Thursday

26th May 2022

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

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

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.

Orbán's new state of emergency under fire

Hungary's premier Viktor Orbán declared a state of emergency due to the war in neighbouring Ukraine hours after pushing a constitutional amendment through parliament, where two-thirds of MPs are controlled by his Fidesz party, allowing his government special powers.

Opinion

When Reagan met Gorbachev — a history lesson for Putin

Neither Reagan nor Gorbachev achieved their goal at the famous Reykjavik summit of 1986. Despite that fact there are lessons that current leaders — particularly Vladimir Putin — could adopt from these two iconic leaders.

News in Brief

  1. Dutch journalists sue EU over banned Russia TV channels
  2. EU holding €23bn of Russian bank reserves
  3. Russia speeds up passport process in occupied Ukraine
  4. Palestinian civil society denounce Metsola's Israel visit
  5. Johnson refuses to resign after Downing Street parties report
  6. EU border police has over 2,000 agents deployed
  7. Dutch tax authorities to admit to institutional racism
  8. Rutte calls for EU pension and labour reforms

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic delegation visits Nordic Bridges in Canada
  2. Nordic Council of MinistersClear to proceed - green shipping corridors in the Nordic Region
  3. Nordic Council of MinistersNordic ministers agree on international climate commitments
  4. UNESDA - SOFT DRINKS EUROPEEfficient waste collection schemes, closed-loop recycling and access to recycled content are crucial to transition to a circular economy in Europe
  5. UiPathNo digital future for the EU without Intelligent Automation? Online briefing Link

Latest News

  1. EU summit will be 'unwavering' on arms for Ukraine
  2. Orbán's new state of emergency under fire
  3. EU parliament prevaricates on barring Russian lobbyists
  4. Ukraine lawyer enlists EU watchdog against Russian oil
  5. Right of Reply: Hungarian government
  6. When Reagan met Gorbachev — a history lesson for Putin
  7. Orbán oil veto to deface EU summit on Ukraine
  8. France aims for EU minimum-tax deal in June

Join EUobserver

Support quality EU news

Join us