The Cypriot government has instructed the island's banking sector to stop all operations with the ruble.
This is part of an investigation into Russians circumventing international sanctions with the involvement of Cypriot companies.
Source. This was reported by the Cypriot newspaper Politis.
According to the newspaper, the authorities are investigating cases of abuse by local law and accounting firms of the fast-track business registration procedure, which allows Russians to obtain residence permits, work permits and tax benefits on an expedited basis.
As a "preventive measure," the government has instructed local banks to stop all transactions in Russian currency.
This will not affect Russian businesses and individuals, experts say. As a former auditor of one of the Big Four companies explained, "no one has been conducting any significant transactions with the ruble with Cypriot banks for a long time, and it is unclear who will be affected."
"Perhaps it could affect those who, for example, would exchange cash for euros, but in terms of volumes, these should be very small amounts," he said.
The investigation is supported by the United States. Washington will send 24 U.S. law enforcement officers, including the FBI and the U.S. Treasury Department's Financial Crimes Enforcement Network, to Cyprus to assist Cypriot authorities in 29 cases related to sanctions against Russia.
The United States imposed sanctions on 18 Cypriot companies, and the United Kingdom on two, for attempts to circumvent Western sanctions and support for the war in Ukraine.
Subsequently, the International Consortium for Investigative Journalism (ICIJ) released a report titled Cyprus Confidential, which reported on corruption and violations of international sanctions in Cyprus. The investigation, among other things, concerned investments by Russian entrepreneurs on the island and the issuance of "golden" passports.
In an effort to whitewash the island's reputation as a business and financial center, the Cypriot authorities have created a unit to monitor compliance with international sanctions.
The government has already demanded that local banks comply with anti-Russian sanctions. Previously, it was about closing accounts. The Governor of the Central Bank of Cyprus previously stated that all banks on the island "have started freezing bank accounts of sanctioned persons."