Western sanctions against individuals and entities connected with persons facilitating Russia’s war in Ukraine are forcing changes in company boards and shareholder structures, Giorgos Panteli, Permanent Secretary of the Finance Ministry, told the Cyprus News Agency (CNA).
Panteli explained that after the first round of US and UK sanctions against Cyprus-based entities in mid-April, Cypriot banks froze the assets of sanctioned persons, including non-sanctioned service providers due to their connections with sanctioned persons.
According to Phileleftheros, the Cyprus Registrar of Companies has frozen the accounts of more than 400 companies connected to sanctioned entities.
This sparked a series of changes in the boards and shareholder structures of the affected companies.
Following a legal opinion by the Law Office, the Registrar of Companies said it will accept the changes so that these persons will be allowed to carry on their operations.
“This will free the (affected) companies to continue their operations,” Panteli said.
Efforts underway to allow sanctioned companies to pay employees
Furthermore, procedures are in place to free up the assets of two large sanctioned service providers in Nicosia and Limassol, in order to pay their employees, Phileleftheros writes.
Sources told Phileleftheros that “diplomatic efforts are taking place for Cypriot banks to come to an understanding with US and British authorities to defreeze money for paying the accrued wages of employees working in sanctioned companies.”
Accountants to discuss sanctions with UK officials
Furthermore, Kyriakos Iordanou, Director of the Institute of Certified Public Accountants of Cyprus (ICPAC) told CNA that the sector is marked by uncertainty and concern ahead of the updated sanctions lists.
“There is widespread concern and uncertainty in the market, particularly in all those involved in the services sector as for the day after of new sanctions,” he said.
ICPAC will meet next week with officials from the UK to discuss the wider issued or sanctions control, he added.
The issue, Iordanou said, “has stigmatised the country’s reputation with significant impact on the capacity to provide services as an international centre.”
Cypriot companies affected by US-UK sanctions “facing operational issues”