Russian bank accounts in Cyprus are being closed - media

The largest bank in Cyprus, Bank of Cyprus, has started closing accounts of its Russian clients. The reason for this is the fear of being sanctioned by the West in connection with servicing Russians.

The bank began sending letters to Russians last week (from 10 to 16 April), according to Russian media. These letters inform that the accounts will be closed within 2 months "because the user's data does not comply with the rules of the Know Your Customer procedure".

The "trigger" for the bank may be the tax residence in Russia. Another reason for closing an account may be the presence of income from sanctioned business in Russia (for example, dividends or salaries for employees working remotely for sanctioned companies), an "atypical" residence permit. In particular, this applies to those who are in Cyprus on a "digital nomad" visa (a visa for freelancers, self-employed and entrepreneurs working remotely. - Ed.)," the statement said.

How many Russians will have their accounts closed

Bank Of Cyprus is considered the largest bank in Cyprus. According to analysts, approximately 15% of all Russians living in the country may have accounts there.

At the end of 2022, Russians (excluding Cypriot companies owned by Russian citizens) kept more than €700,000 on bank deposits with the institution. This is 6% more than a year earlier.

They are afraid of sanctions

As the authors of the article explain, by closing accounts for Russians, Bank of Cyprus is trying to play it safe and exclude any possibility of using them to circumvent sanctions. "The restrictions are related to the recent expansion of US blocking sanctions," they note.

It is emphasised that each new SDN list (specially designated nationals list) applies not only to the list members but also to their affiliates. Therefore, interaction with both "may result in secondary sanctions".

"Recent US sanctions packages have included measures that stop the circumvention of previous restrictions. In the most recent package, Cyprus led the way in terms of the number of individuals added to the SDN list for assisting in the circumvention of past sanctions, so Bank Of Cyprus is spending significant resources to comply with all restrictions. ...If a bank or broker cannot eliminate the risks of servicing people under sanctions and does not want to incur high operating costs, it is easier to refuse to serve them," the article states.

Other banks may also start closing accounts of Russians

So far, only Bank Of Cyprus has initiated the account closure procedure. However, in the future, the authors of the article note, other smaller institutions may follow suit.

"The second-tier banks will follow suit at some point," the article concludes.

As OBOZREVATEL previously reported, Russian State Duma deputy Anatoly Wasserman wants to limit the storage of cash by Russian citizens. He has already prepared a draft law that proposes to oblige Russians to keep no more than 1 million rubles in this way.

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