Russian Companies Flee Cyprus En Masse

They are afraid of the visit of US FBI agents.

Russian companies are leaving Cyprus en masse, once the most popular offshore jurisdiction, after the island’s authorities began an investigation into violations of sanctions against the Russian Federation, and the US FBI became interested in the activities of Russian oligarchs in Cyprus, notes The Moscow Times.

On Thursday, December 14, TCS Group Holding, the parent company of Tinkoff Bank, whose controlling stake was acquired by billionaire Vladimir Potanin after the outbreak of the war, announced plans to leave Cyprus. From Cyprus, where TCS Group has been registered since 2006, the company plans to move to one of the “Russian offshores” created on the Oktyabrsky islands in Kaliningrad and Russky in Primorye. The decision will be made at an extraordinary meeting of shareholders on January 8.

On Friday, December 15, the decision to move from Cyprus to Russia must be made by the shareholders of Etalon Group, one of the largest development companies in Russia, building almost 3 million square meters. meters of housing. Etalon, whose main shareholder is AFK Sistema owned by billionaire Vladimir Yevtushenkov, also intends to register in the “Russian offshore”.

Since the beginning of 2023, at least ten of the largest Russian companies have decided to leave Cyprus, which has long been the main offshore “piggy bank” of Russian business money and where, before the war, Russian residents held $162 billion in direct investments - an amount 5 times higher than Cypriot GDP.

In November, discount retailer Fix Price and United Medical Group, owner of the EMC clinic chain, decided to move from Cyprus to Kazakhstan; in August, Transmashholding (the largest manufacturer of rolling stock for railways in the Russian Federation), Globaltrans (one of the largest private railway operators) and the online retailer Ozon decided to say goodbye to the island.

At the end of summer, software developer Noventiq Holdings, EuroMedCenter, MD Medical Group Investments (manages the Mother and Child clinic chain) announced plans to leave Cyprus.

In March 2023, the Sbermarket grocery delivery service was re-registered by a Cyprus legal entity in a special administrative region (SAR) on Oktyabrsky Island in the Kaliningrad Region.

A new winter wave of flights from Cyprus took place against the backdrop of a visit to the island by agents of the US Federal Bureau of Investigation. According to The Guardian, together with officials from the financial crimes department of the US Treasury, they intend to help local authorities figure out ways for Russians to evade sanctions.

Cypriot authorities began investigating Russia's presence on the island in the spring, opening a total of 29 cases after the US and UK imposed sanctions in April against 13 firms and individuals found to be hiding the oligarchs' assets. Among them were Roman Abramovich and Alisher Usmanov.

The fight against sanctions evasion is an opportunity for Cyprus to strengthen its reputation as a “trustworthy business and financial centre,” the country's new president, Nikos Christodoulides, said in June. Unlike his predecessor, under whom operations to attract Russian billions and hide them flourished, Christodoulides proclaimed a policy of “zero tolerance” towards any Cypriot citizen or company that helps circumvent anti-Russian sanctions.

By supporting restrictive measures against Russia, Cyprus stood “on the right side of history,” the president believes.