In its edition of 18 March, 2003, the Russian paper “Kommersant” refers to certain statements allegedly made by the Chairman of the Federal Commission for the Securities Market of Russia, during a conference in Geneva, Switzerland, according to which “the Central Bank of Cyprus is giving the Federal Commission for the Securities Market of Russia, all the information relating to the beneficial owners of Russian companies registered in Cyprus”.
In this regard, the Central Bank of Cyprus wishes to state the following:
(a) The Central Bank of Cyprus strictly adheres to the relevant provisions of the Central Bank of Cyprus Law which govern the maintenance of confidentiality in relation to all records and information in its possession.
(b) The Central Bank of Cyprus has signed on 21 March, 2002 a “Memorandum of Understanding” with the Federal Commission for the Securities Market of Russia for the sole purpose of regulating the provision of financial/investment services to the public at large by Russian owned companies established in Cyprus and by Cyprus owned companies established in Russia. The provision of financial/investment services to the public at large has to be governed by full transparency as regards the beneficial ownership of companies which wish to provide such services and, consequently, it is impossible for a Russian owned company which wishes to provide the above services in Russia or in other countries by establishing a presence in Cyprus without first obtaining the outward authorisation of the Federal Commission for the Securities Market of Russia and without an exchange of information between the two regulatory authorities i.e. the Federal Commission for the Securities Market of Russia and the Central Bank of Cyprus. The exchange of information in the above cases is effected with the full consent of the owners of the companies under incorporation and, consequently, the Central Bank of Cyprus is not restrained, in the above instances, by the confidentiality provisions of the Central Bank of Cyprus Law. The “Memorandum of Understanding” governs the relationship of the two regulatory authorities and whereas it is not an international treaty which binds Cyprus and Russia, it is, nevertheless, subject to the national laws of the two countries and the exchange of information is strictly restricted to that information only which is absolutely necessary to enable the two authorities to perform their supervisory/regulatory functions and provided that such an exchange is not contrary to the national interests of the two countries.
(c) It is also clear from the above that the “Memorandum of Understanding” does not cover the ordinary Russian owned companies established in Cyprus which do not provide financial/investment services to the public at large.
(d) The Central Bank of Cyprus has contacted the Chairman of the Federal Commission for the Securities Market of Russia seeking clarifications on whether he has actually made the statements attributed to him by “Kommersant”.