Filenews 13 May 2023 - by Fanis Makrides
The opinion of the Legal Service regarding the handling of 400 business entities, which are dormant in the Department of the Registrar of Companies, is ready.
"F" reports that the content of the opinion has been complete since the day before yesterday and instructions have already been given in order to forward it to the Ministry of Finance, which will forward it to the Department of the Registrar of Companies. In essence, this means that from the beginning of the week we will have developments to further handle the issue.
We remind you that these companies that have been frozen are directly or indirectly related to service providers included in the restrictive measures lists of the UK and OFAC (Office of Foreign Assets Control), the competent agency of the US Treasury.
The affected parties are interconnected, in particular, with the financial services company MeritServus and the law firm CHRISTODOULOS G. VASSILIADES & Co. LLC, which served a large number of companies. The two entities were included in U.S.-British restrictions for allegedly providing services to Russian oligarchs Roman Abramovich and Alisher Usmanov, respectively, who are believed by the West to support the Kremlin and Russia's invasion of Ukraine.
Most of these 400 companies that have been frozen received services from these two well-known administrative offices. Thus, after the sanctions of April 12, they submitted requests for changes to the Department of the Registrar of Companies (changes in the administrative structure, etc.) in order to terminate their relationship with MeritServus and the law firm CHRISTODOULOS G. VASSILIADES & Co. LLC.
However, the Department of the Registrar of Companies, due to the fact that there is no legal framework providing that sanctions from the US and Britain are being dealt with, did not meet these requests. The Registrar of Companies, Irene Mylona-Chrysostomou, contacted the Ministry of Finance to clarify the issue through the Legal Service.
"F" sources believe that what is recorded in the opinion concerns the legal framework in force and the obligation of the Republic to comply only with decisions on sanctions coming from the United Nations and the European Union. If this is verified, then it means that the ball is back in the hands of the Department of the Registrar of Companies.
Based on the data, it is likely that the Department of the Registrar of Companies will contact the ministries involved from Monday. This is in order to act in a way that will not affect government policy in relation to US-British sanctions.
The whole issue of the 400 frozen companies has bigger dimensions. As we noted last Thursday, Cypriot banks have frozen the accounts of legitimate investors, simply because they were receiving services from the two major offices in Limassol and Nicosia, respectively. In order to unblock investors' bank accounts, commercial banks ask them for documents from the Registrar of Companies, confirming that they have ceased their cooperation and relationship with Meritservus and the office of the well-known lawyer, Christodoulos Vassiliadis. However, the requests of legitimate investors for changes in the structure of their companies are not met by the Registrar. As a result, their bank accounts remain trapped, unable to carry out financial operations.
They are exploring connections...
There is no official reaction from the government side to the press reports that were broadcast this week (see "Politis" report) and want a team of American investigators to be in Cyprus. The latter are reportedly investigating connections of law firms and audit firms related to circumvention of Western sanctions through Cyprus and Switzerland. Under the microscope are even links to Russian President Vladimir Putin himself. Bankers in Switzerland have already been charged since last March in an identical case. A government source who spoke to "F" ruled out the possibility that the investigation has anything to do with U.S. law enforcement. As we have been told, there is no request for assistance from the US law enforcement authorities. He added that neither the Ministry of Justice, the Police, nor the Legal Service had knowledge of this. Ignorance is also declared by the ministries of foreign affairs and finance. It was unclear whether the investigators had any connection to U.S. Treasury departments.
And a second dossier from the USA
Yesterday, a second file was sent by the US to the Cypriot government in relation to the sanctions imposed by OFAC. "F" reports that this is a long explanatory note from the Americans. It records how Alisher Usmanov was connected with natural and legal persons from Cyprus. This note is, in essence, an explanation of the voluminous 800-page witness material that the Americans have already sent to Nicosia. A source told F earlier this week that the documents "justify why they imposed sanctions and list the web of companies and their officials who led them to the known decisions."
