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BoC: no UK accounts closed over money laundering

By George Psyllides

The Bank of Cyprus (BoC) said on Thursday that no accounts have been closed in Britain over money laundering concerns, as it had been alleged by the island’s central banker and a leading opposition MP.

In line with policy and regulator directives, BoC UK carried out a periodic check of customer accounts, including politically exposed persons (PEPs), independent of nationality, in a bid to update them, the lender said in a written statement.

The check found a number of accounts — belonging to Cypriot and foreign nationals – whose details needed updating.

“Among these accounts, were some, which were either inactive for a long time, or had a very low credit balance,” BoC said.

The bank said the accounts were being updated.

One of the options that was being considered was closing them, it said, adding that in those cases, the owners had been notified.

One such account belongs to DIKO leader Nicolas Papadopoulos and had been opened when he was a studying in London between 1993 and 1998.

Papadopoulos, who issued a statement on Thursday, said the account remained inactive ever since and the balance was 78 pound sterling.

“The Group wishes to make it clear that, based on information from BoC UK, none of the accounts in question have been closed on suspicion of money laundering.”

The procedure was fully in line with the practices implemented by commercial banks in the UK in recent days, BoC said.

The lender said any “public discussion on the basis of unconfirmed information did nothing to help the efforts to restore confidence in the Cypriot banking system.”

On Tuesday, CBC Governor Panicos Demetriades told lawmakers that the accounts, mostly belonging to unnamed Cypriots, had been shut down as part of anti-money laundering checks on politically exposed persons (PEPs) who were considered high risk customers.

He was responding to a question put by main opposition AKEL MP Irene Charalambidou.

The issue came up before the noise over a damning internal report concerning Demetriades had settled.

An investigation, conducted by the CBC’s audit committee, found that the governor had misled the board, ignored its decisions, concealed information, violated procedures, including the awarding of contracts without tenders, and tampered with agreements.

Demetriades responded to the damning findings focusing on the technicalities rather than the substance.

He said the committee had exceeded its powers because it did not have the approval of the board for the investigation and had not informed the governor.

He described the investigation as “illegal” and complained that he had not been asked for his views, something that led to “arbitrary and mistaken observations.”

 



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