South Cyprus is enhancing requirements on commercial banks and intermediaries to know the identity of their customers, days after a massive data leak detailing how the world’s rich skipped through loopholes to transfer cash in low-tax jurisdictions.
Tighter regulations forcing banks and intermediaries to know their clients, as well as suspending account transactions for non-compliance, came into effect on Thursday, the Central Bank of South Cyprus said in a statement.
Reuters in its article dated 7th April stressed that South Cyprus is home to thousands of offshore companies, many of them Russian.
Britain’s Guardian newspaper reported on Sunday a network of secret offshore deals and loans which helped people close to Russian President Vladimir Putin to get rich, identifying some firms based in South Cyprus. One bank named, South Cyprus-based RCB, denied any wrongdoing.
The disclosures were part of a leak of documents from Panamanian law firm Mossack Fonseca on the financial arrangements of prominent figures worldwide, from Putin’s circle of friends to relatives of British Prime Minister David Cameron.
Greek Cypriot legislation allows the creation of companies with a “nominee” structure whose beneficiaries are not listed in company filings, but authorities say they impose a “know your customer” regulation on banks and intermediaries.