Police investigating three law firms for violating EU sanctions

By Andria Kades and Iole Damaskinos

Three law firms have been reported to the police over suspicions they have violated EU sanctions, the Cyprus Bar Association said on Thursday.

A further two reports were filed to police about lawyer’s clients, after lawyers alerted the association over fears their clients may have violated EU sanctions.

The news comes at the heels of a new wave of sanctions expected to hit the island imminently, with government spokesman Konstantinos Letymbiotis confirming authorities are waiting for the developments.

Chairman of the bar association Christos Clerides told the Cyprus Mail they could not share more details. “All information has been given to police.”

Clerides said it is highly likely the reported law firms will be included in the upcoming sanctions package set to be announced by the US and UK.

Meanwhile, Letymbiotis said the government was working to find a solution about the clients of sanctioned individuals who have also seen their bank accounts frozen.

He described them as “collateral damage.”

While banks immediately moved to freeze the accounts of sanctioned individuals last month, they also froze accounts of clients to the sanctioned entities.

This has affected some 400 companies which previously used the now-sanctioned firms for matters including licensed administrative services including trustee, directorship or nominee shareholders.

The move was described as “overcompliance”.

Banks have requested documents from the company registrar showing no connection to sanctioned firms, leading a flurry of companies to turn to the registrar’s office.

In turn, the company registrar has said it cannot do anything until the government advises on the matter.

In the meantime, the bar association is internally assessing another 36 law firms, with suspicions of violating EU sanctions.

Clerides explained that when sanctions were originally imposed last year by the EU and the UN, a circular had been sent out to all members requesting information on whether they offered services to any Russians on the list.

Thirty-six firms responded they had such clients and subsequently a second questionnaire was sent asking whether they had served their clients while the sanctions were in force.

The deadline to respond ended on Wednesday and a three-member committee of experts will study the responses and conduct on-site investigations as needed.

The Christodoulos G. Vassiliadis & Co. D.E.P.E. Office is also included among the 36 law firms. Vassiliadis was sanctioned both by the US and UK last month.

Clerides clarified that the investigation into these 36 law firms is not being done because they are all included in the sanctions, but because they previously had clients who were later sanctioned. The investigation of these firms is expected to be completed in about a month.