The latest investigation by the International Consortium of Investigative Journalists (ICIJ) shed light on Russia’s “long-standing hegemony” over Cyprus’ deeply intertwined political and financial worlds.
The Cyprus Confidential investigation discloses how 67 of 105 Russian billionaires listed on the 2023 Forbes World’s Billionaires leveraged financial services firms on the island to conceal their wealth, safeguarding it from Western sanctions.
Drawing from a pool of 3.6 million leaked documents spanning six firms in Cyprus, the investigation encompasses data primarily from the mid-1990s to April 2022, just two months after the Russian invasion of Ukraine.
Russia’s invasion of Ukraine in February 2022 prompted Western governments to impose sanctions on numerous Russian billionaires.
The ICIJ asserts that clients of Cypriot firms include 25 Russians who faced subsequent sanctions by the West after Russia annexed Crimea in 2014.
However, it remains unclear whether all these relationships persisted.
Fergus Shiel, Managing Editor of ICIJ, challenges the notion that financial sanctions have effectively halted the flow of Russian dark money, pointing to the wartime movement of hundreds of millions of dollars in assets.
A significant revelation from the report is the deep involvement of Cyprus firms in facilitating substantial asset transfers for sanctioned Russian oligarchs.
Leaked documents outline how PwC Cyprus and Cypcodirect, a firm founded by a former PwC Cyprus partner, aided a sanctioned billionaire, Alexey Mordashov, in transferring a significant stake in the German travel firm TUI Group to his wife, Marina, just a day after EU sanctions were imposed.
The transfer, valued at $1.4 billion, was later provisionally blocked by German authorities.
The investigation further links Cypriot firms to other sanctioned Russian billionaires, including Alexander Abramov, Alexander Frolov, and Oleg Deripaska.
It details instances of fund transfers and asset management changes following sanctions.
Notably, the probe implicates Cypriot firms in the financial dealings of Roman Abramovich, a sanctioned oligarch and former owner of Premier League side Chelsea.
The report outlines how Cypcodirect and MeritServus managed numerous companies and trusts owned or controlled by Abramovich.
The UK has sanctioned Meritservus for allegedly assisting Russian billionaire Roman Abramovich to hide assets following US and UK sanctions.
Shiel said elaborate shell company networks orchestrated by Cypriot financial providers shield the ultimate owners of assets from transparency and accountability.
The investigation also uncovers the wealth management practices of Russian billionaire Pyotr Aven, who held a significant portion of his wealth in Cyprus-based trusts administered by Abacus Ltd.
In response to these revelations, Nicosia has pledged to investigate the allegations that Cyprus serves as a hub for money laundering, allowing Russian oligarchs to circumvent sanctions.
The country has already revoked the citizenship of over 200 individuals since 2020, including several sanctioned oligarchs, following the discontinuation of its “golden passport” program.