Cyprus Braces For New US and UK Sanctions

The Republic of Cyprus is bracing for another round of sanctions, this time levied by the United States and the United Kingdom. The sanctions are believed to be in connection with the war in Ukraine and will likely be targeted at Russian oligarchs with connections to the government.

Russia’s invasion of Ukraine and the Western response has put Cyprus in an awkward position. The island is sometimes nicknamed the “Moscow on the Med” due to its sizeable community of Russian expatriates, some of whom happen to be very wealthy.

However, as a member of the European Union, Cyprus is expected to conform to the sanctions regime against Russia. Nevertheless, the announcement of a forthcoming sanctions package has reportedly caused some alarm amongst the Cypriot business community, with fears that jobs and livelihoods could be affected.

Cyprus expects a list of sanctions

On Friday, it is expected that both the United States and the United Kingdom will release lists of individuals in Cyprus who will be placed under sanctions for allegedly violating the restrictions that have been imposed on Russia’s access to the international financial system.

Those who will be affected by the sanctions will likely stand accused of aiding Russian oligarchs, individuals, and organizations tied to Putin’s government through the use of intermediaries and their businesses.

The news that further sanctions are expected has reportedly been met with panic in Cyprus. In a bid to avoid financial fallout, over 500 Cypriot companies have contacted the Registrar of Companies and Intellectual Property, seeking the relevant information for them to be able to cut ties with sanctioned entities and individuals.

It is unclear just how much the sanctions will impact businesses and employees in Cyprus. Due to the complex nature of supply chains and business contracts, even those who have not knowingly forged ties with sanctioned individuals and entities are worried that they might be caught in the crossfire.

A pervasive issue

This is not the first time that sanctions have caused a headache for the Cypriot government. Last month, Cyprus received an 800-page document that listed individuals on the island accused of aiding Russian billionaire Alisher Usmanov’s efforts to conceal his wealth.

The dossier was intended to be used as a toolkit by the Cypriot government for the implementation of sanctions and auditing. Indeed, President Nikos Christodoulides said that his country would clamp down harder on individuals associated with Usmanov and Russian oligarchs.

“It’s imperative we approach this issue with the appropriate seriousness and do what we can so as not to allow anyone to blacken the country’s name,” Christodoulides said. “And I am certain that you who represent our economy realize and share the need to finish up with this matter and move into the new era.”

The Cypriot President has explained that Cyprus must take sanctions breaches seriously in order to protect the island nation’s business interests.