The publication of the US-British list of sanctions against those who violated the measures against the Russian oligarchs actually ended the grace period of the new Cypriot government ahead of schedule. The presence on the list of two individuals and entities of interest to Cyprus stirred up the government camp, reviving memories and situations of the recent past, when Cyprus was presented as the “black sheep” of the EU. on money laundering issues.

In fact, according to well-informed K government sources in Nicosia, the Cypriot side expects an updated list of sanctions in the near future, which will include additional individuals related to the Republic of Cyprus. According to the first information, these persons are allegedly foreign nationals who nonetheless naturalized as Cypriots, apparently under the Cypriot investment program with “golden passports”, which has been abolished since October 2020. It remains unclear whether these are Russians who have obtained Cypriot citizenship, whether they continue to have permanent residence in Cyprus, or whether they continue to do business on the island. Regarding the two individuals and entities on the first sanctions list, the US authorities requested additional information from the Cypriot Ministry of Justice and the Cypriot police.

Two individuals and entities are already included in the US-British sanctions list, while Nicosia fears that the number of Cypriot interests involved will increase.

Two meetings of the government, held at the Presidential Palace in Nicosia, asked: firstly, to explore the scope of the problem and, secondly, to make it clear that the Republic of Cyprus is “body and soul” on the side of the international community. . In a not-so-common practice for such a sensitive issue, the director of the Compliance Department of the Bank of Cyprus has publicly stated that the Cypriot banking system is voluntarily applying US and UK sanctions, which he called “excessive”. “We are not just a European state, but a state adopting best practices in the field of combating economic crime.” The limitation of international influence in Cyprus, as well as the possible impact on its banking system, has led to the fact that “suspicious accounts” were leaked to the daily press, mainly by Russians who live or conduct their business in Cyprus. The start was made by “freezing” the accounts and banking operations of two individuals and legal entities of interest to Cyprus, included in the sanctions list. This was followed by the publication, without any refutation, of data on 4,000 accounts of Russian citizens that are in the process of being closed, about which the beneficiaries were informed by Cypriot banks. The banks claim that the beneficiaries are not permanent residents of Cyprus, however, the time when the Cypriot banking institutions determined that the provision of banking services is beyond the policy (due diligence, Know Your Customer) raises questions. The Russians who receive the letter are given two months to close their accounts or provide evidence that they permanently reside in Cyprus. In the same vein, as officially announced, in recent years, 43,000 Cyprus-based shell companies have been deactivated, 123,000 bank accounts have been closed, and today only 2.2% of all deposits have Russian citizens as ultimate beneficiaries.

The presence of the Minister of Foreign Affairs, as well as the Assistant Attorney General, at both meetings at the Presidential Palace in Nicosia shows that the aim of the Cypriot government is to prevent events and close any gaps in the fight against money laundering. At the diplomatic level, the Cypriot side hastened to assure the American side of its determination, while Foreign Minister Konstantinos Kobo conveyed to the American Ambassador in Nicosia, Julie Fischer, the message that the Cypriot government thus expresses its readiness to cooperate with the United States, showing that it is not hiding anything .

However, the turn that the sanctions list issue has taken also reveals the gaps that appear to exist in the area of ​​money laundering control due to the role of the public authorities of the Republic of Cyprus. In this area, opinions are already being expressed about the role of intelligence services, practices being applied by other countries, as well as by legislators to prevent and combat money laundering. If and until after the evaluation of the requested data it is proved that the two individuals and entities actually violated the sanctions, then the question arises for the public authorities that did not actively act to prevent the use of Cyprus. financial system for money laundering, which is provided for by the legal framework for their functioning.

Oligarchs and intermediaries from Limassol

Ksenia Kunalaki

Themed discos on the green estates of Surrey, half an hour from London, friendship and business with famous Russian tycoons such as former Chelsea owner Roman Abramovich, who has been on the sanctions list for a year: the social and business relations of a Cypriot businessman based in Limassol with by Russian oligarchs, are at the center of a major investigation by the British newspaper Guardian about the Cypriot finger, bypassing the London and Washington sanctions. Revelations about hiding the assets of Vladimir Putin’s mother through shell companies led to the inclusion of the Cyprus factor in the list of Western sanctions a few days ago, more than a year after the start of Russian sanctions. invasion of Ukraine.
His company’s headquarters in Limassol is located in a complex of white buildings, and according to reports, he specializes in controversial investment schemes that favor those who wish to obtain Cypriot citizenship (golden visa). For their large clients, the company’s employees used code names. For example. Abramovich is referred to as “Mr Blue” in their emails, possibly due to the colors of the Chelsea football team.

In the same journalistic study, we also find the name of Konstantin Malofeev, known in Greece for trying to create a television company in our country by connecting eleven regional stations. With the help of a Cypriot company, Malofeev continued to transfer millions of dollars into the international financial system for years. Russian oligarch allegedly finances pro-Russian separatists in eastern Ukraine. In fact, according to The Guardian, he is regarded by the Americans as “one of the main sources of funding for advancing Russian interests in eastern Ukraine and Crimea.” He is called an “Orthodox oligarch” because of the support of the Russian Church, and he calls the war in Ukraine “holy”.

Having founded his firm Marshall Capital Partners, whose investors include the French insurance company Axa, Malofeev directed his entire fortune to create a media empire. Its flagship channel, the Christian-Orthodox TV channel Tsargrad (the Slavic name for Istanbul), has become Vladimir Putin’s main propaganda vehicle, promoting a mixture of Christian bigotry and Soviet nationalism. It is noteworthy that he and the Russian president have a common spiritual leader, Bishop Tikhon. The notorious Alexander Dugin, the theorist of the Eurasian Union and the ideological mentor of Vladimir Putin, was the first head of the Tsargrad station. It was Malofeev, as a family friend, who made the statement when Dugin’s daughter was killed a few months ago, calling this act “terrorist with encroachments on the Ukrainian Nazi regime.” A few weeks ago, Russian intelligence agencies said they had thwarted a similar attack on Malofeyev himself, using an improvised explosive device.
To build a Western-standard television network, Malofeev hired former Fox News producer Jack Hannick. For the security of the Tsargrad Canal, a former intelligence agent, Colonel Igor Girkin, was recruited, who later became a paramilitary commander and then “defense minister” in the self-proclaimed Donetsk region in eastern Ukraine. He was even convicted in connection with the missile attack on Malaysian Airlines Flight MH17 over eastern Ukraine that killed 298 people. Another associate of Malofeev was appointed governor of the region.

Malofeev’s relationship with the Cypriot company began back in 2005, when he founded Marshall Capital Partners. He was one of the most prominent Russians on the sanctions list against Russia after the annexation of Crimea. The EU has imposed restrictions against it since July 2014, and the US in December of the same year.

However, according to the Guardian, for the next three years and until 2017, he remained a client of a Cypriot offshore service company, whose employees helped enterprises associated with Malofeev transfer money and issue loans, even in US dollars. The company itself was placed on a UK sanctions list last week following further revelations by a British newspaper about its role in moving funds from former Chelsea team owner Roman Abramovich. New concerns about financial controls in Cyprus emerge from documents dubbed the “Oligarch Files” and obtained by The Guardian. The firm allegedly continued to facilitate the oligarch’s $35 million and €2.5 million deals until it ceased to act on Malofeev’s behalf in the spring of 2017.

The “oligarch case” arose from leaked documents from a Cypriot company that repeatedly posed as a shareholder, using subsidiaries to protect the real owners of funds from unwanted scrutiny.
In the case of Roman Abramovich, Cypriot intermediaries used shell companies to hide the identity of the former Chelsea owner, who invested millions of dollars in the early stages of US cannabis production, as well as in other sectors such as energy and banking. It is recalled that shortly before the Russian invasion, Abramovich passed all his assets to his children through foundations. The Times of London recently wrote that a £2.3 million apartment in London’s Kensington legally belongs to the 8-year-old (!) daughter of a former Russian governor.

“Cyprus holding provides an ideal entry into the EU,” promises the company’s website, specifying that Cyprus has tax agreements with more than forty countries, including Russia, Ukraine, Iran and China. The Foreign Office spoke of Cyprus-based “persons who assisted the oligarchs” and expanded the list of sanctions against Russia to include another Cypriot lawyer who is accused of having links with fellow oligarch Alisher Usmanov, the former owner of Arsenal.