Maxim Avrashkov has provided his comments on the toughening of regulations on bank accounts in Cyprus

According to Russian media sources on Friday 1 June, Cypriot banks received an instruction from the Cypriot Central Bank to close the bank accounts of offshore companies which are not engaged in genuine commercial activity. Under new regulations, companies are required to declare their ultimate beneficiaries, sources of income as well as any investments in shares or other securities in countries and to be associated with a Cypriot business which holds an account with the same bank.

According to Maxima Legal’s partners in Cyprus, the situation is less dramatic. “According to our sources, the Cypriot Central Bank has given banks 90 days to conduct a review after which the real consequences of the regulator’s actions for Russian businesses can be determined”, explained Managing Partner, Maxim Avrashkov, to online news website Fontanka.ru.

According to Maxim, following the recent visit to Cyprus of representatives from the US Treasury, the position of the Central Bank could be described as unsurprising. “Will it lead to similar actions to improve the transparency of Russian business? It is difficult to say. The impression is that some capital will be uncovered, and some will disappear even deeper. For companies working “in the grеy” or “in the black”, there is now pressure on all fronts – both in Russia and in Europe. For such companies, hard times have come”, Maxim summed up.

Maxim noted that banks in the Middle East, Asia and Estonia remain reliable partners for Russian business.

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