After a big build-up, the first Cyprus Confidential reports were released on Tuesday evening and more followed on Wednesday. The reports were based on the so-called Cyprus Confidential files that are made up of some 3.6 million leaked documents that include, among other things, emails, compliance reports, company filings and banking records. These originate from six Cyprus service providers that had Russian oligarchs as their clients.
The International Consortium of Investigative Journalists (ICIJ), Organised Crime and Corruption Reporting Project (OCCRP) and Paper Trail Media shared the leaked documents with some 68 news organisations and 270 journalists worked on them. The results were detailed accounts of transfers of large amounts of money and transactions of companies in secret jurisdictions arranged by the service providers in Cyprus, with suggestions that some of these had taken place after sanctions were imposed against Russian oligarchs by the EU on February 28, 2022.
The stories are very well-researched, and the journalists go into great detail as they follow the money but are also careful not to report as fact what cannot be proved. In the case of sale of TUI shares by oligarch Alexei Mordashov to his life partner, arranged by PWC on the day he was placed on the EU sanctions list, the report said sanctions may have been violated, because it was unclear at what time these had been put into force. A similar line was taken regarding Petr Aven, another Vladimir Putin ally, whose Cyprus-based service provider, Abacus, had arranged the transfer of $5 million on the day he was placed on the EU sanctions list.
Although the line of the finance ministry was that the reports contained little that was new – “a republication of various facts that journalists are trying to connect,” said the permanent secretary – there was another aspect to Cyprus Confidential. It showed the world how Cyprus has been used by Russian oligarchs. The ICIJ found that Cyprus professional services were working on behalf of 71 Russians who came under sanctions since February 2022. It also reported that “among the 104 Russian billionaires Forbes magazine identified in 2023, two-thirds — a total of 67 individuals — also appear in Cyprus Confidential documents, along with their family members, as clients of the island’s professional services providers.”
While having such fabulously wealthy people using Cyprus service providers was very lucrative for the services sector and good for the economy, it was not beneficial to the rebuilding of the country’s reputation, which had been tarnished by the golden passports and the earlier accusations of money laundering. While the state has been working on putting its house in order, since the change of government in March, Cyprus Confidential has dealt a big blow to these efforts, which commenced after the period (2014-22) under investigation by the ICIJ.
The truth is that the Christodoulides government has fully cooperated when sanctions were imposed in April and has sought help to from the UK government to tighten the legal framework in which professional service providers operate. Unfortunately, the only thing we will be hearing about now is that Cyprus helped Putin allies “in shielding their wealth.”