Cypriot banks dump Russian client accounts

Russian nationals in the Republic of Cyprus are facing bank account closures as the island’s financial institutions are choosing to axe client accounts to avoid sanction violation risks, but some fear an indiscriminate sweep may affect innocent customers.

According to a post on Telegram by a service provider in Limassol, Russian customers who have accounts with the Bank of Cyprus were being told by their financial institution that their accounts would be closed down, including old accounts of clients who have been living on the island for a long time.

A story published on Forbes Russia, cited in the Telegram post by Main Partner Trust, pointed to new restrictions by Cyprus’ largest bank as being tied to a recent expansion of US and UK sanctions against what Washington and London view as Russian enablers.

Cypriot President Nicos Christodoulides vowed to cooperate with US and UK authorities on new sanctions against individuals and entities on the island, citing mutual benefits to the foreign partners as well as the “Big Four” financial institutions on the island.

According to Monday’s article, the Bank of Cyprus -which does not currently conduct operations in Russia and Ukraine- was joined by other banks including Hellenic Bank and Alpha Bank.

Thousands of closure notices have been sent to Russian customers who did not appear to have been suspected of illegal activities banned under sanctions but were also non-permanent residents and did not have an EU passport.

But one client, according to the Forbes article, wrote in a Russian-language Cyprus chat application that she had been using her Bank of Cyprus account only to pay her utility bills.

“There were no big movements on the account, but she still received a notification about its closure,” the article said.

Last year Ukrainian President Volodymyr Zelensky urged Cypriot lawmakers to get tough on Russians “without exception” and only ease up on dual citizens if they condemned Moscow.

Zelensky’s Cypriot counterpart, who was elected earlier this year, said Nicosia was in touch with Washington and seeking specific information on an expanded list of sanctioned Cypriot individuals and entities.

“There is clear political will on the part of the government so that there is no shadow of a doubt,” Christodoulides said on Tuesday.