Posts Tagged ‘EU Observer’
EU audit on Cyprus money laundering – whitewash in the making?
Auditors on an EU-sponsored mission to see if Cypriot banks launder money for Russian criminals began work last Wednesday (20 March).
The project has slipped out of view amid dramatic talks on Cyprus’ new bailout.
But it is likely to come back with a vengeance when the Dutch, Finnish and German parliaments vote in April on whether the EU should lend Cyprus the €10 billion it needs.
The German government pushed for the probe in the first place because the Social-Democrat opposition threatened to veto a Cypriot rescue on money laundering grounds.
“This is a matter of concern … for public opinion in several of our member states,” European Commission chief Jose Manuel Barroso noted on Monday.
There are two units doing the job.
One is Moneyval, a specialist branch of the Strasbourg-based Council of Europe, whose top man, John Ringguth, a former British prosecutor, was in Nicosia last week to kick things off.
The other is a “private international audit firm” to be hired by Cyprus’ central bank.
The auditors’ terms of reference (what powers they have, which banks they will check) are “confidential,” to use the phrase of one German official.
Moneyval told EUobserver its task is to “focus exclusively on the effectiveness of Customer Due Diligence (CDD) measures in the [Cypriot] banking sector.” In other words, to see if banks check who their customers really are.
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EU and Russia in visa-free talks, despite Magnitsky ‘regret’
EU officials will in Moscow on Thursday (21 March) try to pin down details on a visa-free travel deal, despite “regret” on Russia’s handling of a prominent human rights case.
The European Commission visit, including a tete-a-tete between commission chief Jose Manuel Barroso and Russian leader Vladimir Putin, is part of a good will programme dating back to 1997.
A big point on the agenda is whether to let Russian officials enter the EU without a visa, while relaxing visa rules for Russian businessmen, journalists and students.
“There is now a majority of member states who are in favour of including service passport holders [officials] … If everything goes well, it [a deal] might take place this summer,” a commission official told EUobserver ahead of the trip.
The progress on visas comes despite EU criticism of Putin’s behaviour in the past 18 months – on rigged elections, on his crackdown on NGOs and dissidents and on lack of respect for the rule of law.
In the latest episode, Russian authorities this week closed an investigation into the death in 2009 of anti-corruption activist Sergei Magnitsky, saying there was no crime.
They did it despite evidence he was put in prison, starved of medication and finally beaten to death because he exposed tax fraud by Russian officials.
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Magnitsky relatives: Russian diplomat lied to EU parliament
The mother and widow of Sergei Magnitsky, a Russian anti-corruption activist who died in prison, have accused a Russian diplomat of lying to the European Parliament about his case.
The women – Natalia Magnitskaya and Natalia Zharikova – spoke out in a letter on 25 February to the parliament’s subcommittee on human rights.
They said that Konstantin Dolgov, the Russian foreign ministry’s special envoy on human rights, misled MEPs at a hearing in Brussels on 20 February when he told them that Magnitsky’s own relatives want him to be tried posthumously in order to clear his name.
According to a transcript of the hearing, Dolgov said: “The court cannot close the case unless the relatives, or people who represent the interests of the deceased, make it clear that they are not against the closing of the case. The relatives of Mr Magnitsky made it absolutely clear that they are against closing the case without his acquittal.”
Russian authorities accused Magnitsky, an accountant, of financial fraud after he exposed a scam by tax officials to embezzle hundreds of millions of euros from the Russian treasury.
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EU countries launch joint probe into Magnitsky affair
Financial sleuths from six EU countries are joining forces to see if millions of euros of stolen Russian mafia money was laundered through their banks.
The move comes after the European Commission introduced a request for a joint investigation at a meeting of the so-called Financial Intelligence Units platform (FIU.net) on 7 February.
FIU.net holds regular meetings of anti-corruption experts from EU interior ministries and operates a secure IT network helping them to exchange data.
Cyprus, Estonia, Latvia and Lithuania were already looking into allegations that some of the €230 million euros embezzled by the “Klyuev group,” an organised crime syndicate, from Russian tax authorities in 2007 was wired via Russian and Moldovan banks to companies in their jurisdictions.
Austria and Finland have also carried out probes.
Their prosecutors earlier said there is no evidence that crimes were committed on their territory.
But an EU commission source, who asked to remain anonymous, noted that they are taking part in the 7 February initiative. “There was no negative reaction from any member state … The FIUs are working on the case and there will be a follow-up meeting before the summer,” the contact said.
The Kluyev investigation is a potentially explosive issue in EU-Russia relations.
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Two EU countries shut down money laundering probes
Austria and Finland have said their companies did no wrong in a case of suspected Russia-EU money laundering. But victims of the crime disagree.
The sums involved are not so big – $150,000 in Austria and $199,500 in Finland.
But according to documents obtained by the UK-based investment firm Hermitage Capital, the money is part of the largest white collar crime in Russian history, a money laundering operation involving six EU countries and a plot to murder its Russian accountant, Sergei Magnitsky.
Bank statements sent by Hermitage to Austrian authorities show that in 2008 a Moldovan firm wired $150,000 to Austrian company Colop, which makes rubber stamps.
Documents sent by Hermitage to Finland show that the same year a second Moldovan firm made a payment to Finnish fur supplier, Saga Furs.
The money originated in the embezzlement of $230 million from Russian tax authorities by an organised crime group, the so-called Kluyev group, and went through a maze of Russian and Moldovan banks before coming to the EU.
When Magnitsky exposed the fraud, he was jailed and died in suspicious circumstances while in custody.
But for his part, Christian Hubmer, a spokesman for the local prosecutor in Linz, Austria, the home of Colop, says his people can find no record of the dodgy payment.
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Moldova takes action on EU-Russia money laundering
Moldova has launched criminal proceedings in a money laundering case involving its biggest bank, the Russian mafia and six EU countries.
The move comes after a UK-based investment firm, Hermitage Capital, filed a complaint with the Moldovan prosecutor in June.
Documents obtained by Hermitage indicate that a Russian organised crime group – dubbed the Kluyev Group – in 2008 wired $53 million of stolen money from an account in Russia’s Bank Krainiy Sever to two accounts in Moldova’s Banca de Economii.
They also indicate that Banca de Economii later wired the money to multiple accounts in Austria, Cyprus, Estonia, Finland, Latvia and Lithuania, as well as Switzerland and Hong Kong.
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EU: Magnitsky acquittal will harm Russia’s reputation
Russia’s acquittal of the only man charged over the death of Sergei Magnitsky will harm its international reputation, the EU has said.
Magnitsky, an accountant who in 2007 exposed the fact that Russian officials and the mafia were stealing hundreds of millions of euros of tax money, later died in jail after being refused medical treatment for pancreatitis and after being beaten by his guards.
His case became a cause celebre when the US last year passed a law in his name that will see up to 60 Russian officials banned from getting US visas.
But in what amounts to an extraordinary u-turn for the Russian legal system, a Moscow judge on 28 December said there is no evidence that Dmitry Kratov – the former medical chief at the Butyrka jail, where Magnitsky died – helped caused his death by negligence.
A few days earlier the prosecutor himself called for the acquittal despite previously building a case against Kratov.
The sudden change came after Russian leader Vladimir Putin claimed on TV that Magnitsky died of natural causes.
For Magnitsky’s former employer, the UK-based investment fund, Hermitage Capital, the developments show that his killers enjoy protection at the highest level of the Russian state.
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Visas, human rights on EU-Russia agenda this WEEK
The signature of a small-time visa deal is likely to form the centrepiece of Russian leader Vladimir Putin’s visit to Brussels.
The so-called upgraded visa facilitation agreement (VFA) is designed to reduce paperwork and delays for some classes of Russian citizens, such as officials, academics and businessmen.
The EU foreign service told this website the pact has been “held back” by Russia’s last minute request to allow visa-free travel for its officials “which we have not been able to agree.” But it added: “We should sign the upgraded VFA as it stands now.”
What Russia really wants is visa-free travel for everybody.
The EU recently sent two delegations to Russia to see what it is doing to meet technical standards on issues such as border control. But the foreign service noted that “information gathering will need to be followed by reforms” and that the EU is not yet ready to start negotiations on a visa-free pact.
In one way, the real centrepiece will be Putin’s presence in the EU capital.
He will attend a dinner with top EU officials Herman Van Rompuy and Jose Manuel Barroso on Thursday (20 December) and a working meeting on Friday.
The last time he came, in February 2011, he created a celebrity buzz in the European Commission, with lots of EU officials who do not work on Russia crowding into the commission’s press room to see him up close.
Putin and Barroso at the time clashed on EU laws designed to limit the power of Russian energy champion Gazprom.
In the meantime, Barroso has opened a competition probe into alleged Gazprom price-fixing which could see it fined billions of euros and forced to renegotiate contracts.
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Cyprus launches probe into Russian mafia money
Cyprus has opened an investigation into evidence that stolen Russian tax money linked to the murder of Sergei Magnitsky was laundered through its banks.
Mokas, its anti-money-laundering unit, in an email to EUobserver on Thursday (13 December), said: “At this point … in Cyprus there is an open investigation on this matter.” It noted: “Mokas is conducting the investigation, which functions within the office of the attorney general.”
It added that the probe already began some time ago.
But it went ahead with some reluctance.
Magnitsky, a 37-year-old Russian accountant, was killed in jail in 2009 after he exposed a huge tax embezzlement by a criminal gang – “the Klyuev group” – involving high ranking officials in the Russian interior ministry and its internal intelligence service, the FSB.
Lawyers for his former employer, the UK-based Hermitage Capital investment fund, submitted evidence to Cyprus’ attorney general in July.
Its papers, including copies of financial transfers – seen by this website – show that $31 million of the tax money was moved out of Russia using five Cypriot banks: Alpha Bank, Cyprus Popular Bank, FBME Bank, Privatbank International and Komercbanka.
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