Cyprus launches probe into Russian mafia money

Hermitage has has flight records showing visits to Cyprus by the Klyuev gang at key moments in the scam .

Πηγή: EUobserver
By ANDREW RETTMAN
Dec 14 2012

BRUSSELS - 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.

They also show that Dmitry Klyuev, the alleged ringleader, owns a Cypriot-based firm called Fungamico, has an account at the Bank of Cyprus and visited Cyprus with his associates at the time the money went missing.

But Cyprus in October said it must check with Moscow to see if the money was really stolen before it could move ahead.

The Magnitsky probe is unwelcome on many fronts.

No-questions-asked banking services for Russian clients are an important source of income for Cyprus, where Russians have stashed up to $26 billion, according to the German intelligence service, the BND.

The Magnitsky case also raises the question if Cyprus is a fit place for EU taxpayers to insert €11 billion of bailout money, in a deal currently in discussion with EU institutions and the International Monetary Fund.

Nikos Christodoulides, a Cypriot EU presidency spokesman, told EUobserver that even if the Russian mafia did use its banks "it does not mean there are problems with all the other [Russian] accounts."

He added that "the two issues [the bailout and money-laundering] are not related at all."

Another Cypriot spokesman, Costas Yennaris, added: "They [EU lenders] have focused more on the management of the banks than on the content of their work [in the bailout talks]."

For some European politicians, the issues should be linked.

Dominic Raab, a British Conservative Party MP, is one of four national parliamentarians - also from Finland, Germany and the Netherlands - who have urged their administrations to look into the matter.

"Britain should make every effort to ensure that its ... funds are not being used to bail out any country that cannot or will not prevent its financial system from being misused by the Russian mafia," Raab wrote to British finance minister George Osborne on 21 November.

Meanwhile, the news the EU presidency country has promised to lift the lid on Magnitsky comes at a tricky moment in EU-Russia diplomacy.

Russian leader Vladimir Putin is in Brussels on 21 December for an EU-Russia summit.

Magnitsky was already in the air because US lawmakers on 6 December passed a law forcing the state department to put a visa ban and asset freeze on Russian officials implicated in the affair.

If US President Barack Obama signs the bill in the coming days, as expected, it is likely to trigger Russian retaliation and to put extra pressure on the EU to do something as well.

For its part, the EU foreign service shows no sign of using its powers to propose EU-level sanctions, however.

Its spokeswoman, Maja Kocijancic, told this website also on Thursday that Magnitsky will not be a big feature of the Putin meeting because the case was already discussed by low-level diplomats at a "human rights dialogue" on 7 December.

She said Russia's own investigation into his death has been "very limited ... not adequate."

She also said Brussels has "noted" that the European Parliament and parliaments in the Netherlands, Sweden and the UK have called for EU action in non-binding resolutions.

But she added: "A decision on restrictive measures would be for member states to take in unanimity."

Russia bans entry to unnamed US officials in response to US blacklist tied to Magnitsky death

Sergei Magnitsky

Πηγή: Washington Post
By AP
Oct 22 2011

MOSCOW — Russia has banned entry to U.S. officials allegedly involved in killings and abductions, a strong response to Washington’s blacklisting of Russian officials involved in the prison death of a whistleblower.

The Foreign Ministry said in a statement Saturday it was blacklisting unspecified U.S. officials it claims were involved in the abductions of alleged terrorism suspects, the torture of inmates at Guantanamo prison, the killings of civilians in Afghanistan and Iraq, and the abductions or abuse of Russians in the United States. It did not say how many U.S. officials were affected.

The action was in response to the U.S. State Department’s decision in July to ban entry to dozens of unidentified Russian officials allegedly involved in the death of lawyer Sergei Magnitsky.

The list supposedly includes some 60 officials, including relatively senior figures in the Russian Interior Ministry, as well as judges, prosecutors and prison officials that were named by Magnitsky’s colleagues.

Magnitsky died in 2009 at age 37, when the pancreatitis he developed in jail was left untreated. He spent almost a year in pretrial detention on charges of tax evasion that were filed by the same police officials he had accused of illegally taking over the assets of an investment fund he worked for and fraudulently using them to reclaim $230 million in taxes from the state.

Although Russian President Dmitry Medvedev fired several top prison officials over Magnitsky’s death and has pledged a full investigation, no one has been prosecuted in the case.

The Russian Foreign Ministry said it will expand the list of banned officials if the U.S. keeps pushing for the prosecution of those involved in Magnitsky’s death.

“We’re talking about an attempt of direct pressure on our government institutions that has nothing to do with neither human rights protection or an intention to find out the circumstances of what happened,” the Russian statement said.

In December, the European Parliament urged the EU’s 27 nations to freeze assets of the officials involved in Magnitsky’s death in a nonbinding resolution.