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12th Apr 2024

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.

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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.

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