Putin, Biden, and the ‘Aircraft Carrier’ Called Cyprus

A new report casts fresh light on Mediterranean island’s role as safe haven for Russian oligarchs’ fortunes and magnet for other foreign money of dubious provenance.

AP/Petros Karadjias
A man walks on a dock as a ship seen in the background in southern port city of Limassol, Cyprus. AP/Petros Karadjias

Cyprus, the sunny Mediterranean island where ancient sources say Aphrodite freely frolicked, has just been adjudged to play “an even bigger role than was commonly known in moving dirty money for Russian President Vladimir Putin” and other dictators. 

That determination by an international consortium of journalists lends fresh credence to the strategically situated country’s reputation as  a hotbed of money laundering. It raised the hackles of President Christodoulides, who told reporters that “everything that has come to light will be investigated.” 

One of those things is the claim that the auditing firm PricewaterhouseCoopers “hurried to restructure companies belonging to Russian oligarchs as the prospect of EU, U.S., and U.K. sanctions resulting from Russia’s invasion of Ukraine grew more likely.”

The report is titled “Cyprus Confidential.” It claims that in 2014 — less than ten years after Cyprus, despite the fact that part of it comprises the self-proclaimed Turkish Republic of Northern Cyprus, joined the EU — Moody’s estimated that $31 billion of Russian assets were parked in Cyprus.

By conservative estimates that accounted for well over half of the country’s wealth.  Investigators reviewed documents leaked from Cypriot financial service providers to better understand how those firms helped wealthy Russians to restructure their funds and sometimes hide them altogether. 

Little wonder that what one could call the Kremlin crony community has found the island, which is home to two British bases and that has been called the unsinkable aircraft carrier of the Mediterranean, to be so useful over the years. The sunshine that gave Aphrodite her golden glow also makes room for plenty of shade. 

Somewhere in those shadows there are too the contours of Joe Biden, whose family is no stranger to the twists and turns of opaque international financial dealings. Mr. Biden made a curious pass through Cyprus in the spring of 2014, when he was serving as vice president. A former president, Nicos Anastasiades, hosted the vice president and Mrs. Biden for a private dinner at his  residence near the port city of Limassol.

Mr. Anastasiades’s own law firm has been accused of concealing the assets of a wealthy Russian exile, Leonid Lebedev.  In any event, Mr. Biden’s little-publicized side trip to Cyprus followed a more consequential stop at Kyiv.

A former White House stenographer, Mike McCormick, has previously claimed that Mr. Biden, as vice president, was using American taxpayer money to enrich his family through Washington-backed gas deals in Ukraine. He also named the current national security advisor, Jake Sullivan, as Mr. Biden’s co-conspirator in “promoting a kickback scheme with Ukraine.”

What does Cyprus have to do with all that? There is no clear cut answer, but despite his age neither Joe Biden nor his son Hunter are likely to have forgotten that the notorious Ukrainian energy firm Burisma was actually registered in Limassol — and not because the office was close to nice beaches.

“No one is above our country’s reputation,” the Cypriot president, Mr. Christoulides, said last week, adding “the credibility of our country, you understand, is crucial.” Following the publication of Cyprus Confidential, the country’s police have reportedly started investigating how one Russian tycoon moved more than $1 billion on the very day he was sanctioned. 

It sounds like “The Wolf of Wall Street” meets the moufflons of Cyprus. But even absent the current report and regardless of the Kremlin crowd’s growing catalog misdeeds — to say nothing of the Biden clan’s checkered fiscal past — the reputation of Cyprus as money laundering still precedes it. It is not just the stuff of dry reports; a worthy new work of fiction about the island spins island financial shenanigans to uproarious new heights.

To its credit Cyprus has cracked down on those named by Washington and  London for allegedly helping Russian oligarchs bypass sanctions on Moscow because of the Ukraine war. The government has said it has taken action against money laundering and sanctions-busting since Russia invaded Ukraine in February 2022.

For example, the Cyprus Central Bank says that authorities have shuttered 43,000 shell companies and 123,000 suspicious bank accounts in recent years.

But the new report, which took eight months to complete, still refers to what it calls Russia’s “long-standing hegemony” over Cyprus’s intersecting worlds of international politics and finance.

That high-flying friends of Mr. Putin have  much to hide and plenty of reasons to want to do so is fairly obvious. For Russians,  an island that is a relatively short flight from Moscow, already home to many expatriate Russians,  and a quick sail to Russia’s naval base in Syria (should the need ever arise for that kind of cruise) is almost irresistible.

It is arguably more interesting what other lucre-loving servants of the public have hidden in Cyprus over the years — or tried to hide.

The New York Sun

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