PwC Cyprus helped Russian oligarch move $1.2 billion after Ukraine invasion despite sanctions: Report

One of the world’s biggest accountancy firms, PwC, helped Russia’s “richest” oligarch to transfer hundreds of millions in assets as sanctions by the European Union (EU) loomed after the Russian invasion of Ukraine, according to an investigation report.

Alexei Mordashov's case is among several uncovered in a document leak being called Cyprus Confidential, said a report by the Guardian.

The documents were leaked by an anonymous source to the International Consortium of Investigative Journalists (ICIJ) and Germany’s Paper Trail Media.

Cyprus Confidential

In what is said to be the largest-ever financial data leak from Cyprus, a cache of 3.6 million files suggests that PwC Cyprus and other advisers played a role in managing transactions as Russian forces launched the invasion of Ukraine in February 2022.

The cache of millions of files sheds light on the blue-chip accountancy firm’s work for the Kremlin-connected mining and banking tycoon, Alexei Mordashov, raising serious questions about PwC Cyprus’ role in a potential sanctions breach.

According to the Guardian, the files contain emails of PwC Cyprus staff discussing transfers of about a third of the shares in Tui, Europe’s largest travel company, to Mordashov’s life partner.

It is also reported that PwC Cyprus and other advisers helped one of Russia’s most powerful oligarchs attempt to transfer $1.2 billion in a public company on the day he was placed under EU sanctions.

The documents, as per the Guardian, also showed $652,629 worth of undisclosed payments from companies linked to the same oligarch to an influential German journalist who is said to be a leading expert on Russia, to support the publication of two books about President Vladimir Putin.

Since the beginning of what Russia calls its “special military operation” in Ukraine, western countries have imposed the largest-ever package of sanctions against Moscow and its business elite, but recently the focus has shifted to ensuring the enforcement of those restrictions.

The leak also revealed Cyprus’ role as a gateway into Europe for the Kremlin-connected elite as out of 104 Russian billionairesthat the Forbes magazine identified this year two-thirds appeared alongside family members as clients of the island’s professional service providers.

According to the reports, 71 Russian clients have come under sanctions since February 2022. However, advisers have reportedly said that many of these relationships have been terminated.

Cyprus govt vows to respond with ‘zero-tolerance approach’

Following the leak and the report by the Guardian, the Cypriot government has vowed to take a “zero-tolerance approach” to sanctions violations. A spokesperson said Cyprus was receiving technical support from the British government to create a sanctions implementation unit next year.

Additionally, the country has also joined an EU cross-border project on making sanctions effective, reported the Guardian.

The exact rules around the timeline and enforcement of the sanctions against the Russian president, officials, and its oligarchs are now under scrutiny, both in Cyprus and across Europe.

The Cyprus finance ministry said it had launched a criminal investigation into the transfer of Mordashov’s stake in Tui. “We are aware of Tui share transfers and a criminal investigation is being carried out,” said a spokesperson for the ministry, as quoted by the Guardian, when asked about the report.

Mordashov and PwC told the British media outlet they were unaware of the criminal investigation.