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Greek Investors Lose Appeal Against 2013 Cyprus Bank Account Confiscations

NICOSIA – The World Bank’s International Center for Settlement of Investment Disputes (ICSID) ruled against Greek investors who lost $600 million in bonds and deposits in Cypriot banks in 2013, the funds seized on government orders to prevent their collapse.

As did Cypriots and others with money in banks, 54.5 percent of deposits over 100,000 euros ($108,405) was taken although then newly-elected President Nicos Anastasiades had vowed during his campaign he wouldn’t allow it.

No bank officials, as he promised, were held accountable nor action taken against banks for their big holdings in Greek bonds that were devalued in Greece when that country was going through an economic crisis.

Cypriot banks also lost money on loans to Greek businesses that weren’t repaid, leading to a so-called “haircut” in which investors and depositors on Cyprus had much of their money seized, some losing big chunks of life savings or business accounts confiscated.

Attorney-General George Savvides hailed the decision to let the investors lose their money and said the court decision “vindicates” Cyprus which said the action was necessary to protect the banks at the cost of the depositors.

The investors appealed in the case Theodoros Adamakopoulos and others v. Republic of Cyprus and initiated arbitration based on the bilateral agreements between Greece and Cyprus and Luxembourg and Cyprus.

“It is with great pleasure that I want to inform you that this request was rejected” by the ICSID, after a hearing that took place in London at the beginning of 2023, he said, noting that the decision was final.

Other depositors had also sued but lost with courts finding that it was necessary to take their money to save the banks. There were raucous protests on the island when the accounts were partially seized.

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