(Image: Private Media/Zennie)

PwC’s Cyprus arm is under criminal investigation over alleged attempts to help wealthy Russian clients evade sanctions imposed on them after the 2022 invasion of Ukraine. 

The International Consortium of Investigative Journalists (ICIJ) revealed overnight a number of incidents in which the accounting firm had tried to help its clients move large sums of money around as the European Union and others slapped sanctions on Russia after the February 2022 invasion of Ukraine. 

In one instance, a Russian billionaire was helped by PwC to move $1.4 billion worth of shares in German travel company Tui out of his name a day after he was hit by European Union sanctions. Reporting partner The Guardian quoted a spokesperson for the Cyprus Ministry of Finance as saying: “We are aware of Tui share transfers and a criminal investigation is being carried out.”

The Australian Financial Review, another reporting partner that helped break the story, reported professional service providers could in some cases have “scope” to work with clients even in the face of sanctions.

“They’re perfectly within their rights to keep doing this work, but it points to the rot at the heart of the accountancy industry,” Human Rights Foundation Combating Kleptocracy program director Casey Michael told the outlet.

The revelation is a new embarrassment for PwC, the UK accounting giant that operates loosely affiliated franchises around the world, including an Australian arm that’s been at the centre of a massive confidentiality scandal.

Greens Senator Barbara Pocock, who has been scrutinising PwC’s Australian operations as a member of a federal inquiry, claimed the revelations showed “how the driving principle behind PwC globally is to maximise profits with no regard to the morality of what they are doing”.

“In this case we see one of their offices breaking the firm’s policy in regard to dealing with entities under international sanction. While the activities, which occurred at PwC Cyprus, are on the face of the evidence reprehensible, there are also indications that other big four firms have been involved with Russian oligarchs,” she told Crikey.

“The exposure of this activity by an international group of investigative journalists confirms what many Australians see as an endemic ethical failure of big business. What we should be concerned about is regulating these big international firms when they are anywhere near the public purse, and holding them to account where they act illegally in helping private interests.”

A PwC International spokesperson said every part of the business took sanctions “extremely seriously” and added PwC Cyprus had applied all EU and United Nations-imposed sanctions before the invasion. 

“As we announced in March 2022, with regards to sanctions following the Russian invasion of Ukraine, PwC introduced a policy, that goes beyond what is legally required, of applying all sanctions imposed by major countries across the PwC network, irrespective of the sanctions country of origin,” the spokesperson said.

“We strive to maintain the highest professional standards at PwC and set clear expectations for consistent professional and ethical behaviour by all PwC firms … Any allegation of non-compliance with applicable laws and regulations is taken very seriously, investigated and appropriate action is taken if necessary.”

The spokesperson added that PwC Cyprus had terminated relationships with “approximately 150 client groups” after the Russian invasion of Ukraine, including 60 that were ended as a consequence of the internal Russia-related sanctions policy. An additional 90 were terminated “following a further geopolitical de-risking review by PwC Cyprus of its international client portfolio”.

Since the invasion, PwC has “pivoted to a new economic model fit for the future, transforming its business”.