How Ukrainian Oligarchs are Exploiting Cyprus to Illegally Smuggle Money out of Ukraine

How Ukrainian Oligarchs are Exploiting Cyprus to Illegally Smuggle Money out of Ukraine

I normally don't care about politics unless it affects me or my friends personally. However, I've got many good friends in Ukraine, some of whom have been drafted to the war to fight.

At the same time it has come to my knowledge that Ukrainian Oligarchs are creating shell companies in Cyprus, selling non-existent IT services to themselves and their friends, and using this to illegally smuggle money out of Ukraine.

I love both Cyprus and Ukraine. Cyprus is especially close to my heart. When I was suffering 7 years ago, Cyprus accepted me as one of their own. It is therefor with heavy heart I tell you that there's a cancerous tumour in Cyprus these days - And it's all because of Oligarchs from Ukraine expliting Cyprus' hospitality.


When the war broke out in Ukraine, it became illegal to move money out of Ukraine. The only exception was if you needed to pay for software products. This resulted in that a lot of rich Ukrainians could no longer get money out of Ukraine to pay for their lavish lifestyles in EU.

Some "creative" Oligarchs realised they could setup shell companies in Cyprus, selling fictious non-existant software products to their Ukrainian companies, and their friends, to such create legitimate "invoices" that was paid for in Ukraine, going to bank accounts in Cyprus.

They basically created a backdoor money laundering channel for funds going from Ukraine to EU

Why do I care?

I've got friends in Ukraine. Some of whom have been drafted to the military, fighting a war, where parts of the ruling elite of Ukraine couldn't give less of a shit. Ukrainians are today fighting a war for a country, where parts of its ruling elite are doing everything they can to continue their lavish lifestyle, buying another Rolex watch, or another BMW 840, or spending tens of thousands of EUROs on casinos in North Cyprus, living at 5 star hotels - While the Ukrainian people are suffering.

This money could have been used to help the poor. It could have been used for medicine to wounded soldiers. It could have been used to help win the war. But (some) selfish Ukrainian Oligarchs are more interested in "yet another BMW 840" or "yet another 20 million mansion" in Cyprus then helping their fellow Ukrainian people 😞

The "boy club" you're not a member of

The way it works, is that they use new or existing companies in Cyprus, delivering software services. If they don't have a company from before, they setup a new one, with a sham website, some rubbish product, having zero revenue besides what their Ukrainian companies are being invoiced.

If they have another unsuccessful software company from before, they use this company as an "invoice factory", to send invoices to their own Ukrainian companies, or companies in Ukraine owned by their friends. This allows them to "legally" pay an invoice, sending money to Cyprus, which they later share on this side of EU - Allowing them to basically "smuggle" money out of Ukraine.

I love Cyprus, but this is painful to watch!

How to identify such sham companies

It's easy. First check all bank transfers from Ukraine to Cypriot companies. This is easy since most banks in Cyprus are already under "EU administration" because of the Panama papers. Then audit companies having large sums of money going from Ukraine to Cyprus. If 80% of the revenue of these companies originates exclusively from Ukraine, you've got "a winner".

I'm not sure about the laws in regards to this in Cyprus and EU - But I am pretty certain of that this would be considered high treason in Ukraine. My advise to the President of Ukraine is to simply take their Ukrainian assets, confiscate these because of their crimes, and sell these assets to the "highest bidder". Having a small fraction of the Ukrainian ruling class exploiting not only Ukraine, but also EU and Cyprus, cannot in any ways what so ever be perceived as "OK" by any means of the word!

It's simply sad to watch 😢

Thomas Hansen

Thomas Hansen I am the CTO of AINIRO.IO AS and the CEO of AINIRO.IO, Ltd. I am a software developer with more than 25 years of experience. I write about Machine Learning, AI, and how to help organizations adopt said technologies. You can follow me on LinkedIn if you want to read more of what I write.

Published 14. Aug 2023

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