Tuesday

22nd Jan 2019

Cyprus defends reputation on Russia money laundering

  • Anastasiades (l) and Putin (r) spoke about Browder in Moscow (Photo: kremlin.ru)

Cyprus has defended its reputation on money laundering after a British MP called for its international rating to be downgraded.

The Cypriot justice ministry said on Friday (27 October) that Moneyval, a European rating body, had "established … that the Republic of Cyprus was in full compliance with international measures".

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

  • Browder (r) in the European Parliament with Magnitsky's son (l) (Photo: europarl.europa.eu)

It said allegations that it sat on evidence in a high-level Russian case and stonewalled French prosecutors were "completely groundless".

"The investigation [into the Russian case] on the part of Cypriot authorities is open and ongoing" and "cooperation with French authorities ... is underway without any problems," it said.

It spoke out after a British MP said Moneyval should cut Cyprus' rating from "largely compliant" to "non compliant".

The MP, Ian Austin, from the opposition Labour Party, urged the British treasury to recommend the step.

His letter, dated 13 October, said he had "grave concerns about the Cypriot government's complicity in facilitating Russian organised crime and money-laundering."

He said it had been "actively involved in the obstruction of an international money-laundering investigation" into a €195-million fraud against the Russian tax office.

He also said French prosecutors had requested help from Cyprus, but the Cypriot justice ministry "blocked this request for over two years with the result that the documents were supplied only last week".

Cyprus rating

The British treasury said it was looking into the complaint.

Moneyval, a branch of the Council of Europe in Strasbourg, is to evaluate Cyprus in early 2019, with preparations to start next year.

But Jaime Rodriguez, a spokesman, told EUobserver it would be difficult to speak of "downgrades" because Moneyval had adopted new ratings since its previous Cyprus assessments.

"Technically speaking, there is no such thing as 'downgrading' from previous ratings, as all ratings will be based on revised standards," he said.

The €195-million Russia fraud was exposed by Sergei Magnitsky, an accountant, who was subsequently jailed and killed.

Some of the money was moved out of Russia via Cyprus into other EU states. It paid for real estate, art, and yachts. It also trickled back, via shell firms, to Russian president Vladimir Putin's inner circle.

Bill Browder, Magnitsky's former employer, who has campaigned for EU sanctions in his name, gave Cyprus 133 pages of evidence on the case four years ago.

Bank extracts, seen by this website, showed that €26 million of the money was moved via Cypriot banks.

Flight records also showed that Russian suspects frequently visited the island.

Russian crime

Browder told EUobserver on Friday that Cypriot authorities sat on it because they were "unwilling to go after the Russian fraudsters who planned this crime in Cyprus".

He said Paris had had to appeal to Eurojust, an EU judicial agency, to get Nicosia to cooperate.

He also said Cyprus was helping Russia to go after him instead.

Browder, a British former hedge fund manager in Russia, is fighting a court battle to stop Cyprus from inviting Russian interrogators to question his lawyers.

The Russian mission is meant to dig up material for Russia's claim that Magnitsky stole the money and that Browder had him killed.

Putin personally raised the issue with Cypriot president Nicos Anastasiades on his visit to Moscow on Tuesday.

The Russian leader said he looked forward to a decision that would allow the two countries to cooperate on the "multimillionaire Bill Browder".

Anastasiades said the matter lay with the court, which holds a hearing on 5 November.

Offshore 'colony'

Cyprus is a financial centre that hosts more than 14,000 offshore firms, at least 12,000 of which have no physical presence on the island.

Russian clients love it for its favourable tax regime and as a holiday spot.

It also has a weak record of going after fraudsters - Moneyval's last Cyprus review, in 2011, said it had convicted just two people and issued only nine orders to freeze accounts since 2005.

Cyprus already let Russian interrogators question Browder's lawyers on a previous occasion, even though France and the UK, as well as Interpol, the international police agency, denied such Russian requests on grounds they were politically motivated.

Browder said events had shown that Russia's jurisdiction now extended into the EU country.

The lack of rule of law in Russia posed a threat to investors in both places, he said.

"Cyprus has unfortunately become a de facto colony of Russia and that makes its business climate dangerous and unpredictable," he 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.

EU monitoring Cyprus passport sales

The European Commission has said it is in a "dialogue" with Cyprus amid concerns on loopholes in its passport sale scheme.

Cyprus' deja-vu choice for president

Greek Cypriots will elect their president on Sunday (4 February), facing the same choice as at the previous vote five years ago: incumbent Nikos Anastasiades against Stavros Malas.

News in Brief

  1. EU hits Mastercard with €570m fine
  2. Romanian minister prepares to cancel corruption cases
  3. Sefcovic: no gas supply problems this winter
  4. Report: Commission warning on passport-sale schemes
  5. France summons Italian ambassador over colonial remark
  6. May U-turn on fee for EU nationals in UK
  7. French data watchdog gives Google €50m fine
  8. EU hits Russians with sanctions over Salisbury attack

Stakeholders' Highlights

  1. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  2. Nordic Council of MinistersSeminar on disability and user involvement
  3. Nordic Council of MinistersInternational appetite for Nordic food policies
  4. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  5. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups
  6. Nordic Council of MinistersTheresa May: “We will not be turning our backs on the Nordic region”
  7. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  8. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  9. Nordic Council of MinistersState of the Nordic Region presented in Brussels
  10. Nordic Council of MinistersThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  11. Nordic Council of MinistersThe Nordic gender effect goes international
  12. Nordic Council of MinistersPaula Lehtomaki from Finland elected as the Council's first female Secretary General

Latest News

  1. France and Germany hope to revive EU with Aachen treaty
  2. May pushes defeated Brexit deal, offers no Plan B
  3. European Parliament targets 'fake' political groups
  4. What is fate of non-euro EU states after Brexit?
  5. Turkish NBA star takes on Erdogan
  6. 'Meme ban' still on table in EU copyright bill, says MEP
  7. Brexit power grab by MPs hangs over May's 'Plan B'
  8. Polish mayor's funeral marred by Tusk TV dispute

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic design sets the stage at COP24, running a competition for sustainable chairs
  2. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  3. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  4. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  5. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  6. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  7. International Partnership for Human RightsCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  8. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  9. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  10. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  11. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  12. Mission of China to the EUChina: Work Together for a Better Globalisation

Join EUobserver

Support quality EU news

Join us