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Russia's announcements yesterday regarding two provinces of the Ukraine, and the subsequent movement of troops into the region have drawn a promise of serious economic sanctions by the Members of the European Union, and the United States. the sanctions, at least on the part of the US, will involve the seizure of Russian assets, and the designation of Russian oligarchs, and their holdings, wherever held.
This will pose major problems for both the Republic of Cyprus and the Republic of Malta, as these two European tax havens, or offshore financial centre, are holding assets, both liquid and in real estate and businesses, of Russian nationals, including the oligarchs. American and EU actions could include, but not be limited to, freezing correspondent accounts abroad, blocking wire transfers and seizing them, and finding ways to force banks located in those two countries to cooperate, lest they lose access to indispensable global financial markets on two continents.
Until we see the length and breadth of the scope of the sanctions, which are rumored to include OFAC actions, SWIFT blocks, and denial of access to the US dollar financial structure, it is premature to estimate the size of the threats facing Cyprus and Malta, but rest assured they will be significant. We shall publish specific information on sanctions, as they are imposed, for the benefit of our readers, on this blog. You may find it prudent to monitor it on a daily basis.
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