Saturday

29th Jul 2017

Dirty Russian money buying influence in EU, MEPs warn

  • Germany's Deutsche Bank stands accused of helping Russian clients to move up to $10 billion in shady funds (Photo: Reuters)

MEPs from the main groups in the European Parliament have raised the alarm over illicit Russian money in Europe and its use to influence European politics.

They said in a letter to EU foreign relations chief Federica Mogherini that “over $200 million [€189mn] of illicit proceeds” from a Russian tax fraud “was laundered through Europe” and that “there is information that shows that the money has been used to influence European politics, media, and civil society to prevent consequences for Russian human rights violators”.

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

They also said the $200 million was “just the tip of the iceberg” and that the same group behind that fraud “is linked to similar crimes worth over $1 billion”.

The tax fraud was first uncovered by Sergei Magnitsky, a Russian auditor who later died in prison in 2009.

The larger, $1 billion scam, which involved fraudulent VAT refunds by the same group of Russian tax officials and mafia enforcers, was documented by Novaya Gazeta, a Russian newspaper, and by the OCCRP, a club of investigative reporters in eastern Europe.

Bill Browder, a British hedge fund manager who was Magnitsky’s former employer, amassed evidence showing that the funds were laundered in several EU banks.

His campaign has prompted ongoing investigations by authorities in the US, Switzerland, France, Luxembourg, Cyprus, Estonia, Latvia, Moldova, Lithuania, and Poland.

The subsequent so-called Panama Papers leak also showed that $800,000 of the stolen Russian taxpayers’ money was funnelled to Russian leader Vladimir Putin’s friend, a cellist named Sergei Roldugin.

The MEPs’ letter to Mogherini on “the laundering of proceeds of Russian organised crime in Europe” said EU states should impose visa bans and asset freezes on 32 Russians implicated in the Magnitsky affair.

The letter, dated 5 December, was made public on Tuesday (13 December).

Mogherini’s office told EUobserver that “we got the letter and a response will be sent in due course”.

The MEPs’ warning comes ahead of elections next year in France and Germany, where anti-EU parties, such as the National Front in France and the AfD in Germany, both of which stand accused of receiving Russian money, aim to run for power.

British and German spy chiefs have warned that Russia was trying to sway the outcome of EU votes the same way that it did the US elections.

The EU parliament, in a recent report, also said that Russia’s anti-EU propaganda campaign was a threat to democracy.

'Destructive steps'

Mogherini’s foreign service, which has resisted previous calls to list the Magnitsky affair culprits, declined to say whether it shared those concerns when asked by EUobserver on Tuesday.

The MEPs’ letter accused the EU of having done little to improve the human rights situation in Russia.

It said Mogherini’s earlier pledges to put pressure on Moscow over rights abuses had “failed” and that further inaction “shows a weakness of Europe and encourages Vladimir Putin to take more provocative and destructive steps”.

It was signed by 51 MEPs from the centre-right EPP group, the centre-left S&D group, the liberal Alde group, the Greens, and the right-wing ECR group.

Signatories included the Green group’s German co-leader Rebecca Harms and the ECR’s Anna Fotyga, a former Polish foreign minister who wrote the parliament’s Russian propaganda report.

Browder’s campaign has led the US to blacklist corrupt Russian officials and prompted Estonia, last week, to also adopt a US-type law on bans of corrupt foreigners.

Sanctions talks

“It’s time for the European Union to do its part by enacting the will of its members to stop criminals with blood on their hands from reaping the benefits of Europe”, Browder said.

The EU has imposed a separate set of sanctions on Russia over its invasion of Ukraine.

French president Francois Hollande recently said in Berlin that he agreed with German chancellor Angela Merkel that the duration of economic sanctions should be extended for a further six months in January.

Italy had been critical of the measures.

Russia’s support for the Syrian regime’s massacre of civilians in Aleppo showed signs of having alienated its friends in Rome, however.

Paolo Gentiloni, the incoming Italian prime minister, said on Tuesday that the Syria crisis was coming to “define relations between the EU and Russia” and that EU leaders would discuss the situation at their summit later this week.

Interview

Former spy chiefs call for EU-US intelligence hub

Europe and the US need an "intelligence hub” to fight terrorism, with grand ideas on EU military integration unlikely to bear fruit, Germany’s former spy chief has said.

Opinion

No joke: Russian propaganda poses EU threat

With the French and German elections at risk of Kremlin interference, it's time for the EU to start treating Russian propaganda as a serious threat.

Opinion

Uncertainties multiply in EU's Russia policy

With Trump in the White House, the West’s Russia policy might substantially change, while Europe’s eastern policy is more uncertain than ever.

News in Brief

  1. EU citizens will need registration to enter UK in Brexit transition
  2. Italy weighs up sending navy into Libyan waters
  3. Swedish PM fights for survival amid IT scandal
  4. Poland's Kaczynski vows to continue judicial reform
  5. Werner Hoyer re-appointed as EU investment bank chief
  6. Spanish PM denies knowledge of party corruption
  7. France 'routinely' abuses migrants, says NGO
  8. Swedish government rocked by data scandal

Stakeholders' Highlights

  1. UNICEFReport: Children on the Move From Africa Do Not First Aim to Go to Europe
  2. Counter BalanceOut for Summer, Ep. 2: EIB Promoting Development in Egypt - At What Cost?
  3. EU2017EELocal Leaders Push for Local and Regional Targets to Address Climate Change
  4. European Healthy Lifestyle AllianceMore Women Than Men Have Died From Heart Disease in Past 30 Years
  5. European Jewish CongressJean-Marie Le Pen Faces Trial for Oven Comments About Jewish Singer
  6. ACCAAnnounces Belt & Road Research at Shanghai Conference
  7. ECPAFood waste in the field can double without crop protection. #WithOrWithout #pesticides
  8. EU2017EEEstonia Allocates €1 Million to Alleviate Migratory Pressure From Libya in Italy
  9. Dialogue PlatformFethullah Gulen's Message on the Anniversary of the Coup Attempt in Turkey
  10. Martens CentreWeeding out Fake News: An Approach to Social Media Regulation
  11. European Jewish CongressEJC Concerned by Normalisation of Antisemitic Tropes in Hungary
  12. Counter BalanceOut for Summer Ep. 1: How the EIB Sweeps a Development Fiasco Under the Rug

Latest News

  1. UK and EU stuck on 'philosophy' of Brexit bill
  2. Europe needs a policy for peace in Nagorno-Karabakh
  3. Spain's PM appeals to court over Catalan independence
  4. Senate backs Russia sanctions, setting scene for EU clash
  5. France and Italy quarrel over shipyard and Libya
  6. Corbyn re-opens Labour's single market wound
  7. Visegrad lobby makes food quality an EU issue
  8. EU court could dismiss national borders in cyberspace

Stakeholders' Highlights

  1. CESICESI to Participate in Sectoral Social Dialogue Committee on Postal Services
  2. ILGA-EuropeMalta Keeps on Rocking: Marriage Equality on Its Way
  3. European Friends of ArmeniaEuFoA Director and MEPs Comment on the Recent Conflict Escalation in Nagorno-Karabakh
  4. EU2017EEEstonian Presidency Kicks off Youth Programme With Coding Summer School
  5. EPSUEP Support for Corporate Tax Transparency Principle Unlikely to Pass Reality Check
  6. Counter BalanceEuropean Parliament Improves the External Investment Plan but Significant Challenges Ahead
  7. EU2017EEPM Ratas: EU Is Not Only an Idea for the 500mn People in the Bloc, It Is Their Daily Reality
  8. Nordic Council of MinistersCloser Energy Co-Operation Keeps Nordic Region on Top in Green Energy
  9. ILGA-EuropeGermany Finally Says Ja - Bundestag Votes for Marriage Equality!
  10. EPSUJapanese and European Public Sector Unions Slam JEFTA
  11. World VisionEU, Young Leaders and Civil Society Join Forces to End Violence Against Girls
  12. UNICEFNarrowing the Gaps: The Power of Investing in the Health of the Poorest Children