The Cypriot authorities ordered banks to stop transactions with the ruble amid an investigation into cases of Russians circumventing international sanctions by involving Cypriot companies.
About making an appropriate decision reports Cyprus Mail on Tuesday 5 December. The reason was the US decision to send a team of FBI and Financial Crimes Enforcement Agency employees to Cyprus to participate in the consideration of 29 court cases related to circumvention of sanctions against Russia. The government message says:
“Local banks are required to stop all transactions with the Russian ruble. Inspections have also begun at local law firms due to possible abuse of the accelerated business registration procedure for Russians, which gave them the opportunity to quickly obtain residence permits, work permits and tax benefits.”
As our publication reported, November 22 MEPs discussed “Secrets of Cyprus” (Cyprus Confidential), presented in a 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. The investigation, among other things, concerned investments by Russian entrepreneurs on the island and the issuance of “golden” passports. At the debate in Strasbourg, where 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.
The European Parliament has repeatedly called for legislative measures to ensure compliance with 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 evasion of sanctions 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 became the basis for negotiations with the European Parliament to develop a common position on the bill.
In an effort to “whiten” the island’s reputation as a business and financial center, the Cypriot authorities created a unit to monitor compliance with the international sanctions regime.