31.08.2022
According to the Bar Association, some of the largest law firms in Cyprus did not conduct due diligence on foreign investors who obtained a Cypriot passport under the now defunct citizenship by investment scheme.
Commenting on Phileleftheros daily, Christos Clerides, head of the Cyprus Bar Association, said she had reviewed the actions taken by some 20-25 major law firms in dealing with naturalization cases for their clients.
Law firms under scrutiny by the Bar Association have been mentioned in at least one of the two public inquiries conducted or in the latest report of the Auditor General.
Cleridis said the cases under investigation concerned non-compliance with the provisions of the Cyprus Bar Association and EU directives on money laundering.
He explained that the investigation looked at how law firms conduct due diligence to get to know their clients better.
“This entails a thorough investigation into who their client is, their history, whether they are politically exposed persons, whether they have ever been convicted of a crime, or whether they are wanted in their country or any other part of the world,” he said. Clerides.
Another aspect is whether lawyers carried out the necessary checks on the legality of the origin of investment funds.
“This means that every lawyer dealing with these issues must complete a financial profile of the client, know what his income is and whether he has the opportunity to invest money for investment purposes.
“In most cases, we looked at ; unfortunately , these two aspects were poorly tested, resulting in convictions and fines.”
Asked about the fines imposed by the Bar, Clerides said some have already been paid and others are pending.
“The Board will consider referring these offenses to the Disciplinary Board of the Cyprus Bar Association, given the non-compliance with the decisions, the money laundering law may constitute a violation of the rules of ethics.”
Clerides is confident that offenders will be brought to justice and will be called to pay for any wrongdoing.
In a recent investigation, the Auditor General said the citizenship-by-investment scheme was “rotten” .
A 200-page dossier on 3,517 cases of foreign investors who obtained citizenship under the golden passport scheme says that the actions of officials, including the cabinet, have deprived the state of significant revenues.
The report’s key finding is that many people who used the scheme did not meet the criteria.
At least 3,810 more people obtained passports as spouses, adult dependent children or parents of investors without any legal authorization.
A revealing report by an investigative committee led by former Supreme Court Justice Myron Nikolatos found that more than half (53%) of the 6,779 passports issued were illegally issued, fueled by a lack of due diligence or insufficient background checks.
