![]() It's worth noting that setting up foreign companies and bank accounts is not illegal, however using them to evade taxes or hide proceeds from ill-gotten gains is. criminal charges were filed in that case. "Unfortunately, it takes a long time for the stigma to wash off."įederal prosecutors became interested in Manafort's activities in Cyprus years ago as part of a broad investigation to recover stolen Ukrainian assets after the ouster of pro-Russian President Viktor Yanukovych there in early 2014. "Since its entry into the European Union in 2004 and especially after the 2013 banking collapse, Cyprus has done much to clean up its act," said Sofronis Clerides, professor and chair of the economics department at the University of Cyprus. Cyprus banking officials have in recent years started taking tough action and asking uncomfortable questions to suspicious clients, desperate to rebuild confidence in the banking system." EU authorities, worried that any bailout package would ultimately be going to help out Russian multimillionaires, insisted on tough anti-money laundering laws and regulations as part of any rescue deal. When Cyprus suffered its own financial crisis in 20 and requested a bailout, German intelligence reportedly estimated that Russians had roughly $26 billion in deposits in Cypriot banks. Its role has drawn scrutiny from other members of the European Union as well, particularly after Cyprus joined the bloc in 2004. Henry, an economist and former journalist with the Tax Justice Network, which studies offshore tax havens.Ĭyprus and Russia have a favorable tax treaty, which has resulted in Cyprus having a cottage industry of bankers and lawyers on the island who primarily exist to set up shell corporations and trusts to help money move in and out of Russia, Henry and other experts said. Most of the money that goes into Cyprus is then invested back in Russia," said James S. "Russia has become the primary source for investors in Cyprus, usually through banks or companies set up as trusts. The country had been accused in the past of providing lax oversight to potential money laundering, as well as providing ways for Russian and Ukrainian officials to hide assets abroad.įILE - Rick Gates, a former campaign official for U.S. The country is listed as the domicile for a dozen of Manafort's shell corporations and the alleged source of millions of dollars in wire transfers in and out of the country.Ĭyprus has been a focus for anti-money laundering officials going back to the 1990s, but is probably best known for its alleged ties to money flowing in and out of Russia. ![]() The Mediterranean island country of Cyprus plays an outsized role in Manafort's indictment. "They don't ask questions about what their banks know about their customers, which is a basic requirement to stop money laundering," said Ted Truman, a fellow at the Peterson Institution for International Economics and an expert on money laundering. Special counsel Robert Mueller has accused Manafort and his business partner Rick Gates of using shell corporations located in the three countries - Cyprus, the Seychelles, and Saint Vincent and the Grenadines - as a way to hide assets and keep from paying taxes. ![]() The three countries named in the indictment of former Trump Campaign Chairman Paul Manafort span three separate continents but all have something in common: They're island nations with a legacy of relatively lax oversight of offshore entities and a known history of being a conduit for suspicious money. ![]()
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