Russian Security Services Use Cyprus as EU Beachhead to Undermine the West

Executive Summary:

• The FSB and other Russian intelligence agencies’ activities have transformed Cyprus into a Kremlin beachhead in Europe, going largely unnoticed.
• Moscow has long focused on European countries, like Cyprus, that are a part of the European Union but not NATO members, to undermine the West.
• The Cypriot government’s corrupt practice of issuing “golden passports” ended in 2020, but the Kremlin has a slew of options in Cyprus to carry out illicit economic activities and penetrate the West.

Since February 2022, many European countries have denounced Russian President Vladimir Putin’s expanded war, imposed sanctions, and expelled Russian spies operating under diplomatic cover (Statista, October 9, 2023; see EDM, December 11, 2019, April 3). Last week, demands that the West do more followed a report on May 5 that Russian agents have been plotting to sabotage key infrastructure across Europe to disorder the continent, undermine its opposition to Putin’s war, and prepare the groundwork for a future Russian move against North Atlantic Treaty Organization (NATO) members (see EDM, April 23; Financial Times, May 5). In this, attention has been focused primarily on NATO countries such as Hungary, which opposes the Western response to the Kremlin’s aggression, and on Russian activities there. Little attention has been paid to developments in EU countries that are not members of NATO, such as Austria, Cyprus, Ireland, and Malta. Moscow has had more success in promoting its positions in these countries and uses that influence to carry out diplomatic and other activities to advance its interests against the West.

Cyprus is by far the most important of these in that regard, and Moscow has good reason for focusing on it. Cyprus is an ethnically divided island in the Mediterranean Sea that has been a member of the European Union since 2004, though EU laws do not extend to the breakaway Turkish Cypriot north. Due to these divisions, the island is not a member of NATO. Thus, it offers Russia troubled waters in which to fish.

Cyprus’s problems have opened the way to a massive influx of Russians over the past two decades—now more than 120,000 reside in Cyprus, almost 10 percent of the population. Another consequence is the Cypriot government’s corrupt sale of so-called “golden passports.” These documents have allowed 2,900 wealthy or otherwise well-connected Russians to acquire travel authorization to move freely throughout Europe—something Moscow could capitalize on. The EU denounced this practice in 2019, and Cyprus ended it in 2020 (Al Jazeera, February 2, 2019, August 28, 2020; Radio Free Europe/Radio Liberty, April 14, 2022). Nevertheless, that is hardly the only Russian activity in Cyprus that the West has denounced. Others continue to this day. For example, in November 2023, investigative journalists pointed to how Russian banks on Cyprus were helping the Putin regime evade sanctions, reports that prompted the Federal Bureau of Investigation to try to block such activity (International Consortium of Investigative Journalists, December 4, 2023, accessed May 7).  

On May 1, the Dossier Center, a group affiliated with Russian émigré opposition leader Mikhail Khodorkovsky, released a 3,000-word report detailing how Moscow has transformed Cyprus into a European beachhead for the Russian Federal Security Service (FSB) and Moscow’s other security services (Dossier Center, May 1). The picture the report provides is extremely disturbing but will hopefully prompt European and other Western governments to take immediate and effective action against operations that, up to now, have remained largely below their radar screens.    

The investigative report points out that Cyprus, in sharp contrast to other EU member states, has not deported a single Russian diplomat since February 2022. In fact, during that time, the Russian embassy on the island has grown to more than 300 staffers, all of whom are far from genuine diplomats; has installed new communications antennae on its rooftop; opened a consulate on the Turkish portion of the island (a first for Russia and a victory for Ankara); and expanded its work with the Russian diaspora (Utro02.tv, September 15, 2022). Perhaps most indicative of Moscow’s intentions is Putin’s naming of Murat Zyazikov, a lieutenant general in the FSB with no diplomatic experience, to be ambassador to Cyprus in September 2022. In December 2023, Putin decorated Zyazikov for his work on the island (Gazeta.ru, September 12, 2022; Cyprus Butterfly, December 23, 2023).   

Some observers might be inclined to dismiss the enormous size of the Russian embassy in Cyprus as little more than a reasonable response to the presence of a large ethnic Russian population there, including several prominent retired politicians and oligarchs, and Moscow’s placement of tens of billions of US dollars in Cypriot banks for money laundering (Cyprus Butterfly, October 12, 2019; The Bell, March 17 2021; International Consortium of Independent Journalists, November 14, 2023). Yet, as the Dossier Center notes, Moscow and its embassy in Nicosia have used both the Russian population and its money in Cypriot banks to circumvent sanctions and gain influence over Cyprus’s domestic and foreign policies. While it is now typically forgotten, in 2016, Cyprus was the first European country to call for the lifting of Western sanctions imposed on Moscow after Putin’s Anschluss of Crimea (Forbes.ru, July 7, 2016). Today, the Cypriot government is among those who oppose seizing Russian assets and transferring the proceeds to Ukraine (Rosbalt, May 7).

The Dossier Center goes on to report that “the leadership of the intelligence activities of various Russian agencies—the FSB, SVR [Foreign Intelligence Service], and GRU [Main Directorate of the Russian General Staff]—are concentrated in Russia’s diplomatic representations,” including in Nicosia. In the case of Cyprus, a country with only 1.2 million people, those agencies inevitably carry out operations not only on the island but in other countries as well, confident that they are more likely to get away with their actions as a result. Their work involves contacts with EU countries, many of which are NATO members, and other Western allies, including Israel.

Staffers of the Russian embassy in Nicosia work closely with the Russian Orthodox Church of the Moscow Patriarchate, though it has only one church in Cyprus. They support Russian-language media outlets and public activities of a nature that most EU countries have banned since 2022. They back the formation of political parties to run candidates for the national government and representation in EU institutions. And they regularly influence Cypriot government decisions on education, language, and other issues. As is often the case with intelligence operations, the media tends to cover failures rather than successes in this regard. Nevertheless, even this kind of reporting highlights how ramified Moscow’s approach to Cyprus as a beachhead has become (Organized Crime and Corruption Reporting Project, February 3, 2023; The Insider, February 4, 2023; Cyprus Daily News, January 24, 2020, March 29).

In presenting the investigation, Dmitry Khmelnitsky of the Dossier Center says that its findings should be of concern not only to Cyprus but to the West as a whole. Those who ignore what Moscow is doing because Cyprus does not follow the EU sanctions regime are missing something critical. As Khmelnitsky concludes, “Cyprus does not seek to get rid of Russian agents and does not interfere with their work, despite the fact that what the Kremlin is doing is so clearly visible.” This has an impact not only on the small island but on the EU, NATO, and the West in general.