NICOSIA – The European Parliament has jumped into the brouhaha over a report by investigative journalists that rich Russians were using Cyprus to avoid European Union sanctions over the invasion of Ukraine and hiding their money there.
The lawmakers said bloc officials should intervene to tighten anti-money laundering measures with the report called Cyprus Confidential adding to the island’s reputation for rich Russians using it to secret their wealth.
During a European Parliament session there was a call for the spotlight to be put on the Greek-Cypriot side of the island and for more stringent penalties if sanctions were found to be violated, Cyprus known for being Russian-friendly.
An expose by the International Consortium of Investigative Journalists, in partnership with Paper Trail Media and 67 media outlets said Cyprus is essentially a conduit for dirty Russian money.
Dutch EU lawmaker Sophie In ‘t Veld, the Parliament’s rapporteur for the Directive on the definition of criminal offenses and penalties for the violation of Union restrictive measures, said that any member state that allows oligarchs violate sanctions should be held accountable.
“When it’s about corruption and financial wrongdoings, the national authorities very often are the culprits. They’re complicit,” she said. “The European Union is turning into a gangster’s paradise, because there is complete impunity.”
The Cyprus Confidential investigation is based on more than 3.6 million leaked documents from six Cyprus-based providers and a website company. The investigation said financial services firms enabled Russian oligarchs, including those close to President Vladimir Putin, keep their wealth hidden there.
It said that after Russia first went into Crimea in 2014 and invaded in 2022 that Cyprus was used to stash away billions of dollars in assets from the threat of impending sanctions.
Dubravka Šuica, the EU Commission’s Vice-President in charge of democracy and demography, said the commission takes any “allegation of breaches of European sanctions very seriously,” but didn’t say if anything would be done.
“A year and a half after the beginning of Russia’s war of aggression against Ukraine, it is essential for us to stay vigilant about any violation or circumvention attempts that could weaken the intended impact of our sanctions,” Šuica said.
She added that EU officials are monitoring Cypriot authorities’ response to the Cyprus Confidential revelations, which typically lead to little or nothing being done once the headlines have died away.
Cypriot President, Nikos Christodoulides said after the revelations that his government would look into the findings with help from a team of financial crime experts from an unnamed “third country.”
“Our aim is exactly so that there are neither insinuations or any shadows cast over our country’s name,” Christodoulides told the Associated Press, adding that bad publicity “negatively affects our ability to attract private investment.”
Cyprus is currently in the process of creating an independent body that will crack down on financial crimes or sanctions evasion, and a draft law has been readied for parliamentary debate and approval, the AP reported.
Cypriot media reported some initial resistance to his plan, the daily news site Phileleftheros saying, there is currently disagreement over whether to create an independent panel to review the claims, the Cyprus Bar Association opposed.
As of 2020, more than $200 billion in Russian investment allowed Russian oligarchs to wield significant influence in Cyprus’ political and financial affairs, according to a study by Sofia-based Center for the Study of Democracy.
“Decisive action against enablers in the non-financial sector is long overdue in Cyprus and beyond,” Maíra Martini, the advocacy group’s interim head of policy, said. “These enablers cater to the super-wealthy from around the world, with no questions asked,” she said.