An investigation into financial transactions in Cyprus has shed new light on the flow of money from Russian oligarchs, and its handling by or distribution to western institutions and individuals. The operations of opaque offshore structures for the wealthy often seem like matters that are not only abstruse, but also far removed from the lives of most ordinary people. Yet as this work shows, they can be directly related to those involved in immediately familiar realms: current affairs coverage in Germany, Premier League football in the UK and the ownership of Europe’s largest travel company.
Cyprus Confidential centres on a cache of 3.6m files leaked by an anonymous source to the International Consortium of Investigative Journalists (ICIJ) and Germany’s Paper Trail Media, which shared access with the Guardian, the Bureau of Investigative Journalism and other reporting partners. Like previous leaks of records from offshore financial centres, it has exposed the mechanics of a secretive industry that veils the dealings of the super-rich and politically connected. This time, some of Russia’s wealthiest figures are at the heart of the story. The data suggests that service providers in Cyprus helped them transfer hundreds of millions in assets as EU sanctions loomed after Moscow’s full-scale invasion of Ukraine last February. The eight-month investigation is a powerful reminder that transparency and international cooperation are essential to exposing potential wrongdoing and holding financial institutions and governments accountable. But they should not only be the concern of journalists. The same principles should guide the actions of governments, which have too often failed to take on board the lessons of previous investigations.
Among the revelations are that PwC Cyprus, part of the blue-chip accountancy group, helped the tycoon Alexei Mordashov attempt to transfer £1bn in a public company to his life partner on the day he was placed under EU sanctions, raising questions over the timing. Mr Mordashov’s spokesperson says that he and the companies he runs have never breached any laws in any jurisdiction. Chelsea FC faces fresh questions over how its former owner Roman Abramovich funded its success, after leaked files revealed a string of undisclosed payments worth tens of millions of pounds, which may have breached strict football rules, including those on “financial fair play”. An influential journalist and broadcaster, who is considered one of Germany’s top experts on Russia, received at least €600,000 in undisclosed offshore payments from companies linked to an oligarch close to Vladimir Putin. He says that he remains impartial.
Cyprus has now pledged to tighten controls on its financial sector. Its president, Nikos Christodoulides, has said that “no one is above the reputation of our country” and promised to investigate “within a specific timeframe”. He must now follow through on those promises. But Cyprus Confidential has also exposed the role of those employing or benefiting from services in the country, and raised uncomfortable questions for people much closer to home. They should now consider the conduct of their organisations, be accountable where things have gone wrong on their watch, and commit to doing better in future.
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