latin America to mask the origins of illicit funds.

“What business reason could there be for so many Cyprus-based Forex companies to open branches with such large client lists in countries like Mexico?” he asked. 

“And how can our supervisory authorities allow the movement of this money without checking its source?”

According to the European Monitoring Centre for Drugs and Drug Addiction’s 2019 report on Cyprus, approximately one in ten adults aged 15-64 reported having used cannabis at least once in their lifetime. The report also highlighted the prevalence of cocaine, MDMA, and amphetamine use on the island. More recently, Parliament acknowledged that drug use is affecting teenagers, including those in lower education levels.

Phedonos said that criminal groups, both local and international, are taking advantage of weak points, such as the postal system, ports, and the UN-controlled buffer zone. Officials say drugs are not only trafficked through Cyprus but are also sold in large quantities within the island, generating tens of millions in local turnover.

Now, concerns are shifting to financial crime. Phedonos suggested that some individuals in “suits and ties” may be profiting from this global web of illegal activity.
“Drug money appears to be watering the underground roots of power and so-called entrepreneurship,” he said.

He called on authorities to take immediate and transparent action. 

“We must stop hiding. The truth will come out if the institutions do their job with courage and honesty.”

While not naming specific companies, the mayor urged regulators to investigate money flows connected to Forex operations and called for full accountability from those in power.

“I declare myself present and ready to contribute to this national effort,” Phedonos concluded. 

“The rest lies with the competent authorities.”