Posts Tagged ‘EU Observer’

20
June 2013

Latvia fines bank over Magnitsky money laundering

EU Observer

Latvia’s Financial and Capital Market Commission on Tuesday (18 June) said it has imposed a fine of 100,000 lats (€142,543) – the maximum fine under Latvian law – on a bank involved in laundering over €170 million stolen from the Russian government.

The name of the bank was not made public.

The money laundering scheme was revealed by Sergei Magnitsky, a lawyer who worked for Hermitage Capital Management, an investment fund specialising in Russian assets.

He died in a Russian jail in 2009 after being beaten and denied medical care.

Hermitage filed a complaint in July 2012 to Latvian authorities naming six Latvian banks that allegedly laundered funds from the illegal tax refund exposed by Magnitsky.

The Magnitsky case has caused international uproar, with the US in April imposing a travel ban on 18 Russian officials linked to the affair.

Latvia is due to adopt the euro in January 2014 and is under increased pressure from the EU to clean up its act on money laundering, especially as Russian capital may have moved from bailed-out Cyprus to the former Soviet republic.

Around half of the €17 billion deposited in Latvian banks is owned by foreigners.

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11
June 2013

Russia blames EU for airline data fiasco

EU Observer

Russia and the EU are continuing to trade blame in a clash on air passenger data, as airlines count down days to deadline.

If nothing changes in the next 20 days, EU airlines will from 1 July be forced to hand over passengers’ personal data, such as credit card details, to Russian security services under a new law.

If they do not comply, Russia might ground the 53,000-or-so European flights which transit over Siberia to Asia each year.

But if they do comply, they will foul of EU data privacy rules.

The two sides are to hold expert-level meetings in the run-up to July after top-level talks at an EU-Russia summit last week went nowhere.

Meanwhile, Russia is blaming EU officials for the problem.

Kirill Ivanov, a spokesman for Russia’s EU ambassador, told EUobserver on Tuesday (11 June) that the European Commission fell asleep on the dossier.

He noted that Moscow published the full text of its new PNR (Passenger Name Record) law in September last year even if it did not send a special notice to Brussels. “These measures can hardly be qualified as unexpected … the EU had sufficient time to prepare for this document entering into force,” he said.

He pointed out Brussels also failed to give Moscow special notice of its recent law on unbundling energy firms or of its decision to launch an anti-trust case against Russian energy champion, Gazprom.

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10
June 2013

Russian officials: Banned by the US, on holiday in the EU

EU Observer

Russian officials banned from entering the US on accusations of corruption and conspiracy to murder are frequent visitors in EU countries, leaked information shows.

Pavel Karpov, a senior investigator in the Russian interior ministry, Artem Kuznetsov from the ministry’s economic crimes unit, and Olga Stepanova, a director in the Moscow tax authority, feature on a list of 18 persona non grata published by the US state department on 12 April.

All 18 were banned for their roles in an affair involving embezzlement of Russian tax money and the death of the man who exposed them – Russian accountant Sergei Magnitsky.

But Karpov, Kuznetsov and Stepanova stand out as leading protagonists.

Karpov and Kuznetsov organised the seizure of corporate seals and documents from Magnitsky’s former employer, British investment firm Hermitage Capital, used to expedite the fraud.

Kuznetsov also organised Magnitsky’s arrest and pre-trial detention, in which he died.

Meanwhile, Stepanova authorised a tax refund of $153 million, which flowed into the private bank of Dmitry Kluyev, a convicted criminal, who went on to launder the money in six EU jurisdictions and in Switzerland.

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07
June 2013

EU considers visa-ban-lite on Russian officials

EU Observer

The European Commission is considering a ban on visa-free travel for Russian officials linked to the alleged murder of Sergei Magnitsky.

Under the terms of a visa facilitation deal currently being discussed by Brussels and Moscow, Russian officials, who carry so called “service” passports, will no longer have to apply for visas to enter the EU’s borderless Schengen zone.

The perk is due to cover dozens of people accused of involvement in a 2008 plot to embezzle millions of euros from the Russian treasury and to kill the man who found them out – Magnitsky, a 37-year-old accountant and father of two.

US authorities found the evidence against them compelling enough to ban them from visiting the states altogether.

In Brussels, MEPs have called for a similar EU travel ban.

But Russia says they are innocent, while the European External Action Service is happy to let Moscow treat the case as an internal matter.

For their part, a group of 48 euro deputies rebelled against the situation on Tuesday (4 June).

The parliamentarians – which include senior figures from major political groups, such as German centre-right MEP Elmar Brok and Belgian Liberal Guy Verhofstadt – said in a letter to EU countries’ foreign ministers that parliament will veto the visa facilitation deal unless diplomats act.

“Under current circumstances we will be unable to support any visa facilitation agreements with Russia and will advocate the parliament to refuse its consent, unless the [EU] Council adopts an EU ‘Magnitsky Law’,” they said, by reference to the US legal ban.

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21
May 2013

Russia asks Interpol to track Magnitsky campaigner

EU Observer

The diminutive US-born businessman and his entourage of one or two assistants has become a familiar sight in the European Parliament in Brussels, which Bill Browder visits several times a year to make the case for EU sanctions on Russian officials linked to the alleged murder of his former employee, whistleblower accountant Sergei Magnitsky.

He is also a frequent visitor in Berlin, The Hague, Paris, Rome, Stockholm and Warsaw.

But he is a wanted man in Russia, which last month issued a warrant for his arrest on charges that he illegally obtained shares in its national energy champion, Gazprom, 15 years ago.

He is also wanted in other ways.

Following a series of anonymous death threats, he now lives in London under the protection of the Special Branch of the British police.

When he travels, the UK liaises with security services in other European countries to keep him safe.

But if the Kremlin gets its way, his travels could come to an end.

The Russian interior ministry on 7 May filed a request with Interpol, the international police body in Lyon, France, to issue a so-called All Points Bulletin (APB) on Browder.

If it agrees, authorities in all 190 Interpol member states will be obliged to alert Russia of his movements, enabling it to request his detention and extradition.

The police body will consider Russia’s demand at a meeting on Thursday (23 May).

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09
May 2013

EU ministers to debate Cyprus money laundering report

EU Observer

An EU-mandated report on money laundering in Cyprus contains nothing shocking, sources say. But you might be forgiven for thinking otherwise, given the level of secrecy.

The report was drafted by Moneyval, a branch of the Strasbourg-based Council of Europe, and an Italian unit of Deloitte Financial Advisory, a US-based accountancy firm.

Moneyval interviewed people at Cypriot government institutions to see how they implement international standards.

EUobserver understands that Deloitte audited a sample of Cypriot banks, but not Cyprus-based branches of foreign banks, to see how private firms do it.

One EU source familiar with the content told EUobserver: “They discovered much less [wrongdoing] than people expected.”

Another EU source said: “It’s not as bad as many people thought it would be.”

But in fact, expectations were quite low.

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02
May 2013

MEPs ponder parliament-level Russia sanctions

EU Observer

It is early days, they have no majority and it has never been done before, but MEPs in the Liberal group are pondering the creation of a European-Parliament-level travel ban list on Russian officials.

Group leader and former Belgian PM Guy Verhofstadt floated the idea in a statement on Thursday (2 May).

“I fully believe that the European Union should follow the US Congress and Senate in adopting a sanctions list. If the European Council fails to act in this regard, then the European Parliament should establish its own list based on the US Congress visa ban list,” he said.

Verhofstadt was referring to a US ban on 18 Russian officials said to be involved in the murder of Russian whistleblower Sergei Magnitsky.

The 37-year-old accountant died in suspicious circumstances in prison in 2009 after exposing corruption by high-level officials in the interior ministry.

The US Congress forced a reluctant State Department to put his alleged killers on a blacklist by threatening to block a US-Russia trade treaty if US diplomats did not act.

Under the EU treaty, the European Parliament has no powers on sanctions.

The EU foreign service can propose them and EU countries decide by unanimity whether or not to go ahead.

A Liberal group contact said one option is the US model – threatening to block other legislation where MEPs do have jurisdiction.

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26
April 2013

Russia threatens Ireland with adoption ban

EU Observer

Russia has threatened to impose a US-type adoption ban on EU presidency country Ireland if its MPs pass a tough resolution on the late anti-corruption activist Sergei Magnitsky.

Its ambassador in Dublin, Maxim Peshkov, made the threat in a letter to deputies on the Irish parliament’s foreign affairs and trade committee dated 11 March and seen by EUobserver.

Referring to the committee’s draft resolution of 4 March, which urged the Irish EU presidency to push for an EU-level visa ban on Magnitsky’s alleged tormentors, Peshkov said: “This approach … can have negative influence on the negotiation of the Adoption Agreement between Russia and Ireland being proceeded.”

Magnitsky, a Russian accountant, died in pre-trial detention in prison in 2009 after exposing a scam by Russian officials to embezzle $230 million from the Russian treasury.

His former employer, UK-based investment fund Hermitage Capital, has amassed evidence that prison guards starved him of pancreatic medication and subjected him to a brutal beating in the final hours of his life.

Its case was strong enough for the US to impose sanctions on 18 Russian officials earlier this month.

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10
April 2013

EU audit on Cyprus money laundering – whitewash in the making?

EU Observer
Auditors on an EU-sponsored mission to see if Cypriot banks launder money for Russian criminals began work last Wednesday (20 March).

The project has slipped out of view amid dramatic talks on Cyprus’ new bailout.

But it is likely to come back with a vengeance when the Dutch, Finnish and German parliaments vote in April on whether the EU should lend Cyprus the €10 billion it needs.

The German government pushed for the probe in the first place because the Social-Democrat opposition threatened to veto a Cypriot rescue on money laundering grounds.

“This is a matter of concern … for public opinion in several of our member states,” European Commission chief Jose Manuel Barroso noted on Monday.

There are two units supposed to do the job.

One is Moneyval, a specialist branch of the Strasbourg-based Council of Europe, whose top man, John Ringguth, a former British prosecutor, was in Nicosia last week to kick things off.

The other is a “private international audit firm” to be hired by Cyprus’ central bank.

The auditors’ terms of reference (what powers they have, which banks they will check) are “confidential,” to use the phrase of one German official.

Moneyval told EUobserver its task is to “focus exclusively on the effectiveness of Customer Due Diligence (CDD) measures in the [Cypriot] banking sector.” In other words, to see if banks check who their customers really are.

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