Cyprus denies harbouring Russian oligarchs

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Finance Minister Constantinos Petrides has refuted claims by US news channel CBS that Cyprus is not effectively enforcing EU sanctions against Moscow because it’s a haven for the money of Russian oligarchs.

In a written statement, Petrides claimed: “From the moment the sanctions were adopted, misinformation and fake news that painted Cyprus as opposed to the sanctions began to circulate in the international media”.

“For instance, Cyprus allegedly exercised its veto over prohibiting transactions by Russian banking institutions using SWIFT.

“Fake news even caused a disturbance in front of the Cyprus Consulate in Kyiv, endangering the staff and forcing the government of Cyprus to issue denials,” said the minister.

Earlier this week, US broadcaster CBS turned the spotlight on Cyprus’ connection with Russian oligarchs, calling it the weak link in European Union efforts to impose sanctions on Kremlin allies.

CBS ‘60 minutes’ reporter Sharyn Alfonsi claimed that Cypriot authorities are reluctant to impose sanctions on superrich allies of Russia’s President Vladimir Putin.

Alfonsi interviewed Maira Martini, an analyst at Transparency International. The non-profit organisation tracks money laundering worldwide and referred to the special treatment of authorities towards Russian oligarchs.

Petrides said: “Despite a sizeable Russian community living and working in Cyprus without any connection to the sanctioned entities, the total amount of deposits with exposure to Russia represented only 3.8% of all deposits (down from 40% in 2013)”.

“Total loans with exposure to Russia made up just 0.8% of all loans by the end of 2021.

“The reality had changed significantly from the pre-2013 period, when some of what was said in the form of statements in the CBS report was true, regarding the exposure of the Cypriot economy and Russian capital in Cyprus”.

Money laundering

Petrides said on money laundering claims: “In relation to the anti-money laundering framework, banking institutions in Cyprus have recently interpreted and applied the framework concerning customer identification in the strictest possible ways”.

He argued that international reports from EU bodies and anti-money laundering watchdogs recorded Cyprus’ improvement in combating money laundering.

“The MONEYVAL Report 2019 provides evidence of this practice, which resulted in the closure of over 80,000 accounts and the denial of thousands more account opening requests.”

He said opening accounts in other European nations or US states was easier than in Cyprus.

“I must make the following clarifications about the imposition of sanctions: The Mutual Evaluation Report (MER) of Cyprus by MONEYVAL also provides comprehensive documentation of the framework for the application of sanctions in Cyprus”.

“The government decided by a decision of the Cabinet in June 2021 to establish and operate a National Sanctions Enforcement Unit similar to the UK’s Office for Financial Sanctions Implementation (OFSI), which does not exist in many other countries”.

Petrides said implementation of sanctions, with frozen assets from credit institutions, totalled €105 mln.

Frozen assets from investment firms with Cypriot registrations were around €720 mln.

An additional €719 mln in funds were frozen under the Cyprus Securities and Exchange Commission’s supervision known as administrative service providers.

“I want to emphasise that the Cypriot government works closely with the EU and its competent authorities.”

To Cabinet has approved the initiation of revoking Cypriot citizenship of 63 people and 96 of their dependents who received golden passports, a total of 159.

Of these, 10 people fall under the sanction’s regime with 31 dependents.