Tuesday

22nd Oct 2019

Investigation

EU countries launch joint probe into Magnitsky affair

  • Sikorski: 'Corruption can only be rooted out when there is leadership from the top' (Photo: Images_of_Money)

Financial sleuths from six EU countries are joining forces to see if millions of euros of Russian mafia money was laundered through their banks.

The move comes after the European Commission introduced a request for a joint investigation at a meeting of the so-called Financial Intelligence Units platform (FIU.net) on 7 February.

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

FIU.net holds regular meetings of anti-corruption experts from EU interior ministries and operates a secure IT network helping them to exchange data.

Cyprus, Estonia, Latvia and Lithuania were already looking into allegations that some of the €230 million embezzled by the "Klyuev group," an organised crime syndicate, from Russian tax authorities in 2007 was wired via Russian and Moldovan banks to firms in their jurisdictions.

Austria and Finland have also carried out probes.

Their prosecutors earlier said there is no evidence crimes were committed on their territories.

But an EU commission source, who asked to remain anonymous, noted that they are taking part in the 7 February initiative. "There was no negative reaction from any member state … The FIUs are working on the case and there will be a follow-up meeting before the summer," the contact said.

The Kluyev investigation is a potentially explosive issue in EU-Russia relations.

Prompting outrage by Russian leader Vladimir Putin, the US last year imposed sanctions on Russian officials and gangsters said to have conspired to murder a Russian accountant, Sergei Magnitsky, who exposed the tax scam.

EU foreign affairs chief Catherine Ashton has so far ignored calls by MEPs to consider similar measures.

But her colleague, home affairs commissioner Cecilia Malmstrom, has been raising the case informally at meetings of EU interior ministers, stirring wider interest.

For his part, Polish foreign minister Radek Sikorski on Thursday (21 February) called for "leadership from the top" in handling the affair.

When asked by EUobserver at an event in the European Parliament if EU countries should take joint action on the money laundering probe, he said: "Clearly, it's a matter for international collaboration to purge corruption wherever it rears its ugly head. Corruption can only be rooted out when there is leadership from the top. So I believe in co-operation so that we oust the guilty parties and return the money, not just in this case but in all cases, to its rightful owners."

Sikorski spoke following a visit to Moldova earlier in the week.

Moldova's National Anti-Corruption Centre (NAC) in December also launched criminal proceedings into the case.

But there is a question mark on whether NAC chief Viorel Chetraru will do a proper job.

Chetraru has been exposed in Moldovan media as the owner of a luxury property worth up to €300,000 - well out of proportion with his salary - built on land seized by his agency in 2004.

He is also a personal associate of Gregory Gachkevich, the former head of Moldova's Banca De Economii, said to have wired the Russia mafia money on his watch.

Moldovan Prime Minister Vlad Filat recently launched a purge on corruption despite the fact it threatens to destroy his coalition with the Democratic Party, some of whose people are at the centre of allegations.

He also wrote a letter to Chetraru telling him to take action on the Kluyev probe after Chetraru sat on evidence for six months.

With Moldova in line to initial a political association pact with the EU in November, Poland's Radek Sikorski added on Thursday: "We regard the standards on fighting corruption as one of the strong indicators of whether a country wants to respect the spirit of association agreements and get closer to Europe."

Meanwhile, for Bill Browder - the CEO of Hermitage Capital, a UK-based hedge fund which used to employ Magnitsky - the EU's joint police and judicial bodies in The Hague, Europol and Eurojust, should also get involved.

"The key to freezing the proceeds and prosecuting the criminals is by having international law enforcement co-operation through Europol, Eurojust and the FIUs," he told this website.

EUobserver investigative reports

"The Magnitsky Affair" is the latest in a series of EUobserver investigative reports. It looks at what the EU is really willing to do to confront Russian human rights abuses on its doorstep.

News in Brief

  1. Four businessmen charged in Slovak journalist murder
  2. Erdogan accuses EU of 'standing by terrorists' in Syria
  3. Migrants riot in Maltese camp
  4. Spanish PM refuses dialogue with Catalonia president
  5. Putin: Russia will help Africa without 'conditions'
  6. Almost 200 arrests in Catalonia independence protests
  7. Report: Russian hackers used Iranian cover to attack UK
  8. Next EU economy chief calls for looser budget policies

Agenda

Crunch Brexit vote in UK This WEEK

The future of Brexit continues to hang in the balance this week, with a crunch vote in Westminster on Saturday.

EU parliament quietly hoards visitors' wi-fi data

The European Parliament is retaining the data of everyone who uses their wi-fi network, including journalists and visitors, and providing access to national authorities in case of investigations.

Stakeholders' Highlights

  1. UNESDAUNESDA welcomes Nicholas Hodac as new Director General
  2. Nordic Council of MinistersBrussels welcomes Nordic culture
  3. UNESDAUNESDA appoints Nicholas Hodac as Director General
  4. UNESDASoft drinks industry co-signs Circular Plastics Alliance Declaration
  5. FEANIEngineers Europe Advisory Group: Building the engineers of the future
  6. Nordic Council of MinistersNew programme studies infectious diseases and antibiotic resistance
  7. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  8. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  9. Nordic Council of MinistersNo evidence that social media are harmful to young people
  10. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  11. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  12. Nordic Council of MinistersEducation gets refugees into work

Latest News

  1. Macron breaks Balkans promise in quest for EU dominance
  2. Snap elections in North Macedonia after EU rejection
  3. UK opposition MPs attack new Brexit deal
  4. Deep divisions on display over post-Brexit EU budget
  5. Juncker: 'Historic mistake' against Balkan EU hopefuls
  6. EU leaders spent just 12 minutes on climate
  7. Crunch Brexit vote in UK This WEEK
  8. EU envoy sheds light on weird US diplomacy

Stakeholders' Highlights

  1. Counter BalanceSign the petition to help reform the EU’s Bank
  2. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  3. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  4. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  5. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  6. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  7. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  8. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  9. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  10. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  11. Nordic Council of MinistersNordic commitment to driving global gender equality
  12. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan

Join EUobserver

Support quality EU news

Join us