The attraction of Turkish-occupied northern Cyprus to Russian investors seeking to relocate funds inside Europe has seen a significant surge, the Guardian reports.
Trikomo, known also as Iskele by the occupying administration, once a modest town, has transformed into a hub for buyers from Russia, attracting them with a booming real estate market and thriving construction activity, driven by an influx of Russian and Iranian currency.
The area is now home to numerous Russian-speaking residents, with boulevards adorned by Cyrillic signs and luxurious amenities with local Turkish Cypriots often comparing Trikomo to Limassol.
However, this rapid development has also raised concerns about the rise of money laundering and shady practices in a region not governed by international agreements, described as a “grey area” ideal for illicit business by political scientist Sertaç Sonan.
The British high commissioner, Irfan Siddiq, highlighted the challenges of illicit capital movement, especially in the occupied north, amid stricter regulations in the internationally recognized Republic of Cyprus.
Western governments have welcomed President Nikos Christodoulides’ stated commitment to clean up the country’s financial industry, shuttering suspicious accounts and shell companies.
However, concerns linger about the effectiveness of long-operating networks of lawyers and accountants, sparking calls for structural reforms to prevent future scandals.
The absence of banking regulations, EU laws, and other international norms play a central role in attracting Russian and Iranian investors to the occupied north, transferring funds without the need to follow internationally agreed financial protocols.
The influx of Russian residents has caused language barriers in schools and has raised concerns about the region’s future due to its economic reliance on Russian funds.
While Turkey’s reluctance to impose sanctions on Moscow has played a pivotal role in Russian cashflows flooding the region, occupied Cyprus has seen a new rise in casinos and high-end vehicle traffic, indicating a growing influence of Russian money.
In contrast to the Republic’s elaborate services catering to oligarchs, investors in the occupied north primarily rely on legal firms creating anonymous trusts, enabling asset hiding and subsequent relocation of “cleaned” money to global financial hubs like London, Dubai, or Manhattan.
Despite promises to crack down on illicit financial activities, the lure of profits from property sales and construction permits has led to a tacit acceptance of questionable practices, notably the construction of properties on land that legally belongs to displaced Greek Cypriots having to flee due to the 1974 Turkish invasion.
However, despite the influx of Russians heading to the occupied north -official records indicating over 39,000 settling in this region this year alone- analysts remain cautious about endorsing the network of lawyers and accountants that have previously thrived in the internationally-recognized Republic of Cyprus.
Speculation has surfaced about Greek Cypriot lawyers aiding Turkish Cypriot counterparts in taking over the portfolios of Russian clients.
(With information from the Guardian)
