The finance ministry’s permanent secretary George Pantelis on Wednesday said it was unknown to the ministry whether new expected sanctions information would include named Cypriot nationals.
Information emerged on Tuesday that a new list of natural and legal persons subject to the US and the UK sanctions is expected to be received by state authorities on Friday.
Speaking on CyBC’s morning radio, Pantelis addressed the fallout from the sanctions and the subsequent freezing of accounts by banks in Cyprus.
Head of the Cyprus Bar Association Christos Clerides on Tuesday had said employees working at two sanctioned firms have decried the move by the banks to follow US orders to freeze all accounts affiliated with sanctioned entities.
Clerides told CNA that employees working as secretarial and other staff, including at a winery and restaurant, had been indirectly affected and were unable to be paid their salaries.
He explained that a similar problem arose from the fact that the office’s client base included many companies served by it, which had nothing to do with Russian oligarchs.
Pantelis said on Wednesday that efforts are now underway to legally alter the structure of affected firms to pave the way for the banks to be able to lawfully unfreeze the accounts of those who have suffered collateral damage.
A request to replace company directors and secretaries has been forwarded to the registrar of companies which is said to be awaiting instructions.
Pantelis explained that from a purely legal standpoint the registrar is not in a position to refuse the application, however, the politically sensitive nature of the matter requires caution so as not to be seen to be making any missteps.
Once the management structure is updated, banks will be able to proceed legally by forwarding the new information to directly request permission to release blocked funds from those who issued the sanctions, Pantelis explained.
The banks have meanwhile been informed in writing that there are procedures they can follow to legitimately unfreeze accounts.
Pantelis confirmed that the issue affects roughly 400 companies, some of whom have folded and let go of their employees and added that the fallout on the economy would be felt for the next several years.
Asked how the state could best navigate the political tightrope, Pantelis said the best policy going forward was to be proven to be acting transparently and accepting the changes in management structure as a rightful recourse for companies caught in the crossfire, 99 per cent of whom are “clean.”
The finance ministry is seeking the opinion of the attorney general, while the registrar of companies is currently waiting for the political green light to proceed with replacements.
Cyprus must be seen to be a “state of justice,” Pantelis concluded.
