The largest bank in Cyprus - Bank Of Cyprus - began to send messages to customers - citizens of Russia that their accounts will be closed. Forbes writes about this with reference to the company Main Partner Trust, which provides comprehensive services to clients in Cyprus. This information was also confirmed to the publication by a source in the banking sector.
In letters to customers, the bank informs them that their accounts will be closed within two months of receiving the notification, as the user's data does not comply with the rules of the "know your customer" procedure.
As Main Partner Trust explains, one of the reasons for the bank's actions towards Russian clients may be the tax resident status of Russia. Also, the reason for closing the account can be the presence of income from a business that is under sanctions in Russia (for example, dividends or salaries for employees of sanctioned companies working remotely), as well as "atypical" residence permit ("visitor" visa) or stay in Cyprus on a digital nomad visa.
The publication's source in the banking market says that Bank Of Cyprus has closed accounts of Russians before. Moreover, even old accounts of clients who have been living in Cyprus for a long time fell under this procedure.
Problems with closing accounts arose not only among Bank Of Cyprus customers, but also among those served by Greek Hellenic Bank and Alpha Bank units, Forbes writes.
The decision to close the accounts of Russians at Main Trust Partner is associated with the fear of British and American sanctions. They prohibit the provision of consulting, marketing, IT, legal, engineering services to companies and individuals from Russia. The restrictions on the Cypriot bank are related to the recent expansion of blocking US sanctions for helping to circumvent previous sanctions. Bank Of Cyprus spends significant resources to comply with all restrictions. In such a situation, it is easier for the bank to close the accounts of Russians than to receive a fine or other problems, according to Forbes lawyers interviewed.
Bank Of Cyprus is considered the largest in Cyprus. According to the results of last year, Russians (excluding Cypriot companies owned by Russian citizens) kept more than seven hundred thousand euros in bank deposits. This is six percent more than a year before. About 15% of all Russians living in Cyprus may have accounts in Bank Of Cyprus.
'
Currently, the bank does not conduct operations in Russia and Ukraine, according to the credit organization's report. He sold his Russian daughter - Uniastrum Bank - in 2015.
The U.S. Treasury Department has an Office of Foreign Assets Control (OFAC) that oversees sanctions enforcement. It also maintains an SDN sheet. Getting into it for the bank means freezing assets in the US and banning settlements in dollars with any American counterparties. It is also prohibited to buy foreign shares and currency through the brokers of these banks.
In 2022, the US Department of Justice created the KleptoCapture group, which monitors compliance with sanctions imposed in response to Russia's invasion of Ukraine.