NICOSIA. The storm of sanctions from the United States and Britain necessarily tightens the noose for Russian clients of Cypriot banks, for whom there is no longer room for escape.
Already, according to the information, the Bank of Cyprus alone has sent close to 6,000 letters to Russians, natural and legal persons, informing them that it intends to close all their accounts with the bank unless they present reliable information within a reasonable period of time that they reside legally in Cyprus. This information includes place of residence, electricity bills, tax returns and more.
It is clarified that the letters are not addressed to Russians who normally reside in Cyprus, but to Russians who are outside Cyprus and outside the European Union, but transfer money through their accounts in the Cypriot bank.
According to banking sources due to the fact that Russia is now sanctioned as a “non-cooperative entity” based on the Financial Action Task Force (FATF), these clients are considered high risk. However, as the same sources reiterated, these letters concern customers with Russian passports who do not reside in Europe. Based on the above, it is now clear that the Bank of Cyprus, as well as other banking institutions, are trying to prevent possible negative developments, for this reason they are taking preventive actions, effectively cutting any link with suspicious Russian interests.
The Russian edition of Forbes magazine was also mentioned in the sending of the letters (as we transmitted yesterday to E.K.), confirming that in the letters it sends to its customers, the Bank of Cyprus informs that their accounts will be closed within two months from the moment who receive the relevant notification because the user details do not meet the regulations of the know your customer (KYC) process.
As clarified, the issue of closing accounts is not only faced by Bank of Cyprus customers, but also by those who are served in Hellenic Bank and Alpha Bank branches.
At the same time, it is pointed out that the accounts of natural and legal persons included in the sanctions, which were announced last week, by the American and British authorities have been frozen.
“Whoever is inside the sanctions, either directly or indirectly, is essentially blocked and has nowhere to get his money,” said a bank source.
The same source explained that no banking institution in Cyprus can risk making a transaction and transferring money to natural and legal persons who are under sanctions because it is targeted and the same risks being imposed on it.
The governor of the Central Bank of Cyprus, Konstantinos Herodotou, had mentioned in the meeting held at the Presidential Palace that in recent years, 43 thousand shell companies have been closed in Cyprus, 123 thousand bank accounts have also been closed and today only 2 of the total deposits, 2% have Russian citizens as final beneficiaries.
Bank Association Assurances
The representative of the Association of Banks, Andreas Kostouris, assured in his statements on Thursday to the state RIK that the banks comply with all the prescribed procedures for the implementation of the sanctions imposed by the United States and Britain and that there was a freezing of the accounts of those who fall under the sanctions. regardless of nationality.
He also noted that “American sanctions have been applied by Cypriot banks for a decade”.
Asked to comment on the information about closing accounts of Russian customers, Mr. Kostouris emphasized that thousands of accounts have been closed in recent years and it is not correct to say that the issue concerns only people of a certain nationality.
He explained that this issue concerns the banks’ policy regarding the assumption of risks and risks.
He also said that banks evaluate specific countries, industries, persons and fields of activity and if the data makes the risk particularly high, then they do not work with them.
The Commission is in communication with member states about sanctions
The Commission is in communication with the member states regarding the implementation of sanctions, pointed out the representative of the European Commission, Ariana Podesta, in response to a question from the Cyprus News Agency (CYPE) on whether there has been information from the Cypriot authorities about actions in which they intend to move forward, following the addition of Cypriot citizens and entities to the US and UK sanctions list.
While answering a question whether the Commission knows whether individuals and companies from Cyprus included in the US-UK sanctions have helped Russian oligarchs to circumvent EU sanctions, Mrs. Podesta reminded that for the EU sanctions are “mainly a tool of foreign policy and security policy” and that the European Commission does not comment on future plans regarding possible sanctions.
The spokeswoman also refrained from answering whether the Commission has been informed by other member states of their intentions regarding the application in their own jurisdictions of the US-UK sanctions for the specific individuals.
In particular, responding to a question as to whether she has been informed by Cyprus or other member states regarding the implementation of the said US and UK sanctions, Ms. Podesta noted that “what I can say is that we are in contact with all states members regarding the implementation of sanctions”.
“We cannot comment on specific contacts” with member states, he added. Asked to clarify whether there was information from other member states besides Cyprus, the representative repeated that the Commission is in contact with all member states in relation to the application of sanctions, but does not comment on the specific contacts that are being made.
Responding to a question as to whether the Commission is aware of whether the specific individuals and entities have helped Russian oligarchs to circumvent EU sanctions, Ms. Podesta pointed out that “as you know, EU sanctions are primarily a tool of foreign policy and EU security policy’.
“Of course you know very well that we do not comment on possible future listings. In any case, EU sanctions are agreed upon by the unanimity of the member states,” he stressed.
As the deputy chief representative of the Commission, Dana Spinad, noted in her turn, the Commission “is in terms of sanctions extremely careful in what it says until we put anything on the table”.
The Bar Association requests a meeting with the President
The Pancypriot Bar Association (PDA) has sent letters requesting meetings with the President of the Republic, to coordinate actions as well as with the British High Commission in the context of UK and US sanctions.
Already, PDS reports, there has been a meeting with the American Embassy as well as with the Ministry of Finance as the competent presiding authority of the Sanctions Implementation Unit of the Republic of Cyprus (MEK), for further coordination.
In a related announcement it is noted that since the EU sanctions against Russia came into force, the PDS has exercised its supervisory role by acting with immediate reflexes and with due rigor and seriousness, with the aim of protecting the local legal community, in extent allowed by its competences and the powers deriving from the legislative framework.
It proceeded, it is added, to timely and continuous information of its members by issuing a relevant Circular with specific guidelines that met strict standards and the recommendations of international organizations on sanctions.
In particular, in the Circular, it is stated that the attention of the supervised is drawn to the need to immediately implement appropriate policies to comply with the restrictive measures, including the implementation of continuous and appropriate checks of lists/lists of sanctions, before taking actions that fall within their duties as providers administrative services or as legal advisors.
Source: Ekirikas