Sunday

1st Aug 2021

Moldova takes action on EU-Russia money laundering

  • Filat (l) with European Commission chief Jose Manuel Barroso. The Moldovan PM has promised to monitor the case (Photo: ec.europa.eu)

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.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

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.

Moldova's anti-graft body told EUobserver in a written note on Wednesday (6 February) that: "A criminal prosecution was started by our institution - the National Anti-Corruption Centre - on money laundering in December 2012. The case is now being investigated. No Moldovan bank accounts have been frozen up to now."

It said it cannot name the suspects because of "presumption of innocence."

It added that Moldova's Prime Minister, Vlad Filat, has "declared he would monitor this case" due to its high-profile nature.

The development is part of an affair with implications for EU-Russia and US-Russia relations.

Hermitage says the Kluyev Group embezzled hundreds of millions of euros from Russian tax authorities and conspired with senior Russian officials to murder its accountant, Sergei Magnitsky, in 2009 after he exposed the scam.

The US has imposed a visa ban on the Russian officials involved, causing outrage in Moscow.

Several national parliaments in the EU have called for similar action.

Authorities in Austria, Cyprus, Estonia, Latvia, Lithuania and Switzerland are also investigating the money trail.

Meanwhile, the state-owned Banca De Economii, Moldova's biggest lender, is already neck-deep in problems.

Its former chief, Gregory Gachkevich, who ran the bank at the time of the Kluyev Group transactions, was last week stopped by police at Chisinau airport because the bank, on his watch, also doled out huge, unsecured loans to offshore firms, putting it at risk of collapse.

For his part, Hermitage Capital chief Bill Browder says the money laundering case poses questions for Moldova's EU aspirations.

Prime Minister Filat is aiming to sign a political association agreement and a free trade pact with the EU in November.

He is also hoping the EU will this year take steps toward a future visa-free deal.

"Moldova is a key transit point for the money laundered from the Magnitsky case, so a genuine investigation will exponentially increase the ability of European law enforcement agencies to make arrests and expose the people behind this network," Browder told this website.

"What the Moldovans do or don't do will be a test of whether they are a reliable partner for further involvement in EU structures," he added.

EU proposes €5mn fines for money laundering

Individual staff should be fined up to €5 million and firms, such as banks, should be fined 10 percent of turnover for flouting anti-money-laundering laws, the EU says.

Opinion

Moldova's new crisis - an opportunity?

A fatal hunting accident has exposed the fault lines in Moldovan politics, but the crisis could be an opportunity to put pro-EU reforms on a more solid footing.

News in Brief

  1. Officials worried at infection-surge on Greek holiday islands
  2. EU calls on online platforms to tackle vaccine hesitancy
  3. Russia accused of falling short on Sputnik V deliveries
  4. France: UK quarantine rules 'discriminatory'
  5. Italy's government reaches deal on judicial reform
  6. EU adopts guidelines to 'climate-proof' infrastructure projects
  7. US backs WHO plan for further Covid-origin investigation
  8. EU to buy 220,000 supplies of potential Covid treatment

Feature

Covid-hit homeless find Xmas relief at Brussels food centre

The Kamiano food distribution centre in Brussels is expecting 20 people every half hour on Christmas Day. For many, Kamiano is also more than that - a support system for those made homeless or impoverished.

Top court finds Hungary and Poland broke EU rules

EU tribunal said Hungary's legislation made it "virtually impossible" to make an asylum application. Restricting access to international protection procedure is a violation of EU rules.

Stakeholders' Highlights

  1. Nordic Council of MinistersNineteen demands by Nordic young people to save biodiversity
  2. Nordic Council of MinistersSustainable public procurement is an effective way to achieve global goals
  3. Nordic Council of MinistersNordic Council enters into formal relations with European Parliament
  4. Nordic Council of MinistersWomen more active in violent extremist circles than first assumed
  5. Nordic Council of MinistersDigitalisation can help us pick up the green pace
  6. Nordic Council of MinistersCOVID19 is a wake-up call in the fight against antibiotic resistance

Latest News

  1. Malta responsible for journalist's death, inquiry finds
  2. Can Greece work with Biden to solve the West Balkans impasse?
  3. EU and UK frustrated at US travel ban extension
  4. Polish judges rally behind EU court ruling
  5. Why 'Fit for 55' isn't fit for purpose
  6. EU hits vaccination target, as Delta variant now dominates
  7. European arms 'displaced over a million people', research finds
  8. Brexit: what is the 'Lugano Convention' and does it matter?

Join EUobserver

Support quality EU news

Join us