Newsroom / CNA
The Pancyprian Bar Association has expressed growing concerns over the violation of fundamental rights of both individuals and legal entities affected by the recent restrictive measures and sanctions imposed on April 12, 2023.
In a statement issued on Thursday, the Pancyprian Bar Association revealed that it has uncovered instances where bank accounts held by Cypriot business entities, owned by legitimate and law-abiding investors, have been frozen and blocked. Notably, these actions were taken in strict adherence to the Anti-Money Laundering (AML) compliance framework. The frozen accounts were associated with administrative services provided by professional firms not included in the sanctions, nor having any business relationship with Russian oligarchs, commonly referred to as "Legitimate Client Companies."
It is important to note that the banks voluntarily decided to comply with the restrictive measures and sanctions imposed by the United States and the United Kingdom on April 12, 2023.
Disagreeing with the banks' decisions, the Pancyprian Bar Association asserted that the freezing and blocking of bank accounts lacked any factual or legal basis. These affected companies are neither listed in any organization's or state's sanctions nor owned or controlled by sanctioned individuals.
The association emphasized that the affected companies had provided all the necessary legal documentation to prove the termination of their professional relationship with the mentioned firms. Under the Companies Act, Cap. 113, changes made to replace these firms are considered legally valid if properly recorded in the relevant registers maintained at the companies' registered office. The association further highlighted that the freeze on accounts has resulted in severe operational disruptions, hindering the ability of legitimate client companies to carry out their activities and meet payroll obligations.
Urgent action is needed to prevent the collapse of a crucial sector of the Cypriot economy, warns the Pancyprian Bar Association.
Reiterating their concerns, the association called on the relevant authorities to address the consequences of these measures promptly.
According to the association, the injustice must be rectified immediately as legitimate investors engaged in lawful activities are being unjustifiably penalized and victimized solely for receiving legitimate administrative services from specific service providers. Moreover, the association raised concerns about the unwarranted and unfair association of these companies with the imposed sanctions, as it practically produces similar effects as if the companies themselves were included in the sanctions.
The association also urged the Registrar of Companies to fulfill its legal obligations by promptly processing the registration and recording of changes submitted by these companies, as required by law and relevant legislation.
The current situation presents a crisis for the country and its service sector. The Pancyprian Bar Association called for heightened vigilance from all stakeholders, comprehensive data evaluation, and the implementation of suitable compensatory measures to effectively manage the destabilizing factors impacting the professional services sector. By taking decisive action, the association aims to safeguard the sector and contribute to the overall protection of the domestic economy.
Authorities have yet to respond to the concerns raised by the Pancyprian Bar Association.
