Post Cyprus Confidential: EU Lawmakers Debate over Sanctions Evasion Penalties

November 27, 2023

Lawmakers in the European Union have raised concerns about Cyprus’ ineffective implementation of sanctions against Russia and urged to strengthen the anti-money laundering regulations following the findings from the Cyprus Confidential investigation.

At a European Parliament session in Strasbourg, France, the officials talked about the need to accelerate ongoing negotiations to enhance the coordination of criminal penalties for sanction evasion across the European Union.

The parliamentary meeting was prompted by the latest investigation by the International Consortium of Investigative Journalists along with Paper Trail Media and 67 other media outlets that revealed the involvement of Cyprus in facilitating the flow of Russian wealth into Western countries.

Based on an extensive inspection of 3.6 million leaked documents, the investigation disclosed how Cyprus firms assisted Russian elites including President Vladimir Putin’s close ones in securing and concealing their assets throughout the Ukraine-Russia conflicts in 2014 and 2022.

Highlights from Talks by the EU lawmakers

During the parliamentary session, the officials shed light on the investigation findings and possible measures to address loopholes. While negotiating the matter, Dubravka Šuica, the EU Commission’s vice-president in charge of democracy and demography, reportedly remarked that the commission takes any, “allegation of breaches of European sanctions very seriously”.

Sucia said, “A year and a half after the beginning of Russia’s war of aggression against Ukraine, it is essential for us to stay vigilant about any violation or circumvention attempts that could weaken the intended impact of our sanctions.”

She also highlighted that EU officials are closely monitoring the response of Cypriot authorities to disclosures in Cyprus Confidential.

Right after the investigation was revealed, Nikos Christodoulides, Cyprus’ President reportedly affirmed that his government would inquire about the findings of the investigation, collaborating with financial group specialists from a confidential, “third country”. He mentioned that “Our aim is exactly so that there are neither insinuations or any shadows cast over our country’s name,”

As per media reports, Cyprus is currently working to establish an independent body to combat financial crimes and sanction evasions, with proposed legislation ready for review and approval by the parliament.

Transparency International Directs Cyrpus to Tackle Financial Corruption

Advocates from Transparency International, an international organization to combat corruption, have called upon Cypriot authorities to adopt effective measures to eliminate unethical practices from the nation’s financial sector.

Maíra Martini, an expert in corrupt money flows at Transparency International, said in a statement, “Decisive action against enablers in the non-financial sector is long overdue in Cyprus and beyond,”. She also mentioned, “These enablers cater to the super-wealthy from around the world, with no questions asked.”

Actions taken by Sweden Authorities

In response to the revelations by the Cyprus Confidential, Sweden authorities are taking active measures. As per media reports, A Stockholm court recently froze the assets of Bengt Ågerup, the billionaire known for inventing Restylane, after the analysis revealed that he transferred a significant volume of money to Cyprus while allegedly having nearly $150 million in unpaid taxes. However, Ågerup denied involvement in any wrongdoing.

About the Cyprus Confidential Investigation

The Cyprus Confidential Investigation led by ICIJ, International Consortium Investigative Journalists, Paper Trail Media, and 67 other media partners, revealed that Cyprus facilitated the flow of illicit money for leaders like Russian President Vladimir Putin and other dictators, and other anti-democratic figures. The investigation based on 3.6 million leaked documents, highlights how Cyrpus firms assisted Russian oligarchs to move their funds from Russia to Europe.