NICOSIA – Long a haven for wealthy Russians to hide their cash, Cyprus reportedly objected to the European Union removing Russia from the international SWIFT banking transaction scheme as one punishment for invading Ukraine.

Italy, Hungary and Germany – which is where Russian gas from the planned NordStream 2 pipeline would arrive – also reportedly barred any idea of the EU keeping Russia from continuing to be able to use SWIFT.

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CNN said it was told by senior sources it didn’t name that there was division in the EU about how tough to get with financial sanctions that otherwise could be weakened if Russia can still use SWIFT.

At the head of the pack is Cyprus, whose government has given some 1,000 rich Russians residency permits and EU passports under a program that was ended in November, 2021 after reports it was being used by criminals and money launderers.

SWIFT is a message system and a high-security payment network that connects thousands of financial institutions around the world that allows international transfers.

Despite tough talk about the Russian invasion, the EU is treading carefully because the bloc depends on Russian energy and when there was talk in 2014 of taking Russia out of SWIFT over its annexation of Crimea, President Vladimir Putin said it would be a cause for war.

In an opinion piece in the US news site The Hill, that specializes in covering American and world politics, Martin J. Sheil, a retired supervisory agent for the IRS Criminal Investigation, said a so-called Money Laundering Death Penalty should be put on Cyprus.

The island is so rife with Russian money and influence that it is sometimes called Moscow on the Med and President Nicos Anastasiades has at times leaned toward Russia and Putin.

“The U.S. Treasury should declare Cyprus a jurisdiction of ‘primary money laundering concern.’ Western Banks would cease transacting with banks within such a jurisdiction,” wrote Sheil.

He said it could be done under the Patriote Act that allows the Financial Crimes Enforcement Network (FinCEN) to declare individual international banks likely money launders and cut them off from transactions.

He noted that the BBC in 2013 reported that, “It is estimated that one-half to a third of all Cyprus bank deposits are of Russian origin,” and in 2020 Al Jazeera reported the residency permits given wealthy Russians.

CNN corrected its previous reporting on the matter and following the comments made by Ukrainian President Zelenskyy, Cyprus, along with its EU allies back severe sanctions on Russia.

DIRTY RUSSIAN MONEY

In July, 2019, anti-corruption and human rights activist Bill Browder pointed out what he called the problem of dirty Russian money on Cyprus – adding to his being targeted by the Kremlin for speaking out.

The US born British financier, who has campaigned against Putin and Russian organized crime, told Politico then that,” Russian organized crime has fully infiltrated Cyprus law enforcement.”

“The Cypriot authorities are effectively welcoming Russian laundered funds by not creating any consequences for the launderers,” Browder said. “Russia has been using Cyprus as the Trojan horse to getting money into Europe. It’s one of the weak links for Europe to fight Russian organized crime.”

“The West can’t shut down SWIFT because (let’s name them) Germany, Hungary, Italy and Cyprus don’t care about the invasion or the Ukrainian dead. Can they at least sanction the banks and companies the US is sanctioning? And the heads of those companies? Or is that too hard?” tweeted former Estonian President Toomas Hendrik Ilves.

Ukrainian Minister of Foreign Affairs Dmytro Kuleba said: “I will not be diplomatic on this. Everyone who now doubts whether Russia should be banned from SWIFT has to understand that the blood of innocent Ukrainian men, women and children will be on their hands too. BAN RUSSIA FROM SWIFT.”

Banning Russia from SWIFT would make it almost impossible for financial institutions to send money in our out of the country, crippling Russian businesses’ ability to transact with foreign customers the report added.

The Society for Worldwide Interbank Financial Telecommunication (Swift) is used by more than 11,000 financial institutions to send secure payment orders and essential for Russia to move oil and gas profits – without which it would lose up to 40 percent of its revenues.

Al Jazeera had noted that Russians landing at Larnaca International Airport see signs – in Russian – offering investment opportunities, luxury properties and agents – including Anastasiades’ family law firm – offering assistance to affluent investors around the world.

Residency was given to three senior offiials in VTB – often called The Kremlin’s Bank – which had faced sanctions, Cyprus looking the other way in this case.

Among the 1,000 Russian names are some of the country’s richest men, with Al Jazeera identifying at least nine oligarchs, each worth more than $1 billion, and more than a dozen of their relatives were also approved.

That lets them use banks on the island to move money around the world with less chance of being flagged “high risk” because they are effectively EU citizens, the bloc unable to do anything about it.

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