Cyprus promises to take action after revelations about role of its companies in hiding Russian assets

Cypriot authorities have vowed to tighten control on the movement of assets through companies in its jurisdiction following a major investigation by a consortium of journalists into the role of Cypriot companies in hiding hundreds of millions of dollars in assets linked to Russian sanctioned individuals.

Source: European Pravda, with reference to The Guardian, a co-author of the investigation

Details: The joint investigation of the International Consortium of Investigative Journalists, which unites investigators from different countries of the world, and the German company Paper Trail Media concerns Cyprus Confidential, a repository of 3.6 million files from an anonymous source about the activities of the Cyprus division of the well-known consulting company PwC.

The documents show that PwC Cyprus used non-transparent offshore structures to hide the assets of the Russians who have been sanctioned by the West and Ukraine since 2014. The documents identify more than 60 of Russia's richest people and at least 71 clients who have been sanctioned since February 2022.

Among other things, the investigation says that PwC Cyprus and other consulting firms helped Alexey Mordashov, one of Russia's most powerful oligarchs, transfer his stake in Europe's largest tour operator TUI, worth of a GBP 1 billion, to an associate on the day he came under EU sanctions.

Cypriot companies also helped make offshore payments worth tens of millions of euros to Russian oligarch Roman Abramovich, probably in violation of accounting rules. Some of them are related to the period when Abramovich owned Chelsea football club.

In response to an inquiry by the International Consortium of Investigative Journalists, the Cypriot government said it is receiving technical support from the British government to set up a unit to monitor the implementation of EU sanctions, which is due to become operational next year.

In addition, Cyprus plans to present a report by the end of November on how its authorities are investigating financial crimes linked to the evasion of Western sanctions.

The Finance Ministry of Cyprus separately announced that it had launched a criminal investigation into one of the transactions uncovered by the investigators - the transfer of the Russian oligarch Mordashov's share in the tour operator TUI. Representatives of Mordashov and PwC Cyprus said they knew nothing about the criminal investigation.

Nikos Christodoulides, Cyprus' new president, who took the position after Nikos Anastasiades in February, almost immediately spoke about the need to crack down on sanctions violations if Cyprus is to maintain its credibility as a business hub.

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