Insiders in the government have confirmed that the Cyprus Police force is investigating an oligarch’s attempt to transfer a £1bn share of a public company, on a day when he was under EU sanctions.
The news of the involvement by the Financial Crime Squad came at the same time as the Cypriot Government and the European Union were responding to revelations about local service providers who appeared to have played an important role in enabling Russian Oligarchs shield their assets from EU sanctions just days after Moscow’s full scale invasion of Ukraine.
The President of Cyprus stated that “nobody is above the reputation” of the country and vowed to take decisive action in response to the revelations.
Nikos Christodoulides, in his first statement after the media partners made the disclosures about the scandals, suggested that his government would act ruthlessly to protect the island’s reputation as an international financial center.
“Everything which has been revealed will be investigated within a set deadline.” “No one is above our reputation,” he said to reporters after the publication Cyprus Confidential. The eight-month global investigation involved the examination of approximately 3.6m documents that were leaked by financial service providers in Cyprus.
“We need to be done with the matter.” “The reputation of our nation, the credibility our country… is crucial in the effort made by all Cypriots, so that we can have a resilient and strong economy.”
He said that only a strong economy would allow the government to pursue a “targeted policy” which allowed it invest in education, health and other sectors.
The leader’s interventions came after Konstantinos Leymbiotis, the government spokesperson insisted that there would be a “zero-tolerance” policy for money laundering, sanctions busting and other illegal activities which could undermine western efforts against Kremlin linked oligarchs hiding their vast wealth.
The leak has raised questions about the role of service providers, such as PwC Cyprus in efforts made by ultra-rich Russian clients to avoid sanctions. This was days after Putin’s “special operation” against Ukraine.
The sanctions come at a sensitive time for Cyprus. The EU member is still recovering from the US and UK sanctions that were imposed on a number of individuals and companies in April, for helping oligarchs hide their assets.
Washington and London called on Nicosia, which assumed office as an independent in March, to take immediate steps to curb the illicit support for Russians that were blacklisted by western countries.
The leader of Nicosia said on Tuesday that the country has not only strengthened the financial sector, but also “the entire institution framework” as part efforts to dismantle the networks which are damaging the reputation of the country.
When asked about the investigation, European Economy Commissioner, Paolo Gentiloni told reporters: “I have been following the Cyprus confidential papers very closely.”
He said that the Commission is still studying the reports, and will respond in full in due time. Sources in the executive said this was a’very serious’ matter and that they had already been in contact with the Cyprus authorities.
Leaked documents suggest that PwC Cyprus assisted Russia’s “richest”, oligarch Alexei Mordashov in his attempt to transfer a PS1bn shareholding in Tui – Europe’s biggest travel company – on the same day as the tycoon had been placed under EU sanctions.
The disclosure raises questions about the possible role of the accounting firm in a sanctions violation.
A spokesperson from the Cyprus Ministry of Finance had said previously: “We know of Tui shares transfers and are conducting a criminal investigation.”
Insiders of the Cypriot government went even further on Wednesday and said that the financial crimes squad of the police force is currently investigating the Tui deal.
PwC, and a Mordashov spokesperson, both said that they had no knowledge of any criminal investigations before being contacted.
A spokesperson for the accounting company responded to the information that was leaked by saying: “Any allegation or non-compliance of applicable laws and regulations are taken very seriously. They are investigated, and appropriate actions taken if needed.”