other revelations from “Cyprus Confidential”

Since November 14, 2023, the investigation unit of Radio France, partner of the International Consortium of Investigative Journalists (ICIJ) associated with 68 other media, has revealed how the island of Cyprus, a member state of the European Union, has become a hub for questionable financial transactions. Through millions of confidential documents to which we had access, the international investigation “Cyprus Confidential” notably demonstrated that a close friend of the Kremlin targeted by international sanctions, Alexey Mordashov, managed to transfer via Cyprus 1.4 billion dollars in the aftermath of the war in Ukraine. But also that this oligarch paid, via a front company, more than 600,000 euros to a German journalist, Hubert Seipel, who wrote a bestseller and made a documentary on Vladimir Putin. These are not the only elements revealed by “Cyrpus Confidential”.

Abramovitch, football and financial fair play

The name of another oligarch, much better known, also appears numerous times in our documents. Roman Abramovitch, whose fortune is estimated at nine billion dollars, has been part of Vladimir Putin’s inner circle since the end of the 1990s. He bought the English football club Chelsea in the early 2000s. Club he had to resell in 2022, after joining the list of Russian billionaires under sanctions.

The “Cyprus Confidential” project raises the question of the existence of a possible slush fund at Chelsea FC during the Abramovich era. The confidential documents that we were able to consult suggest that the oligarch was able to break the rules of financial fair play to boost his club’s results by using an offshore services firm, MeritServus. The latter had been used to administer 14 Cypriot trusts owned or controlled by Roman Abramovitch. Certain secret payments made, estimated at several tens of millions of pounds sterling, which could amount to hidden commissions, are linked to his Premier League club. As our partner tells us The world , one of the companies belonging to Roman Abramovitch, registered in the British Virgin Islands, concluded a contract in 2017 providing for the payment of more than 11 million euros to an Italian agent, Federico Pastorello. The same day the renewal of Antonio Conte’s contract as Chelsea coach was announced. However, several sources indicated to ICIJ partners that Federico Pastorello was Antonio Conte’s agent at the time. Asked about a possible hidden commission, Federico Pastorello refused to speak.

But leaked documents reveal other suspicious payments. Thus, the former sporting director of Chelsea FC, Frank Arnesen, would have received 250,000 pounds from an offshore company controlled by the Russian oligarch. A million pounds would also have been paid to the training center run by the striker’s brother Bertrand Traoré, a few days after the Burkinabe player signed for the London club. Player agent Vladica Lemic, renowned for having played a decisive role in the arrival at Chelsea of ​​striker Arjen Robben and coach Carlo Ancelotti, would have received seven million euros.

Did Roman Abramovitch break the rules of financial fair play by secretly dipping into his personal fortune and exceeding the ceiling imposed by football authorities? One thing is certain: these payments were not recorded in Chelsea’s accounts. Contacted by the ICIJ partners, the current management of Chelsea responded that “These allegations predate the current ownership of the club. They are based on documents which have not been shown to the club and do not relate to anyone currently at the club.”

A hub of the porn industry

Football is not the only “industry” to have benefited from the support of the Cypriot financial sector. In just a few years, the island has also become a hub for the porn industry. It houses dozens of sites with adult content, for essentially fiscal reasons. Not only can the effective tax rate be as low as 2.5%, but the small EU member state hardly taxes dividends and royalties. The documents that ICIJ partners were able to consult show in particular that a subsidiary of a large porn group only paid two million euros in taxes in 2019, thanks to sophisticated tax optimization schemes. but legal, while it achieves a turnover of 248 million euros.

As our colleagues write World , Cyprus presents another advantage for the pornography industry. While almost all major banks refuse to work with the sex industry, notably for reasons of image and legal liability, Cypriot service companies consider porn companies to be mere clients. Here again, the “Cyprus Confidential” project tells us that these prono industry companies based in Cyprus are mainly owned by Russians, and that they mainly employ Russians, Belarusians and Ukrainians. “In this sector, the conflict in Ukraine does not exist”, quips a former figure in the porn industry interviewed by The world. “In all these companies, Russian and Ukrainian citizens work together.”

Secret transactions with Syria

The “Cyprus Confidential” project further reveals the existence of illegal transactions with dictatorships. Examination of the documents to which we had access shows that there were indeed discussions between the Syrian state oil company and an intermediary registered in Cyprus, regarding the purchase of drilling equipment manufactured by NOV, a American manufacturer based in Houston.

The Syrian Petroleum Company (SPC), controlled by the government of Bashar al-Assad, and this Cypriot intermediary discussed at least five transactions between 2014 and 2019 to obtain NOV material. However, in 2011 the United States imposed a strict ban on its exports to Syria. And in their sanctions, the American authorities had specifically targeted the SPC. In 2017, the company NOV, listed on the New York Stock Exchange, announced that it had ceased its activities with Syria since 2014. The documents we analyzed therefore show the opposite.

Cyprus and cyberespionage technologies

The “Cyprus Confidential” investigation finally shows that Cyprus has attracted Israeli businessmen specializing in cyberespionage technologies. Tal Dilian, for example, a sulphurous former commander of an elite unit of the Israeli intelligence services who became a cybernetic arms dealer, created in Cyprus, with his associate and ex-wife, the lawyer Sara Hamou, an alliance of companies known as Intellexa.

Intellexa sells spyware called Predator. This Pegasus competitor transforms a smartphone into a device that spies on its owner. Predator has been identified in at least 25 countries, according to an investigation by the European Investigative Collaborations published in October 2023. It turned out that it had notably infected the phones of a Greek journalist and a member of the opposition . This case sparked an outcry and prompted the United States to blacklist two Tal Dilian companies.

However, the documents analyzed as part of the “Cyprus Confidential” project show that to sell its spyware, Sara Hamou set up a vast network of companies, stretching from North Macedonia to Hungary, via Greece and Ireland, in order to slip through the cracks of European regulations.

Tal Dilian’s presence in Cyprus has made it all the easier for his company to grow because Israeli cyber surveillance companies, which are largely run by veterans of the army and intelligence services, must obtain licenses. export to a branch of the Israeli Ministry of Defense. The latter verifies that foreign sales do not harm Israel’s national security or its international reputation. In Cyprus, nothing like this. Tal Dilian was therefore able to sell his spyware without seeking approval from Israeli regulators. This did not prevent him from frequently returning to his country of origin to recruit computer hacking experts, themselves former members of the Israeli security services. Asked by ICIJ partners, Tal Dilian and Sara Hamou did not wish to comment.

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