Kenneth Rijock

Kenneth Rijock

Sunday, March 17, 2013

ALERT FOR SUSPICIOUS TRANSFERS FROM CYPRIOT ACCOUNTS


The planned bailout of Cyprus, which involves levying a one-time deposit tax on bank accounts as high as 9.9%, has certainly resulted in capital flight, and will continue to do so in the near future, as nervous foreign (mainly Russian) depositors decide to move their assets elsewhere. This means that dirty money will be moving to what are considered "safer" jurisdictions, where there is no economic reason for further taxes. If the Bailout Tax is later found to be insufficient by the EU, there may additional taxes, and this fear will further drive capital abroad.

Therefore, if you are a compliance officer at an international bank, ask your  new accounts staff these questions:

(1) Have your accepted any new business from customers moving funds from Cyprus ?

(2) have you seen any large transfers from Cypriot branches of European financial institutions ?

(3) Are any of these new clients Russian nationals, or nationals from the former Soviet republics that are now independent ?

(4) Have these new clients provided sufficient information about their business, and the Source of Funds that they are depositing with you ?

(5) Have the clients' personal data been verified through a trusted source ? I do not mean a Russian bank, but a reputable business intelligence resource, not local, but international.

I am not saying that you cannot accept any and all Russian funds coming from Cyprus; just ensure that it is clean money, and that save yourself the possible reputation damage that occurs when a client's criminal background appears in the media.


Nicosia, the last divided city in the EU

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