Cyprus is facing mounting scrutiny over its handling of a €14 million VAT debt owed by Blue Ocean, a now-defunct company, allegedly linked to Russian oligarch Roman Abramovich. The firm, operating in the luxury yacht charter sector, was dissolved in 2024 without settling its debt to the state, despite more than a decade of legal proceedings and growing international attention.

Blue Ocean was first flagged by Cypriot tax authorities in 2012 following a VAT assessment for activities between 2005 and 2010. After a partial reduction on appeal, the firm was ordered to pay just over €14 million. Blue Ocean responded with legal challenges that dragged on until March 2024, when the Supreme Constitutional Court upheld the state’s claim. By that point, the company had already ceased operations, had no directors since 2022, and no assets could be located.

Tax Commissioner Sotiris Markides told MPs that Blue Ocean had no registered property, no bank accounts, and no ships under its name. Instead, it operated as a yacht charter intermediary, allegedly using complex offshore arrangements to present private yachts as commercial, avoiding VAT on their use within the EU.

Shocking revelations from today's Committee session revealed that one director of Blue Ocean was simultaneously registered as a director in 540 other companies, and another in 295. MPs concluded this was part of a wider pattern of nameplate directors used to obscure ownership and accountability—common in shell company abuse.

Ownership of Blue Ocean was officially attributed to a trust named The Neptune Trust Settlement. Though Abramovich’s name appears nowhere in company records, MPs Alexandra Attalidou and Irini Charalambidou challenged claims that Cypriot authorities couldn’t trace his involvement, noting that other EU countries had already flagged the link in the context of sanctions enforcement.

The investigation into Blue Ocean was not initiated by Cypriot authorities themselves. As revealed in Parliament, the case only surfaced after foreign countries alerted Nicosia to suspected tax evasion, allegedly involving a pyramid of Abramovich-linked entities operating from Cyprus.

“This is a serious criminal offense,” said MP Attalidou. “And the most important part is that we didn't discover it ourselves—other countries had to tell us.”

MPs criticized the state’s institutional inaction, with Attalidou lamenting how Cyprus enabled oligarchs “to mock the state for years.” Charalambidou called it “another chapter in our history of sin.”

Despite ultimately winning the case in court, Cypriot authorities never pursued compulsory collection measures during the 12-year legal battle. Finance Minister Makis Keravnos confirmed that no such efforts were made, citing advice from the Legal Service, which warned against enforcement before a final judgment.

A 2015 out-of-court settlement proposed by Blue Ocean was rejected, as the tax commissioner had no authority to negotiate unless a miscalculation was proven. After the 2024 judgment, authorities found no recoverable assets. The Anti-Money Laundering Unit (MoKAS) revealed that it had never been informed about the company—despite foreign investigations and widespread media coverage abroad.

Blue Ocean’s deletion from the Companies Registry in 2024 came after the Registrar of Companies withdrew its objection to the strike-off, citing a bulk removal process. Officials admitted that even with an outstanding €14 million tax debt, the system processed the deletion automatically, with no further checks.

Registrar Irini Mylonas-Chrysostomou said the company had not filed officers since 2022 and reiterated that Cypriot law allows any stakeholder to seek a court order to reinstate a company. MPs questioned why no preventive steps were taken, especially given the red flags of multiple director changes and foreign alerts.

Journalist and author Makarios Drousiotis reiterated his allegation that the handling of Blue Ocean was politically influenced. According to his investigation, former President Nicos Anastasiades called then-Finance Minister Haris Georgiades from New York in 2013, asking for the case to be “arranged” in favor of Abramovich. Drousiotis said the information came from a source with firsthand knowledge.

During the Committee hearing, Chair Zacharias Koulias demanded Drousiotis reveal his sources. The journalist declined, saying he trusted the credibility of his informant. MP Attalidou criticized Koulias’ behavior as a breach of institutional limits: “You don’t discredit those asking for accountability—you discredit those protecting the corrupt.”

Georgiades denied any such call took place and noted that international journalists probing the matter also did not conclude there was political interference, only that they were investigating potential impropriety.

Previously, in an official note to Parliament, Attorney General Savvides distanced his office from the collection failure, stating that the Legal Service’s role was confined to handling the appeal and court proceedings. The responsibility for enforcing collection, he emphasized, lay solely with the Tax Department.

Amid mounting pressure, members of Parliament are demanding full accountability—not only for this case but for any others where powerful individuals may have exploited legal loopholes or political connections to avoid paying what they owed to the Republic.

Tax Commissioner Markides acknowledged weaknesses in the legal framework and proposed reforms to prevent last-director resignations and bar legal entities from acting as company directors—measures he said were necessary to improve accountability.

The Audit Committee had called on multiple agencies—including the Finance Ministry, Legal Service, Registrar of Companies, Tax Department, and anti-money laundering unit MOKAS—to provide testimony as the inquiry continues. Observers warn that the outcome of the investigation will serve as a litmus test for Cyprus’ institutional credibility.