Five law firms under sanctions-busting spotlight

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Five Cypriot law firms are under investigation by police for possibly violating European Union sanctions by providing services to Russian oligarchs with ties to the Kremlin.

A total of 36 law firms are the focus of an internal probe carried out by the Cyprus Bar Association concerning offering services to Russian oligarchs imposed on Russia over Ukraine.

In comments to Phileleftheros daily, the head of the Bar Association, Christos Clerides, said the association launched the probe after witness material arose over some Cypriot law firms violating EU sanctions.

Evidence points to the firms’ offering services prohibited by the EU following sanctions on Russian oligarchs over Russia’s invasion of Ukraine.

Clerides said the Bar Association had forwarded findings for the four firms in question to the police for further investigation. Findings concerning a fifth firm will be sent on Thursday, Clerides said.

He said that the probe investigated whether these firms had violated sanctions imposed by the EU and the United Nations when the war broke out in Ukraine.

“The probe initially looked into the actions of some 35 firms who were offering services to Russians who were on EU and UN sanctions lists, with another added later on,” said Clerides.

As he said, when the UN and the EU imposed sanctions, the association had sent out a circular to its members, asking them to confirm the nature of service they offer to Russian oligarchs on sanction lists.

The Bar Association has so far conducted two surveys, with a three-member committee assigned to evaluate responses.

Amongst the 36 law firms on the Bar Association’s radar is Christodoulos G. Vassiliades LLC, which has been included on US and UK latest sanctions lists.

Clerides noted that not all firms probed are on sanctions lists, but because they had been offering services to Russian oligarchs at least up until the date EU and UN sanctions were imposed.

The probe is expected to be completed sometime in June.

Clerides noted that in Cyprus, instructions could be given to investigating criminal offences for violation of sanctions only if the EU or the UN imposed these.

Something that cannot be done with sanctions imposed by the US or Britain.

Frozen accounts

Meanwhile, banks in Cyprus have moved to freeze accounts of clients tied to sanctioned entities, while Cyprus is bracing for a second tranche of sanctions from the US and UK on Friday.

Frozen accounts encompass clients that used the now-sanctioned firms for licensed administrative services, including trustee, directorship or nominee shareholders.

The Bar Association said some 400-600 companies had received legal services from sanctioned companies.

Hundreds of employees working for the sanctioned companies and affiliated firms have yet to be paid since April.

In comments to state TV CyBC, the Bar Association’s spokesperson Georgia Constantinou Panayiotou called on the government to take measures to distinguish between entities included on sanctions lists and those who had only received legal services from them.

“We’re talking about a domino effect on employees’ earned wages, which are constitutionally protected.

“It is urgent to find the mechanism to be able to grant exceptional permits for the payment of salaries”.

Nicosia has been in damage-control mode since sanctions were imposed by the US and UK last month on Cypriot ‘fixers’ for allegedly helping Russian oligarchs hide their assets following sanctions imposed on Moscow.

A total of ten Cypriots and 13 foreign-born Cyprus nationals, “oligarch enablers,” have been sanctioned by the US and the UK, with authorities fearing that more Cypriot entities will find themselves on the list due to exposure to Russia.