July 16, 2024

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"Secrets of Cyprus" (Cyprus Confidential) became the main topic of investigation and debate in the European Parliament

On Wednesday, November 22, MEPs discussed the “Secrets of Cyprus” presented in the journalistic investigation. They are outraged that the island’s financial industry has been used by billionaires and sanctions violators to strengthen the regime of the Russian president.

On debate in Strasbourgwhere representatives of the European Commission and the Council were present EU, there was a proposal to cancel “golden passports”. There has been outrage over alleged ties between Cyprus and Russia amid the ongoing war in Ukraine. Finnish MP Pirkko Ruohonen-Lerner said:

“For example, the Cyprus office of PwC helped Putin and his friends at the same time that Russia was waging war against Ukraine. Companies in Cyprus helped sanctioned Russians get around them. The financial sector of Cyprus was full of Russian money. The Russians invested more than $200 billion in Cyprus.” .

The deputy recalled that until recently Cyprus had citizenship schemes in which for 2 million euros one could actually buy an EU citizen’s passport, which Russian oligarchs took advantage of. She proposed banning “golden visas” not only in Cyprus, but throughout the EU, and declaring purchased citizenship invalid.

Parliamentarians noted that through “golden passports” and visa schemes, Cyprus contributed to Russian influence, and also called for the introduction of criminal penalties at the European Union level for circumventing sanctions and closing existing loopholes. Belgian MEP Saskia Bricmont called the actions of financial companies in Cyprus “complicity with Putin’s Russia”:

“The Cypriot authorities are already known for their soft approach, which has allowed dirty business to flourish there in the past, but now with Russia the situation is even worse. There is a real threat here.”

She pointed out that the European Parliament has repeatedly demanded that legislative measures be taken to ensure the implementation of EU laws. European Commissioner for Democracy Dubravka Suica recalled that violating sanctions is a criminal offense in most member states. However, the definition of these offenses, as well as the types and degrees of penalties, vary significantly across the EU. In 2022, the European Commission proposed a directive to harmonize definitions and penalties for sanctions violations.

The proposal provides a detailed list of criminal offenses related to sanctions evasion and specific examples. In June, the EU Council, at the level of justice ministers, developed a common approach to a bill to toughen penalties for circumventing sanctions. This approach will become the basis for negotiations with the European Parliament to develop a common position on the bill.

The deputies thanked the journalists for exposing the alleged crimes and expressed outrage that it was not the authorities who did this. Against this background, members of the European Parliament demanded greater intervention by EU institutions in regulating such issues and punishing violations at the level of the entire European Union.

Parliamentarians from Cyprus also demanded justice for the criminals and called ignoring corruption a systemic problem, but emphasized that they would defend their country. Lucas Furlas said that “Cyprus has been made a scapegoat,” and Eleni Stavrou called for sanctions against Turkey for occupying part of the island, similar to those applied to Russia. “Cypriots paid a high price for receiving Russian money,” says Demetris Papadakis, as EU sanctions against Russia have negatively affected the island’s tourism business and its farmers, and driven investors to Turkey and the part of Cyprus occupied by it.

A special national unit to monitor compliance with sanctions is being created in Cyprus, European Commissioner Suica said. Immediately after the publication of the investigation, “The Secrets of Cyprus,” its president, Nikos Christodoulides, promised to launch his own investigation, adding that the country’s reputation was at stake.

Brussels assures that the upcoming twelfth package of sanctions In relation to Russia, it includes a much more reliable system for blocking possible ways to circumvent penalties. According to the Secretary of State for Foreign Affairs of the Spanish Presidency of the Council of the EU, Angeles Moreno Bau, cooperation between the EU countries and the European Commission is extremely important in this area:

“It is important that all sanctioned goods and technologies are blocked, but especially all military means that Russia could use for military purposes to continue its aggression against Ukraine. Given the scale of the measures being taken, it is very important that they are applied correctly and in accordance with legal requirements “.

As part of the Cyprus Mysteries project, the International Consortium of Investigative Journalists (ICIJ) found, for example, how PwC Cyprus collaborated with small firms that specialized in creating shell companies and providing the services of shell directors to dozens of Russians with ties to the Kremlin. The investigation showed that before Russia’s full-scale invasion of Ukraine, the list of clients of the Cyprus division of PwC already included 12 Russians who were under sanctions for the annexation of Crimea and military aggression in the Donbass.

During the project, journalists from Important Stories, Paper Trail Media, Der Spiegel, ZDF and dozens of other media outlets studied the leak of 3.6 million documents from six Cypriot companies involved in company registration and consulting.

Our publication wrote about the journalistic investigation earlier in the material “Concealment of Russian assets in Cyprus, authorities promise to tighten control.”

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