25062019Headline:

Cyprus pressured over Russian money

The outflow of Russian deposits from Cyprus continues unabated, due to the pressure exerted by the United States, over the past few years. According to information published by the Central Bank of Cyprus, the strict measures imposed and the closure of shell-companies, led to the shrinking of Russian deposits in Cypriot banks. It is estimated that around €1-1.5b Russian deposits flee the island’s banking system each year.

Overall, since 2015, Russian deposits amounting to €5.15b, fled the Cypriot banking system. As the Cypriot newspaper Phileleftheros distinctively reported, Russian deposits amounted to €21.51b in 2012, surpassing the country’s GDP.

MONEYVAL’s delegation visited Cyprus over the last few days, meeting with the state bodies responsible for Cyprus’ AML/CFT system, as well as a large number of private organisations. The delegation will prepare a report on Cyprus that will be submitted to the Council of Europe’s Committee of Experts, to evaluate the country’s measures against money laundering and terrorism financing. Apart from MONEYVAL, Cyprus is closely monitored by the US Financial Crimes Enforcement Network (FINCEN).

It should be noted that the British parliament held an event a few weeks ago, where it was highlighted that the Cypriot authorities must contribute and cooperate with their Russian and British counterparts on matters of corruption and money laundering.

Specifically, the event at the British parliament – which was organised by the British conservative MP, Sir Henry Bellingham and Lord Tim Razzal – thoroughly discussed the case of Alexander Shchukin, the so-called ‘king of coal’. The Russian magnate was at the center of several reports in the international press over the past few years, as he has faced various court proceedings, pertaining to the overtake of coalmines with disputed methods. He has assets in the United Kingdom, Monaco and Cyprus. On many occasions he was featured in publications which implicate Cyprus in cases of dirty money transfers from Russia, which ended up in London through a complex route and offshore companies that were registered in Cyprus. The participants in the discussion were mainly experts on matters of corruption.

The talk held at the British Parliament also discussed the ways in which the authorities of the three countries could cooperate on cases of suspected money laundering by Russian oligarchs, through offshore companies registered in Cyprus.

A representative of a group of Russian coalminers, already in dispute with Shchukin over the takeover of the Koksovaya-2 coalmine, was called to speak at the event at the British Parliament. The coalminers have launched a crowd-funding campaign as well as a petition, in an effort to promote their demands for the investigation into the seizure of the coalmine as well as the conditions under which Yevgeny Lazarevich (who was the bankruptcy supervisor of the coalmine) disappeared and was possibly murdered. More information on the matter can be found on the website: http://www.bloodcoalmoney.com/

Shchukin is accused of being the mastermind behind the murder/disappearance of the bankruptcy supervisor of the Koksovaya-2, Yevgeny Lazarevich in 2016. The sister of the missing man, Anna, was invited to attend the event at the British Parliament and spoke about the circumstances of her brother’s disappearance.

Shchukin has been under house arrest over the past 2 years, along with seven other individuals, on extortion charges with a view to control the Inskoy coalmine, a case for which court proceedings are still ongoing.