Concealment of Russian assets in Cyprus, authorities promise to tighten control

Cypriot companies were caught concealing Russian assets during an investigation by a consortium of journalists.

The joint activity of the International Consortium of Investigative Journalism, which brings together representatives from around the world, and the German company Paper Trail Media concerns Cyprus Confidential, a repository with 3.6 million files from an anonymous source about the activities of the Cyprus division of the famous consulting company PwC.

A large-scale investigation into the consortium revealed the role of Cypriot companies in hiding hundreds of millions of dollars tied up by Russian oligarchs. The Cypriot authorities have promised to strengthen controls over the movement of capital, writes The Guardian, which is one of the co-authors of the investigation.

From the documents it follows that PwC Cyprus used opaque offshore structures to hide the assets of Russians who fell under sanctions from the West and Ukraine, starting in 2014. The documents include more than 60 of the richest Russians and at least 71 clients who have been sanctioned since February 2022.

The investigation also says that PwC Cyprus and other consulting firms helped one of Russia’s most powerful oligarchs, Alexei Mordashov, transfer his billion-pound stake in Europe’s largest tour operator Tui to a person connected to him on the day he fell under European Union sanctions.

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

The Cypriot government, in response to a request from the International Consortium of Investigative Journalism, said it was receiving technical support from the British government to establish a sanctions monitoring unit. EU, which should start operating next year. And by the end of November, Cyprus plans to present a report on how its authorities are investigating financial crimes related to evading Western sanctions.

The Ministry of Finance of Cyprus stated that a criminal investigation has already been launched into one of the transactions uncovered by researchers – the transfer of the share of the Russian oligarch Mordashov in the tour operator Tui. Representatives of Mordashov and PwC Cyprus said they knew nothing about the criminal investigation.

Cypriot President Nicos Christodoulides, who replaced Nikos Anastasiades in February, almost immediately spoke of the need to combat sanctions violations if Cyprus is to maintain its credibility as a business center.

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