With Russia and Ukraine sanctions piling up, businesses dealing with the two countries are starting to pull out.
One of the most recent to do is are Cypriot banks, who reported that they reduced their exposure to businesses in both countries by over 13,000 (in Russia) and 35,000 (in Ukraine) clients.
According to AP News, this is all worth $2.17 billion (or 2 billion euros). If recalled, Moscow's invasion of Ukraine's soil in 2022 led to international sanctions, not just by the US, but also by the EU, UN, and UK.
Data obtained by AP News shared that the number of Russian clients at Cypriot banks nearly halved during the said period, which dropped to 0.35%. Russian-held deposits also faced a decline, from 2.21% to 1.53%, after banks complied with imposed global sanctions against the country.
Cypriot Banks on Deals with Russians
As one of Putin's most important paths of cash flow, Cypriot banks pulling out is not just the first effort to soften their partnership with Russia. Over the past decade, SFGATE reported that it has been improving its practices after reports of weak oversight, which attracted wealthy Russian oligarchs engaged in questionable activities.
By focusing on creating a transparent financial system, Cypriot officials stated that they can now draw in genuine international investors who are looking for safe and legitimate places to invest their money.
This is an effort to offset the financial crisis it suffered in 2013, which led to near bankruptcy. Since then, Russian clients decreased by 90%.
Meanwhile, Ukrainian clients have dropped by 61% between 2014 and 2023. In the same period, Russian deposits also fell by 83%.
Currently, Cypriot banks are among the few that strictly enforce trade restrictions on goods that can be used for both civilian and military purposes. However, with these implementations, trade between Cyprus and other countries declined, falling from $17.9 billion in 2014 to $4.1 billion in 2023.
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