Assets of those on UK-US sanctions list frozen

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Cypriot individuals and entities on the UK and US sanctions list will see their assets in the banking system frozen and unable to carry out any transactions in Cyprus.

This was confirmed by Marios Skandalis, Chief Compliance Officer of Bank of Cyprus, the island’s largest lender.

Last week US Department of Treasury and the UK Foreign Office imposed sanctions on Cypriot individuals and legal entities in connection “with the Russian Federation’s unlawful and unprovoked invasion of Ukraine, including facilitators of sanctions evasion.”

Speaking to CNA, Skandalis said the Cypriot banking system voluntarily implements sanctions imposed by both the US and the UK as “a step further”, which has been rewarded with the increase of correspondent banks clearing transactions in US dollars from one to four.

He explained that Cypriot banks could opt not to implement US and UK sanctions.

But it would impact the Cypriot economy if correspondent banks could not proceed with clearing transactions in US dollars.

“We are not simply a European state, but rather a state that adopts best practices in the field of combating financial crime,” Skandalis said.

“After the imposition of sanctions mainly by the US or the UK on any persons, be it natural or legal persons, their assets in the Cyprus banking system are frozen.

“The money will not be returned to this person while their bank accounts are not closed until clarified by the respective authorities which issued the sanctions regarding what will happen with these assets.”

Skandalis pointed out that the Ministry of Finance’s Advisory Committee on Economic Sanctions (SEOK), the competent body on sanction implementation, will determine the next steps.

“If SEOK ascertains that a certain person has no connection with the sanctions and if US secondary sanctions are not violated, perhaps the committee will decide to close the accounts and return the funds to a bank a certain person has abroad.”

Secondary sanctions imposed by the US concern persons or entities which possibly indirectly facilitate the transactions of a person included in the sanctions list, not just in US dollars.

Skandalis said that Cypriots and entities included in the sanctions lists could not engage in any transaction with the Cypriot banking system.

“The Cypriot banking system implements adherence to the sanctions either of the UK or the US as a whole.

“If there is any mistake, the authorities involved will rectify it.

“But as long as (these persons) are included in the sanctions list, the banks cannot do anything else”.