Members of parliament in Cyprus are furious that the authorities have tolerated yet another scandal, tarnishing the island’s business reputation further, this time allowing disgraced Chelsea boss Roman Abramovich to get away with a €14 mln fraud, by evading taxes for his yacht chartering business.
Alexandra Attalides, deputy for Volt Cyprus, aimed her fury at the Attorney General, saying the Republic’s legal advisor and other government officials were aware that the oligarch’s company was nothing more than a money laundering operation.
The Russian tycoon’s company, Blue Ocean, was dissolved, its directors vanished, and the money can no longer be recovered after 12 years of court battles.
“Who allowed €14 mln to disappear, that should have gone to the state treasury?” Attalides demanded to know.
“Who sends citizens to prison because they owe the state €1,000 for VAT or in outstanding social insurance contribtions, but allowed an oligarch not to pay what he owes and have no repercussions?”
The MP, known for her vocal campaigns against corruption, said in a radio interview that all state services were informed in advance and had the opportunity to prepare for the questions at the House watchdog committee hearing last Thursday.
“However, the Attorney General – and consequently the Legal Service – chose not to take a position on the issue. We demand transparency and accountability as a prerequisite for the rule of law,” Attalides said.
Fake chartering scheme
The Cyprus-based company, owned by sanctioned billionaire Abramovich, had set up a fake luxury yacht chartering scheme in what appears to have been a blatant attempt at tax avoidance, according to an investigation conducted by OCCRP, the global network of investigative journalists, and its Cyprus partner, CIReN.
Cypriot MPs are now demanding that the Attorney General appear before the parliamentary committee by May 29 to explain his stance, as they say he was aware of the case.
Cyprus Tax Commissioner Sotiris Markides stated before the Parliamentary Standing Committee on Development Plans and Public Expenditure Control that “no settlement was made before its dissolution” with Blue Ocean — meaning the tax debt was never paid.
Speaking later to CIReN’s investigators Kyriakos Pieridis and Christodoulos Mavroudis, Markides clarified that “the unpaid VAT related to the period 2005–2010 and could not be pursued by the Cypriot authorities after so many years because Blue Ocean no longer had any directors.”
This revelation by the Tax Commissioner sparked outrage among MPs, who are demanding explanations from the Attorney General, saying he knew of the case, but did not attend the session to explain his position.
“The position of the Attorney General is very important, and the issue is critical, because it appears the Tax Commissioner referred the case to your office for legal opinion,” said Committee Chairman and DIKO MP Zacharias Koulias, addressing a representative of the Attorney General’s Office.
The representative stated before MPs that she was not personally handling the case, adding, “I came to listen, I cannot comment now, and a written response will be submitted later on behalf of the Attorney General’s Office.”
No way to recover lost VAT
Markides told CIReN that “there is no way to recover the VAT after the company has been struck off, not even through reinstatement,” a condition provided for in Cypriot law.
“Let’s say we reinstate the company — then what? It has no directors. Am I supposed to go 20 years back to track down directors from 2005, 2006, 2007 and ask them what happened?” he asked rhetorically.
“From whom can I collect money, when the company no longer exists?”
He also argued that the Tax Department “could not pursue the VAT claim while the matter was pending before the Cypriot courts.
“As you know, they had the most expensive lawyers,” he remarked, pointing out that the Tax Department had been pursuing the unpaid VAT since 2012, but the case was only definitively resolved confirming the debt by the Supreme Court in March 2024.
Registrar of Companies Irini Mylonas confirmed to CIReN that “Blue Ocean Management Limited was definitively struck off the register on July 19, 2024, because it had been without a Director and Secretary since March 15, 2022.”
According to a written statement by the Registrar obtained by CIReN, the process to strike off the company began in 2022, was interrupted after an objection from the Tax Commissioner, but eventually, “this objection was withdrawn on June 17, 2024,” and thus, “on July 19, 2024, Blue Ocean was officially removed from the registry with a notice in the Official Gazette of the Republic.”
MP Attalidou raised several questions during the parliamentary hearing, emphasising the key issue of whether “the Attorney General issued a legal opinion before Blue Ocean was dissolved” regarding how the outstanding debt should be handled.
Speaking to CIReN, Attalidou criticised the Attorney General’s stance and said she intends to report the case to the Anti-Corruption Authority as well as to the European Public Prosecutor’s Office, since it involves lost VAT revenue.
Prior to the committee session, Auditor General Andreas Papaconstantinou stated that his office “received a related complaint and requested information from the Tax Commissioner to investigate the matter, which it is still awaiting.”
Opposition AKEL MP Irene Charalambidou told the parliamentary committee that “the Abramovich case adds to many other corruption cases in which excessive delays in investigations and findings lead to the erosion of justice.”
AKEL MP Christos Christofides told CIREN that in the next session, that apart from the Attorney General, the Finance Minister should also attend and provide answers, as he had submitted a written question months ago and never received a response.
The Tax Commissioner said he plans to attend the next House committee meeting in order to further explain his position.
