In the Cyprus banking crisis, almost all the focus has been on Russian money in account there, but Ukraine also has strong business and financial ties with the island.
Many companies with Ukrainian links are incorporated in Cyprus .. but experts say that they don’t keep very large sums of money parked there, as it tends to quickly move on to tax havens.
Ukraine’s Prime Minister Mykola Azarov said his countrymen are far less exposed than the Russians: “We can say that the losses for Ukraine will be way lower than for Russia. This is why Russia has reacted the way it has. For us this won’t have such a serious impact as for Moscow.”
And he added maybe Ukrainians might think twice now about keeping their money abroad as it seems it’s safer at home.
Ukrainian businesses are incorporated in Cyprus for the tax advantages that brings when they move their money there and then bring it back. Expert Dmytro Boyarchuk with the CASE economic research think tank told euronews that events in Cyprus will disrupt that: “Probably the oligarchs, the businessmen will take some time to relocate their money in some other banks and other countries and this may affect the amount of investments coming into Ukraine.”
Banking secrecy laws make it difficult to know how much Ukrainian money is in Cyprus.
Estimates range from less than four billion euros to more than 15 billion, but certainly much less than the totals of Russian cash.