Aljazeera Releases more Cyprus Papers Details
More than 1,000 Russians obtained a Cypriot passport through Cyprus’s citizenship-by-investment scheme, Al Jazeera can reveal after an investigation of more than 1,400 leaked documents.
The Cyprus Papers consist of 1,471 applications, containing the names of 2,544 people who received a Cypriot passport between late 2017 and late 2019.
The documents obtained by Al Jazeera’s Investigative Unit showed that almost half of the applications came from Russia, showing how the country’s political and business elite, billionaires and criminals have been buying their place in the EU, granting them the ability to travel, work and bank in the whole of the EU.
Most of what the $2.5m applicants need to invest to qualify for citizenship is put into real estate.
Upon arrival at Larnaca International Airport, signs in Russian offering investment opportunities, luxury properties and adverts for the many agents wanting to handle the citizenship application, show just how important Russia has become to the scheme.
‘They do not trust their own Russian state’
Many Russians who applied for Cypriot citizenship made their money through political and economic relationships with their own government, with several having held official state positions making them PEPs – politically exposed people.
Among those that acquired passports are former Deputy Minister Igor Reva and former member of the Russian parliament Vadim Moshkovich. The list also includes the former boss of a subsidiary of the state-owned railways, Vitaly Evdokimenko, and Vladimir Khristenko, who comes from a highly politically connected family, with his stepmother serving as the current deputy prime minister of Russia.
The reason these politically connected people look towards Cyprus, and by extension, the EU, is because they fear their possessions might be at risk in their home country, Nigel Gould-Davies, a Russia expert at the United Kingdom’s International Institute for Strategic Affairs, told Al Jazeera.
“They do not trust their own Russian state to leave them or their assets alone,” Gould-Davies said.
“They are looking for a place with the rule of law absent in their own country and that also will not scrutinise their applications too closely, make it easy for them to send their money and grant them citizenship.”
Since 2014, the United States and the EU have imposed sanctions on Russia, in response to the Russian annexation of Crimea, cyber-attacks, corruption and human rights abuses.
“A good example of that would be the Salisbury nerve agent attack in the UK in March 2018. The UK and US began to impose new sanctions and immediately we’ve got a big spike of capital flight out of Russia, looking for safe places,” he added.
In 2014, VTB – often called “the Kremlin’s bank” – and its subsidiaries were among several big Russian banks sanctioned by the US and the EU after the Crimea invasion.
More than a dozen of their relatives are now Cypriot citizens, able to move money around the world with less chance of being flagged as “high risk” because they are now able to use their EU citizenship.
Following Al Jazeera’s revelations, there have been calls for a change in the citizenship-by-investment programme employed by Cyprus and other European Union member states.
In a letter to the European Justice Commissioner, Member of the European Parliament Sophie in ‘t Veld said it is “high time that the Commission gears up towards more decisive action on this front”.
“Clearly, the situation is becoming untenable and inexplicable to EU citizens who fight for equality and against corruption,” in ‘t Veld’s letter said.
“A more ambitious EU policy and regulatory framework is thus urgently needed.”
These shady golden passport schemes must end. National governments are selling what is not theirs to sell: EU citizenship. EU countries rolling out the red carpet for dodgy money and giving criminals a golden ticket into the EU. https://t.co/wtbXn4nbex
— Sophie in 't Veld (@SophieintVeld) August 25, 2020
Flailing Cypriot economy
In response to so much money moving outside its borders, Russia has tried to reverse the financial flow, demanding a new treaty to increase the tax paid on money moved into Cypriot banks.
“Putin has increasingly put pressure on some of the most senior business figures to stop sending their money abroad and invest in Russia instead,” Gould-Davies told Al Jazeera.
One group of once-well connected and still wealthy businessmen have already fallen foul of Putin. Most are accused of financial crimes but their Cypriot passports have helped them stay out of Russia’s reach.
Former Gazprom executive Nikolay Gornovskiy is one of them. Gornovskiy is wanted by Russia for abuse of power, but the UK has so far refused to extradite him.
Finally, brothers Alexey and Dmitry Ananiev were charged with embezzlement from the bank they founded.
Dmitry lives in Cyprus, his brother in London.
Our investigation of the #CyprusPapers has found at least 40 high-level officials and their families paid to become citizens of Cyprus.
Even if they’ve done nothing wrong, their roles make them a high risk for corruption. pic.twitter.com/PdbziufXa5
— Al Jazeera Investigations (@AJIunit) August 24, 2020
Since its inception in 2013, the EU has regularly criticised the citizenship-by-investment scheme, claiming Cyprus could possibly serve as a back door into the rest of the EU.
“Criminals are endangering Europe’s security or want to engage in money-laundering here,” said Vera Jourova, a vice president of the European Commission in 2018. “We do not want Trojan horses in the Union.”