Justice Minister stalls French Magnitsky case probe for a year

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By Stelios Orphanides

Justice Minister Ionas Nicolaou, who stressed his commitment to helping Russia’s ‘politically motivated’ investigation of Hermitage Capital founder Bill Browder, withheld related information about the Magnitsky affair that was requested by France for more than a year, Browder claimed on Thursday.

Investor-turned-activist Browder, who applied to the Cyprus courts seeking the termination of Cyprus’ legal co-operation with Russia against subsidiaries of Hermitage Capital, said the Cypriot authorities provided the requested information on Wednesday. His application, which is pending at the Nicosia District Court, led to a temporary suspension of the Russian probe.

French authorities requested in July 2015, information related to the $230 million tax fraud known as the Magnitsky case, Browder said. The Cyprus police collected the required documents and sent them to Justice Minister Ionas Nicolaou in October 2016. Nicolaou, however, ‘blocked’ their submission to the investigators in France, Browder claimed. Browder had access to the French case files as a ‘party to the proceedings’.

Nicolaou declined to comment. The French embassy in Nicosia did not respond to repeated requests for comment.

On Tuesday, Nicolaou said that his ministry temporarily suspended the investigation requested by Russia ‘respecting the judicial procedure’, but would continue co-operation with Russian investigators on its completion.

Hours earlier, Russia’s Ministry of Foreign Affairs said that it had ‘serious doubts about the legality of the decision’ of the court, which was ‘in stark contrast to the level and nature of bilateral relations’.

Browder said that two companies based in the British Virgin Islands (BVI), Zibar Management Inc. and Altem Invest Ltd, transferred to France $6.2m from their accounts held at the Cyprus branch of FBME Bank that has since gone into administration. The two companies are linked to Dmitry Klyuev, a Russian national blacklisted by the US Treasury, which considers him to be the mastermind behind ‘the criminal conspiracy uncovered by Magnitsky’.

In a first reaction, the Cypriot police said they could not detect any information about an investigation into Klyuev or his companies.

French investigative judge Renaud van Ruymbeke initiated a criminal investigation after Hermitage Capital complained to French authorities in 2013.

The French judge ordered the freezing of €8m, part of the $230m in ill-gotten gains, Browder said. More than $31m of the stolen taxes were laundered through the Cypriot banking system. One tenth of total stolen funds, ended up in France in 2007 to 2008, where it was invested in properties and other luxuries including paintings, yachts and high fashion.

Russian lawyer and accountant Sergei Magnitsky died in a Russian prison eight years ago after the police officers he implicated in the theft ordered his arrest. He was tortured and denied access to medical care while in prison.

After Magnitsky’s death, Browder embarked on a global campaign for justice, which led to the US Congress passing the Magnitsky Act, which imposes punitive measures against individuals involved in the Magnitsky case.

This angered Russian president Vladimir Putin who, in retaliation, had the Russian Duma pass a law banning the adoption of Russian children by US families. Russia also initiated a probe against Browder and – posthumously – Magnitsky, accusing them of tax fraud.

Several EU countries and Interpol turned down Russia’s request for legal assistance in Moscow’s investigation of Browder as they consider it politically motivated. The Council of Europe asked member states to follow the example set by the US which passed the Magnitsky Act.

President Nicos Anastasiades is scheduled to visit Moscow on October 22, at the invitation of President Putin, for the second time in less than three years. Russia is one of Cyprus’s major commercial partners.

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About Author

Stelios Orphanides is a journalist at CyprusBusinessMail.com. To contact Stelios Orphanides: [email protected]

  • Mike

    Oh dear, not another case of dubious money linked to Russia and Cyprus. Whilst I accept similar happens in all parts of the globe, not least in USA and UK we are a tiny Island with a tiny economy making the dubious transactions a major part of our economic wealth which therefore leaves us open to manipulation by foreign interests not always in our best interests but theirs. I hope we don’t live to regret all this.

    • Martin Standage

      Be sure that we will if we haven’t already!

    • desres

      We have – the haircut!

  • Costas Apacket

    Ionas Nicolaou should know that it is never a good day to sleep with the devil, especially on Friday the 13th.

    • almostbroke

      Yes C – ‘when you sup with the devil , use a long spoon !!!!

  • Sergey Krasilnikov

    Crooks covering each other asses.

  • Evergreen

    What a disdainful situation where higher ups are protecting a case of corruption only because it is from russia? An unbelievable bending by an eu country.

    • Terryw45

      I don’t think the EU accepted Cyprus for the benefits it would provide, so you have to ask yourself, Why?

  • Barry White

    Further examples of the “highly principled” actions being taken by the Elite to protect the cash available to them by anyone using the Laundrette Hub.

  • Benny bumble

    There is far more money to made by the lawyers and bankers from the processing of Russian money than from the French. Plus if we don’t play ball with Putin, he may start asking for the repayment of the loans he gave to the village idiot. Could it maybe have been more of a bribe than a loan, or is that being a tad cynical .

    • desres

      2500, million in loans to be repaid?