Reported by Simon Goodley

For years, Cyprus has acted as a gateway for Russian fortunes into Europe, with the PwC partnership in Nicosia seeming to have profited from that flow of business. An analysis of the files from Cyprus Confidential project – a cache of 3.6m offshore records leaked to the International Consortium of Investigative Journalists (ICIJ) and Germany’s Paper Trail Media, suggests that 39 PwC Cyprus clients were named on sanctions lists last year by the US, the UK, the EU or Ukraine after the 2022 invasion. PwC Cyprus says it has since terminated relationships with 150 “client groups”.

Before March 2022 the firm’s high net worth clientele included the steel, mining and banking tycoon Alexei Mordashov, who in 2021 was named by the business magazine Forbes as Russia’s “richest person” with a fortune of $29bn. On the day Russia invaded, he was one of 36 business leaders who met Vladimir Putin at the Kremlin, according to the EU.

Three days after the invasion, on Sunday 27 February, Europe’s foreign ministers gathered by video conference to agree a fresh round of sanctions. On the same day, the EU’s most senior diplomat, Josep Borrell, said the latest sanctions were imminent, that they would be targeted at oligarchs, and were likely to be active before the start of business the next day.

On Monday 28 February, at 6.38pm central European time, documents suggest, a PwC Cyprus employee used a Mordashov company email address to send a message to a colleague, concerning the sale of a huge chunk of the tycoon’s stake in Tui to his partner, Marina Mordashova. The communications involved staff at a Cypriot offshore services provider which appeared to manage a number of Mordashov companies.

The holding equated to about £1bn in shares in the tourism group, which is one of the largest companies listed on the London and Hanover stock exchanges, plus Frankfurt’s electronic exchange Xetra.

Five minutes after that email, another PwC Cyprus employee replied “Approved” before adding, “Price will be finalised in a while.”

The lack of an agreed sale price suggests a deal cannot have been concluded at that point. But just 77 minutes later, the European Council sent out a message of its own, announcing that Mordashov – along with 25 other individuals – had been added to the sanctions list. The press release and sanctions notice described Mordashov as one of “Putin’s elite” who was allegedly “benefiting from his links with Russian decision-makers”.

The exact timing of when those sanctions legally came into force is now under scrutiny.

Read full report: https://amp.theguardian.com/business/2023/nov/14/pwc-cyprus-russian-tycoons-ukraine-invasion-sanctions