Last Yugoslav Bank In Cyprus Folds

by Philip Morton, Investors Offshore.com

26 November 2001

The closure of the Cypriot branch of Astra Banka last week marked the end of a slightly murky chapter in the island's banking history, according to a report in eKathimerini.com.

Astra Banka, formerly known as Karic Banka, was once closely linked with the disgraced Yugoslavian dictator, Slobodan Milosevic, but switched sides after his regime collapsed. Along with Beogradska, formerly the largest Yugoslavian banking unit in Cyprus, it had earned a reputation as a conduit for dirty money, and was blamed by many for earning the offshore jurisdiction the reputation as a centre for money laundering, the Greek paper reported.

Spyros Stavrinakis, a Cyprus Central Bank official, explained that the authorities had revoked the bank's operating license: 'after the National Bank of Yugoslavia informed us they were winding up operations at Astra Banka in Belgrade.' However, despite the allegations hanking over its head, it appears that insolvency, as opposed to proven misdemeanour was what finally did for Astra Banka.

As part of the ongoing investigation into war crimes committed by the former Yugoslavian dictator, UN investigators recently announced that they believe that offshore accounts in Cyprus were key to Milosevic's money laundering activity. It is estimated that around $4 billion was siphoned from state coffers during his time in office.

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