Tuesday

22nd May 2018

Cyprus enforces Russian mafia law

  • The Cypriot president (r) next to Russian leader Vladimir Putin (c) at the WWII parade (Photo: kremlin.ru)

Cyprus is helping Russian officials to hush up a mafia scam and to hunt down the people who exposed it.

Its justice ministry, last week, invited Russian sleuths to conduct a joint raid with Cypriot police on the offices, in Nicosia, of lawyers acting on behalf of Bill Browder.

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Browder is the former employer of Sergei Magnitsky, a Russian auditor who, in 2007, uncovered a huge tax scam by Russian officials acting in league with an organised crime syndicate, the Kluyev Group.

When Magnitsky went public, his office was raided, he was jailed, and later killed in prison. The stolen money was never recovered.

Browder has campaigned for EU sanctions against the killers and for member states to seize the loot, which was, in part, laundered in European banks.

Back in 2012, he gave 133 pages of documents, seen by this website, to Cyprus' anti-corruption agency, Mokas, showing how the Kluyev gang moved $31 million of the stolen money out of Russia via Cypriot banks: Alpha Bank; Cyprus Popular Bank; FBME Bank; Privatbank International; and Komercbanka.

Mokas never recovered the funds.

Instead, in an echo of events in Moscow in 2007, Cypriot police, on Friday (29 November), together with two Russian investigators, Sergei Petryashov and Artem Ranchenkov, seized Hermitage Fund documents and interrogated its lawyers.

EUobserver contacted the Cypriot foreign ministry for a comment on Monday.

It said on Tuesday afternoon: “Your questions have been forwarded to the competent authorities … and we will forward to you their reply when we have it.” The reply never came.

Cyprus granted the request for legal assistance in relation to Russia’s prosecution of Magnitsky, posthumously, and Browder, in absentia, for fraud.

The case has been ridiculed, not least by EU institutions, as an attempt to conceal the original tax scam.

The EU foreign service, in 2013, spoke of “unconvicing evidence” and called it “a disturbing message to those who fight corruption in Russia.”

The UK, by contrast, denied similar requests for legal assistance. Other EU states, such as Luxembourg, also froze stolen funds.

Friend of Russia

Cyprus is often described by EU diplomats as a “friend of Russia.”

Also in November, it extradited to Russia Natalia Konovalova, a former employee of Yukos Oil, an energy firm seized by the Kremlin for political reasons.

The Cypriot president, Nicos Anastasiades was the only EU leader at Russia’s WWII parade in Moscow in May.

He says the EU should reconsider Russia sanctions and has let Russian warships use Cypriot ports.

Meanwhile, Cyprus’ appetite for dodgy Russian money was exposed by Germany during the 2012 talks on its EU bailout.

Germany's BND intelligence service in a report, leaked to German media, said Russian oligarchs and organised crime groups held deposits worth $26 billion (€25 billion) in Cypriot banks.

The figure is roughly equivalent to Cyprus’ annual GDP.

Cyprus praises Russia, lets in warships

The Cypriot president has, on a visit to Moscow, showcased his country’s economic dependence on Russia and the threat to EU and US unity on sanctions.

Cyprus in spotlight on Russia money laundering

Cyprus’ failure to go after Russian mafia money in its banks indicates it's paying no more than “lip service” to international money laundering laws, a Dutch MP has said.

Cyprus helping Russia to roll back US sanctions

Browder, a British activist who inspired a US law on freezing assets of Russian human rights abusers, said he was "terrified" of going to Cyprus because it would extradite him to Russia.

Opinion

Linking EU funds to 'rule of law' is innovative - but vague

Defining what constitutes 'rule of law' violations may be more difficult than the EU Commission proposes, as it tries to link cohesion funds in east Europe to judicial independence. A key question will be who is to 'judge' those judges?

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