Russians have found a new way to launder money - through northern Cyprus

Due to the war in Ukraine and the imposition of sanctions against Russia by Western countries, Russians have started looking for new ways to launder their money. The buffer zone in the unrecognized Turkish Republic of Northern Cyprus (TRNC) has become such a place.

Source. This was reported by The Guardian.

The publication participated in an 8-month investigation of "Secret Cyprus" organized by the International Consortium of Investigative Journalists. In particular, it turned out that firms in the Republic of Cyprus continued to work with 25 Russians who were subject to Western and Ukrainian sanctions after the annexation of Crimea in 2014.

Another 71 clients were sanctioned after Russia's invasion of Ukraine, but Cypriot firms not only continued to provide services to them, but also helped to hide their assets from being blocked by the authorities of Western countries.

Now, Cypriot lawyers and financial experts are teaching their colleagues in the northern part of the island how to serve Russians and transferring their assets there, The Guardian reports.

Turkish Cypriots create "completely anonymous trusts, it's a great way to hide assets, no one asks any questions, that's the beauty of it for money launderers," local economist Martkan Hamit explained to the newspaper:

"The ultimate goal is not to stay in Cyprus. The goal is to sell the assets, clean up the money and transfer it to London, Dubai, Manhattan," he said.

"You constantly hear about Russians coming from the south with suitcases of money," said Caner Elgil, head of the Turkish Cypriot teachers' union.

The only country that recognizes the TRNC, Turkey, maintains good relations with Russia. That is why Northern Cyprus, following Turkey's example, does not impose sanctions on Moscow, explains Professor Mustafa Besim, Dean of the Faculty of Business and Economics at the Eastern Mediterranean University:

"Russians can easily open an account and deposit money in any of the 22 local banks."

The number of people arriving at the local airport has increased dramatically since the start of the war in Ukraine. This year alone, according to official figures, more than 39,000 Russians have settled in the TRNC. Those who entered from the south between January and September totaled 58,788, according to the local Ministry of Tourism; the total number of arrivals this year will be seven times higher than three years ago.

"Northern Cyprus is not subject to international agreements, it has weak political institutions, and it is recognized only by Turkey," says political analyst Sertac Sonan. He calls the construction boom provoked by the Russians a "money printing business."

"It's a gray area ideal for someone who wants to do business in the shadows," he said.

Although local laws prohibit foreigners from owning more than three properties, it is possible to buy as many apartments and villas as you want through trusts.

"Foreign investors, led by Russians, are buying literally dozens of properties at a time," says economist Hamit.

Sources in government agencies told The Guardian that they are turning a blind eye to what is happening because there is a lot of money to be made in building permits, bribes, and property transfer taxes.

Background. As a reminder, German journalist and writer Hubert Seipel, who is the author of a documentary and two bestselling books about Putin, received hundreds of thousands of euros from Cypriot offshore companies linked to Russian oligarch Alexei Mordashov.