The government said on Wednesday that police were already investigating most of the cases in the ‘Cyprus Confidential’ report released a day earlier by the International Consortium of Investigative Journalists (ICIJ), which claimed Russian oligarchs and billionaires had been laundering money through Cyprus ahead of the Ukraine invasion.
But the permanent secretary of the finance ministry denied that the accountancy giant PwC Cyprus – a major focus of the report – was part of any investigations.
The government also charged that the ICIJ report provided nothing tangible to demonstrate Cyprus was violating sanctions as the EU had not issued any during the specific period the report was conducted.
The investigation claims to reveal “Cyprus’ pivotal role in shielding the wealth of oligarchs and powering the Putin regime”.
“As the West sought to block funding for Russian President Vladimir Putin’s war machine, financial enablers in Cyprus — including accounting powerhouse PwC — scrambled to keep his allies a step ahead of looming sanctions,” ICIJ says.
It specifically said that leaked documents show staff at PwC Cyprus hurried to restructure companies belonging to Russian oligarchs as the prospect of sanctions loomed.
According to the investigation, that examined over three million documents, PwC helped Alexey Mordashov arrange to transfer his stake in TUI Group to his life partner just as the EU sanctioned him in February 2022 over Russia’s invasion of Ukraine.
Documents relating to the share transfer were still being circulated for sign-off in the first days of March 2022, raising the possibility that PwC Cyprus breached the fresh EU sanctions against Mordashov, it said.
Speaking after a cabinet meeting, Finance Minister Makis Keravnos seemed annoyed by the revelations made in the ICIJ investigation, arguing that it was frustrating that the ICIJ continue to make Cyprus appear as a problematic investment and financial destination.
“This government from March 2023 began an intense process to put in additional safeguards and build institutions, which no longer allow the name of Cyprus to be tarnished in any way,” he said.
In response to a question as to whether the legal framework for monitoring service providers for money laundering issues will be strengthened, Keravnos said that there is close cooperation with the British government, which acts as an advisor.
Experts have come to Cyprus and large sums have been allocated by the British government to help Cyprus, in the first phase £800,000, and another similar fund will follow.
The experts from Britain, he said, are working with officials of the finance ministry and are preparing both the legal basis, the structures and all the measures that must be taken. First deliverables are due by the end of November.
In response to a question as to whether there is a criminal investigation against PwC he did not answer directly. He said that an investigation is being conducted following instructions from the finance ministry on some individual issues. He added that the investigation is ongoing and he could not say anything more.
He said that all relevant issues will be investigated, instructions and timetables have already been given and there will be an examination of the amounts, when and how.
But in statements to the Cyprus News Agency, the permanent secretary of the finance ministry e Panteli categorically denied that there were investigations in to PwC Cyprus.
About the report itself, Panteli said: “We expected to see something more astounding, but it is a republication of various facts that journalists are trying to connect.”
He noted that the reports refer to the period 2014 to 2022, a period in which there were no sanctions at the European level, noting that sanctions began to be imposed from the end of February 2022 onwards.
On the Mordashov case, Panteli said: “Because there are suspicions that the investigation in question concerns PwC Cyprus, I would like to state that any investigation being conducted or conducted has no relation to the company in question.”
Panteli said that investigations are underway into possible violations of European sanctions, but did not want to expand further, “because it is not right or necessary for us to comment on any ongoing investigations”.
“Just because there was this suspicion and doubt, I would like to clarify that this investigation has nothing to do with the PwC (Cyprus) company.”
Commenting to CyBC on Wednesday, government spokesman Konstantinos Letymbiotis said: “The chief of police has given instruction for the cases, already being investigated, and mentioned in the publication, to be completed as soon as possible.”
President Nikos Christodoulides said investigations have begun and will be carried out with a specific timeframe. These will not investigations that will last for years, he added.
He repeated the message that “no one, no one is above the reputation, the credibility of our country”.
The president highlighted he read the reports in the international press, telling reporters “I have to tell you, it is not something that made me feel proud. Neither myself or the government are belittling, nor degrading anything.”
Asked to comment on the €1.4 billion transfer by Mordashov and if it was already being investigated, government spokesman Konstantinos Letymbiotis said that there were issues that were already known to the authorities and were already being investigated.
These cases, he said, are cases that the police chief himself has given instructions to be investigated as priority and dealt with as soon as possible.