A global investigation on Tuesday revealed how Russian influence in Cyprus and on local service providers helped oligarchs and billionaires structure their wealth over the years preceding the 2022 full-scale invasion of Ukraine.
The report titled ‘Cyprus Confidential’ was compiled by International Consortium of Investigative Journalists (ICIJ) and the Organised Crime and Corruption Reporting Project (OCCRP), according to whom more than 270 journalists from 68 news organisations worked on the investigation over eight months, cooperating from 55 countries and regions.
The investigation dealt extensively with corruption, sanctions-busting and how Russian wealth was allegedly shielded, relations with Russia, the role of the banking sector and of independent institutions and the well-documented golden passports scandal.
It specifically said that leaked documents show staff at PwC Cyprus hurried to restructure companies belonging to Russian oligarchs as the prospect of sanctions loomed.
“Now Cyprus says it is investigating one case in which PwC staff appeared to work on the transfer of an oligarch’s assets in the days after he was sanctioned by the EU,” the report says.
According to the investigation, that examined over three million documents, PwC helped Alexey Mordashov arrange to transfer his stake in TUI Group to his life partner just as the EU sanctioned him in February 2022 over Russia’s invasion of Ukraine.
Documents relating to the share transfer were still being circulated for sign-off in the first days of March 2022, raising the possibility that PwC Cyprus breached the fresh EU sanctions against Mordashov, it said.
“Cyprus’ new sanctions unit said it was aware of the TUI share transfer and that a criminal investigation had been launched, but did not name the target of the probe,” it added. “PwC also helped move a company and assets belonging to metals magnates Alexander Abramov and Alexander Frolov to their sons ahead of UK sanctions.
“Like other pro-Kremlin billionaires, Mordashov described by Forbes as Russia’s richest person in 2021 was at risk of having his European assets frozen if authorities sanctioned him in response to the invasion,” the report said.
“At PwC Cyprus, staff exchanged documents marked ‘URGENT’ and ‘PLEASE APPROVE’ as they prepared paperwork to sell Mordashov’s stake in German travel company TUI Group reportedly worth well over $1 billion to a British Virgin Islands company owned by his life partner, Maria Mordashova. The Financial Times described the sale as an attempt by Mordashov to “outpace” EU sanctions.”
Speaking earlier on Tuesday, Government Spokesman Konstantinos Letymbiotis said: “We have seen the publications. Our country has fortified its position in recent years. We say this with certainty and self-confidence because we know the framework that our country now has and that it applies.”
He said a meeting was held last week under the president to monitor the implementation of the latest measures taken by the government, and Cyprus would continue to further protect its financial system and the credibility of the country.
This was also demonstrated by the reports of Moneyval and economic assessments. There would be an immediate statement from the government and an investigation if necessary, he added.
To another question, he said that the measures that have been taken in the last year and in previous years were clear, and the positions of the US and UK governments regarding the credibility of the Republic of Cyprus and its immediate response regarding the sanctions were also relevant.
“We are certain that today the Republic of Cyprus is a reliable country, with a reliable financial system, possibly with one of the strictest frameworks surrounding it, and we will continue to maintain this reliability,” Letymbiotis said. “Tolerance for money laundering or sanctions-evasion is zero and will continue to be zero.”
Responding to a question on whether last week’s meeting was to get ahead of the publication, Letymbiotis answered in the negative, noting that the meeting was a follow-up to the decisions of the Council of Ministers in June 2023, which aim at more strengthened, effective implementation of sanctions.
After the meeting last Wednesday, Letymbiotis said the government was working towards safeguarding Cyprus’ name abroad where sanctions were concerned.
Technical support from the British government on creating a sanctions implementation unit was in its final stages and details are expected to be submitted within the month. The scope of the technical assistance has also been broadened to include the creation of a supervisory authority, Letymbiotis said.
Cyprus went into damage control mode in April this year after the US and UK sanctioned 23 Cypriot passport holders and over a dozen companies registered in Cyprus. They were deemed to be “financial fixers” helping sanctioned Russian oligarchs Roman Abramovich and Alisher Usmanov to hide their assets in complex financial networks.
Lawyer Christodoulous Vassiliades stood out as the individual who was sanctioned by both countries. Russia issued an arrest warrant against him last month, for which he was accused of being involved in a “large scale” money laundering operation by an organised group in Russia.
Cyprus moved quickly to freeze all accounts of all sanctioned individuals, with the central bank director saying not doing so would have been catastrophic for the economy. Earlier this month, four people and two companies linked to Cyprus were included in new US sanction list.
Contents of this article including associated images are belongs Cyprus Mail
Views & opinions expressed are those of the author and/or Cyprus Mail
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