Fileleftheros: Cyprus banks will close the accounts of 4,000 Russians

ATHENS, April 20 – RIA Novosti. The newspaper writes that Cypriot banks will close the accounts of 4,000 Russian customers who do not permanently reside on the island within two months, this is not due to sanctions, but to measures to improve the reputation of the Cypriot banking sector “Filelefteros“.

“A source with in-depth knowledge of banking policy in the banking industry said this development was ‘completely unrelated to sanctions’. He also noted that these measures should not come as a surprise. He referred to Cyprus’ organized efforts in recent years to improve the reputation of the Cypriot banking sector,” writes newspaper.

According to the official data obtained by the newspaper, banks have taken drastic measures in recent years.

“According to statistics, 85,000 accounts of 40,000 people were closed in Cypriot banks between 2014 and 2020. As a direct result of this measure, there was a loss of 70 million euros on the balance sheets of Cypriot banks. 1,700 clients providing professional services were foreign investors (prospers), terminated cooperation with 800 banks. The rest were judged either to be linked to businessmen who had been sanctioned, or to some accounts of suspicious activity, commenting on the situation was made by an expert who knew the data well,” writes the newspaper.

It was noted that since 2014, Cypriot banks have fully complied with the sanctions imposed by the competent authority of the US Department of the Treasury (OFAC).

“Only the restrictions imposed by the UN Security Council and the EU are binding on the Republic of Cyprus, but it is mandatory for banks due to the international supervision mechanism for financial institutions trading in dollars. The relevant person and legal sanctions are applied. This also applies to sanctions.

Regarding the US and UK sanctions against Cypriot service providers for Russians, the head of the All Cyprus Bar Association, Christos Klerides, said that the closing of accounts is strictly regulated by an individual agreement with customers’ banks.

The lawyer said, “There are two aspects. One of them is not closing the accounts concerning the legal persons or persons included in the sanctioned persons list, but freezing them.”

According to him, the agreement usually includes a condition that the bank reserves the right to freeze accounts if there are specific grounds for doing so. “If there is no such provision in the individual contract between the client and the banker, and the bank does so, there is likely to be a contractual breach of mutual obligations and could be the subject of a criminal offense of wrongful holding of assets, otherwise refusing to return the money to him at the client’s request,” he added. .

Regarding the closing of accounts, Cleridis said, “Again, there is a provision in the contract between the customer and the banker that gives the banks the right to close these accounts on the grounds that they see fit in their own interests. customer time.”

“As long as these clauses are in the contracts, in this particular situation we know about Russian customers and banks, there is little that customers can do. They will just have to transfer their money and find other, perhaps abroad, banks that can serve them, ”- said the lawyer.

Cleridis noted that the closing of accounts is exclusively regulated by an individual agreement with customers’ banks.