Bank of Cyprus announced the closure of accounts of 4 thousand Russian clients

The largest Cypriot bank Bank of Cyprus notified about 4 thousand clients with a Russian passport about the closure of their accounts. This is stated in the message of the bank received by RBC.

“The Bank of Cyprus has notified 4,000 non-EU resident Russian passport holders that their accounts will be closed in accordance with the customer acceptance policy and appropriate risk appetite,” the bank said. The representative of the credit institution explained that the deposits in the accounts of these 4 thousand customers account for less than 0.5% of the total deposits of the Bank of Cyprus. In total, as of December 31, 2022, only 3% of deposits in the Bank of Cyprus belonged to clients from Russia and Belarus. As follows from the financial statements of the bank, the total volume of client deposits at the end of last year amounted to €19 billion.

According to a bank representative, this decision was made after the Financial Action Task Force (FATF) suspended Russia's membership in the group. This happened on February 24, 2023 in connection with the adopted resolution of the UN General Assembly demanding that Russia "completely and unconditionally withdraw all its armed forces from the territory of Ukraine." At the same time, as stated in the FATF statement, Russia remains responsible for fulfilling its obligations to implement the group's standards. Another reason for closing accounts is the addition of Russia to the list of non-EU tax jurisdictions.

Earlier, Bank of Cyprus clients began to receive notifications about the closure of accounts, said the law firm Main Partner Trust, which specializes in legal and financial services. The bank informed customers that their accounts would be closed within two months of receiving the letter. The reasons for closing the account are Russian tax residence, the presence of income from the sanctions business, as well as the “wrong” type of residence permit (residence permit, for example, F or visitor), the lawyers indicated. This also applies to those who are in Cyprus on a "digital nomad" visa. In addition, according to the company, on April 20, all Bank of Cyprus clients with Russian passports received a message asking them to provide a residence permit in Cyprus.

As Main Partner Trust explains, Bank of Cyprus could take such a step due to fear of US and UK sanctions that prohibit the provision of consulting, marketing, IT, legal and other services not only to companies from Russia, but also to individuals who live in territory of the country. “The Bank of Cyprus usually applies the toughest rules first, followed by its rivals Hellenic and Eurobank. The latter do not yet send such letters to clients, ”said Alena Sakharova, director of the company, to RBC. She recalled that since last year, all banks in Cyprus have not opened accounts for clients without a residence permit or EU passports.

The Cypriot government has already called on local banks to comply with sanctions against Russia. Government spokesman Konstantinos Letimbiotis said that the Cypriot authorities would not tolerate violations of the restrictions imposed by the EU, and Cypriot President Nikos Christodoulidis demanded that a road map be prepared with a list of effective actions to be taken.