Sanctions evaders ‘may be difficult to convict’

The attorney general (AG) dampened hopes for criminal convictions over sanctions evasion on Wednesday, after he told deputies those may be difficult to achieve but pledged there would be thorough investigation over the allegations which came to light through the ‘Cyprus Confidential’ publications last week.

In a high-level session at the House legal affairs committee, AG Giorgos Savvides said the legal service has a double-digit figure of complaints over evading sanctions against Russia.

Meanwhile, Central Bank governor Constantinos Herodotou told MPs that in the past five years the banking sector terminated its relationships with 42,728 shell companies, closing 125,782 accounts.

He added that in the past five years, staff to investigate cases of sanctions violations and combat money laundering had increased by 50 per cent, while €10 million in fines had been imposed in 13 cases which were investigated.

Savvides stressed there was not a shadow of doubt that with the international spotlight on Cyprus, everything that came to light in the ‘Cyprus Confidential’ reports would be investigated.

He specified it is particularly important for the country to show the word it complies, so as to send foreign investors a clear message that there is a legal framework in place and anyone that seeks to escape it can face sanctions.

Savvides explained that with the double-digit number of complaints – he did not specify the exact number – a special team has been set up within the police to investigate these reports. He underscored the complaints of alleged sanctions evasion came from both within Cyprus and outside.

The AG told deputies Cyprus is a country that criminalised evading sanctions in 2016, and this allows authorities to move forward with investigations. Nonetheless, he said it would be difficult to ensure criminal convictions over the matter, though he specified some cases may have enough elements in them to be taken to court.

At the same time, Justice Minister Anna Procopiou said the police team investigating the matter had grown over the summer, and another four people would be joining them, while she pledged Cyprus’ name would be cleared.

The minister said the recent reports contained nothing new but were cases police had already been investigating.

Chairman of the bar association Michalis Vorkas told deputies it was unfair to target the entire profession of lawyers, specifying that in 2022 there were 177 checks carried out on its members, 17 of which dealt with citizenships.

In 2023, there were 62 checks, which resulted in a number of convictions – though Vorkas did not specify how many – and led to €400,000 in fines.

Representing the accountants’ association, Kyriakos Iordanou told the committee that the licences of three offices and one individual on the UK sanctions list have been suspended. He said the association had submitted to the police 10 cases for further investigation, and noted that through the work it had done before ‘Cyprus Confidential’ was published, it had referred to the authorities those it felt needed to be checked.

In 2022 the association carried out 150 audits, and in the first nine months of 2023 it carried out 113 audits.

Savvides told deputies that after the latest news reports, a meeting was held at the presidential palace which he attended, and then another one at his office to coordinate actions, while a third meeting is scheduled for December 1.

Police chief Stelios Papatheodorou backed what Procopiou and the AG had said, that some banking institutions have already frozen accounts of people under investigation by the police.

‘Cyprus Confidential’ was published after an eight-month investigation by the International Consortium of Investigative Journalists (ICIJ) and the Organised Crime and Corruption Reporting Project (OCCRP), following a data leak. Over 270 journalists and 55 media partners collaborated for the project, that sought to shed light on Cyprus’ ties to Russian wealth.

The AG and government have come under fire for apparent delays in investigating sanction evasion allegations, while the state has maintained it will clear its international reputation, following a slew of sanctions it was hit with from the US and UK targeting ‘financial fixers’.