Why is russian money in cyprus

And that is believed to be one of the main reasons why savers with money in Cyprus are being forced to contribute to the bank bailout - an unprecedented event. The close financial relationship between the two countries is said to date back to the early s and the breakup of the Soviet Union when newly-rich oligarchs were looking for places to put their cash.

Cyprus refutes those claims, arguing that it has effective measures in place to combat money laundering. Mr Goltsblat explained that there is a whole industry in Cyprus based on serving Russian clientele. As part of the bailout deal agreed over the weekend, bank customers face a one-off levy. Those with less than , euros will have to pay 6. There was a deep unease and unhappiness at the move in Moscow. By Al Jazeera Investigative Unit. Published On 25 Aug More from News.

US: Death toll from Astroworld music festival stampede rises to 9. Rittenhouse murder trial: Closing arguments to be heard on Monday. Mexico raises interest rates for the fourth consecutive time. Most Read. Nobody really knows when he's there or for how long. At the Finance Ministry in Nicosia, the passport program and tax breaks are seen as a success, helping pull Cyprus from a three-year recession.

The economy expanded 1. Real estate purchases by passport seekers have put a floor under property prices, which normally would have cratered as banks cleaned up crisis-era mortgages through foreclosures.

The number of Russian tourists is up 65 per cent since before the crisis, government statistics show, helping hotels, restaurants and retail stores. That means more deposits in local banks and cheaper funding for them.

While everybody expected Russian money to flee, it didn't. Christos Vasiliou, head of advisory services at KPMG in Cyprus, said Russian tourists and money continued to flow into the country because it remains the best among offshore locations. The resurgence of Russian money in Cyprus has become important on the world stage because it keeps popping up in news about links between Trump's team and Russia.

Former campaign manager Paul Manafort used Cypriot bank accounts to receive money from Russian tycoon Oleg Deripaska and Ukrainian clients, according to court records and former executives at the bank where the accounts were kept.

Manafort and Deripaska have said the accounts were opened for legitimate business transactions. Commerce Secretary Wilbur Ross invested in Bank of Cyprus after the bailout, becoming vice-chairman of the island's largest lender for a time.

Some advisers who help foreigners get citizenship are starting to worry that the swelling number of new Cypriots will cause the EU to pressure the country to make the citizenship process harder.

If that happens, Russians looking to hide their riches might have to shop around again for new nationalities. Cyprus - which will elect a president in a run-off vote on Sunday - is still waiting on EU aid eight months after asking for help, with a bailout held up partly on German fears that the euro zone could inadvertently be bailing out wealthy Russians who have parked their money in financial institutions in Cyprus.

Allegations of money laundering are hotly denied by Cyprus, which says it got top marks in assessments by independent review bodies, such as Moneyval, an arm of the Council of Europe. So where is the money-laundering? Cyprus has dismissed the idea, aired in international media, that losses may be imposed on banks as a condition for EU aid. Like many on the island, Neocleous accuses fellow Europeans of hypocrisy, saying Europe and the United States take a much bigger share of Russian business than Cyprus.

Cyprus takes out of this cake European misgivings focus on why tiny Cyprus is such a big magnet for Russian money.