UK MP blasts Cyprus for co-operating with Russia, MoJ insulted (Update-1)

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(Adds comment by the Ministry of Justice in sixth, fourteenth and twenty-first paragraphs)

By Stelios Orphanides

A British lawmaker’s allegations that Cyprus “actively” obstructs a global money laundering investigation involving Russia, and the UK should therefore seek to downgrade it to non-compliant in MONEYVAL’s assessment triggered an angry response from the Ministry of Justice and Public Order.

“My request is based on a pattern of behaviour which is exemplified by the way they have dealt with the Magnitsky case,” Ian Austin, member of the House of Commons, said in a letter to Stephen Barclay, also a member of parliament and economic secretary of the Treasury.

“ln this regard, the Cypriot government has been actively involved in the obstruction of an international money laundering investigation into the U5$230m (€195) fraud perpetrated against the Russian Treasury in 2007,” he said. “This fraud was uncovered by the Russian lawyer, Sergei Magnitsky, in 2008; something for which he was falsely imprisoned, tortured and then extra-judicially killed”.

In his letter to Barclay dated October 13, the Labour member of parliament says Cyprus, which five years ago came under pressure to bolster its anti-money laundering practices, procrastinated in cooperating with France in the investigation of illicit funds transferred through Cypriot banks to bank accounts in France by Russian nationals.

Austin’s letter was the basis for a report in The Times of London on Thursday to which the Ministry of Justice made a reference in a statement.

“With respect to reports that the Cypriot authorities omitted to investigate allegations of fraud and that they obstructed assistance to French authorities with respect to funds suspected of being the product of money laundering, the ministry rejects these allegations as completely unfounded and informs that the investigation by the Cypriot authorities is (still) open and continues,” it said. “Cooperation with French authorities is still underway and no problem whatsoever is noted”.

The ministry also said that Cyprus’s cooperation with the UK “is deemed close and effective by both sides,” hence stamping Cyprus as non-compliant to EU anti-money laundering law, was surprising.

On October 13, Hermitage Capital founder Bill Browder said in an interview that Cypriot authorities had dragged their feet for almost a year in forwarding information collected by police and requested by France as part of its investigation. The French investigation also implicated Denmark’s Danske Bank.

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

More than $31m of the funds stolen in the Magnitsky case, were laundered through Cyprus, according to Browder.

As part of its bailout terms agreed in March 2013, Cyprus introduced stricter anti-money laundering regulations. The anti-corruption watchdog Transparency International said in a February 2017 report that the island scored best among 12 analysed countries, including the US, the UK, France and Germany.

Austin also said that “at the same time, the Cypriot government has been actively cooperating with the Russian government in persecuting William Browder,” who heads a global campaign for justice for Magnitsky as a result of which several countries, including the US, the UK, and as recently Canada, introduced legislation targeting individuals implicated in Magnitsky’s death.

Austin was referring to Cyprus’s legal cooperation with Russia against Browder as part of a probe which the Parliamentary Assembly of the Council of Europe, Interpol, and other democracies, including the UK, regard as politically motivated and refuse to cooperate.

In its response, the Ministry of Justice said that the evaluation of requests, like that of Russia in the probe against Browder, is founded on Cyprus’s conventional obligations that restrict the reasons for which a state can deny requests for legal assistance. In addition, Cyprus does take into account resolution 1966(2014) of the Parliamentary Assembly of the Council of Europe, the relevant report, and related notices of Interpol and Europol about the case.

“The execution part of the requests was done in this context,” it said and added that alleging that the cooperation with Russia in its investigation against Browder was based on political considerations was “insulting”.

MONEYVAL, the Council of Europe’s expert committee assessing member states’ compliance in combatting money laundering and terrorism financing, said in a 2014 report that while Cyprus had made progress in enhancing its legislation, “much work [was]still needed to be done to ensure that the recommendations made by the special assessment team were implemented”.

As Cyprus is currently undergoing an assessment by MONEYVAL, a member of the Financial Action Task Force (FATF), an intergovernmental anti-money laundering body, “I believe the UK delegation should recommend to the FATF that Cyprus is downgraded in the FATF evaluation from ‘largely compliant’ (as was concluded in 2011) to ‘non-compliant’ in the key areas of money laundering, the transparency of legal persons and international cooperation,” Austin said.

“This double standard raises serious questions about Cyprus’s trustworthiness in international relations and combating money laundering,” he added. “It is imperative that the working group’s evaluation accounts for the vast disparity between Cyprus’s current rating for compliance with international standards and the observable realities that are at work in the jurisdiction.”

Browder resorted to a Cypriot court seeking the termination of the island’s co-operation with Russia in the investigation against him. In response, Cyprus, whose economy is reliant on Russia, froze co-operation pending the issue of the court ruling, angering Moscow.

President Nicos Anastasiades, who met Russian President Vladimir Putin on Tuesday, found himself compelled to explain the provisions of Cyprus’s legal framework when Russia’s ruler raised the issue saying that he looked forward to a satisfactory decision, according to the Cyprus News Agency.

The Ministry of Justice also said that the Republic of Cyprus has introduced all anti-money laundering measures applied globally in its “strict” legislation which are evaluated by MONEYVAL. “As a European Union member state, authorities monitor and apply the European acquis both in terms of pre-emptive and corrective action”.

Austin’s letter is available here:

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About Author

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

  • Vova Khavkin

    Cyprus is cooperating with Russia the way a puppet cooperates with the puppet-master.

    • sweet_hooligan

      Ukraine and USA style? 🙂

    • Neroli

      True

  • AnalogMind

    Isn’t the same Austin – Corbyn guy – who in May 2009, The Daily Telegraph reported that Austin had tried to split a claim for stamp duty on buying his second home in London into two payments and tried to claim the cost back over two financial years. This allowed him to claim the majority of the money (£21,559, just £75 short of the maximum) under his second-home allowance in the 2005/06 financial year. He then claimed for the remaining £1,344 stamp duty cost in 2006–2007, together with his legal fees. In all, he went on to claim £22,076 (£34 short of the maximum)in the next financial year.

    It also reported that Austin “flipped” his second-home designation weeks before buying a £270,000 London flat, and that he had claimed £467 for a stereo system for his constituency home, shortly before he changed his second-home designation to London. He then spent a further £2,800 furnishing the new London flat.

    • Roof Tile

      Your right – glass houses and all that. And he should be hung out, not closeted in the Westminster. However, he could well be correct in this case.

      • AnalogMind

        He may, but do you think his personal conduct makes him effective in pursuing “financial scandals” of others?

        • Roof Tile

          Well, he has a right to speak, even if he is basically a bad sort…

    • Bystander

      Case exists for quite a while, and a man is killed in jail in the country not exactly known for its best humane practices. Money taken out of the country (those 230 millions officially declared, possibly more) has been partly used to purchase properties in Dubai by Russian law enforcement authority employees – there are plenty of documents about it , if you ever wish to search and see. Russian authorities are trying to silence witnesses of the case (Browder being the one making most noise), because part of this money was laundered through Mr. Roldugin (personal friend of certain prominent businessman, Mr. Putin) companies in Panama, managed by, guess whom? Monsack Fonseca. Google for ‘roldugin panama’.

  • cyprus observer

    One day Cyprus will be seriously bitten in the back side with its dealings with Russia, an aggressor state and one which Is under EU embargoes due to its role in the Crimea. However, when that day comes…it will still be the fault of the British, US or Turkey.

    • Louis

      Almost as bad as buying S400 missiles from them!

    • Sandie

      Bill Browder who has had his life many times and is now resident in the UK has just had his US visa revoked.

    • Paranam Kid

      Watch out for aggressor state Russia, and keep kissing the backside, licking the boots, and cozying up to non-aggressor the US.
      It would do you a lot of good to read some alternative news & analysis.

      • elbmw

        If you ask me they’re all as bad as each other. Were no better than the monkeys in those wildlife programs whereby the clan leader (USA) has to keep fending off challengers (Russia) and feels it has to do whatever it takes to stay in the no 1 spot as the alternative is too painful for it to imagine. Cyprus seems to find itself in between all the time, without even realising it until its too late.

        • Paranam Kid

          True, but what gets me is that the “whatever it takes to stay in the no 1 spot” includes US propaganda (fine), that most people accept as gospel (not fine !!).

          So few people have he curiosity, never mind the sense of owing it to themselves, to dig a bit deeper & fully understand the dynamics of what is going on.

          • elbmw

            Well said. If curiosity is an extension of ones intelligence then it is sadly lacking in the majority of people who have a below average IQ, whatever that means. Perhaps that’s why some call them sheeple.

            The most frustrating aspect is that most won’t believe something unless they hear it on the “news”. I’ve tried telling people that they should inquire for themselves but I come away feeling as though I’ve been trying to teach a donkey to count to 10.

          • Paranam Kid

            You are right, and there are a number of not-for-profit organisations that put out excellent news analyses & really clear the muddied waters, create light where there is darkness. But, like watching TV, most people find it easier to absorb passively what spoon-fed to them so they don’t have to make an effort & not think for themselves.
            A good example of the consequences: a Trump gets elected.

        • cyprus observer

          That’s because Cyprus is insignificant.

          • elbmw

            Cyprus is one of the most strategically important places in the world. What is considered as insignificant and cannon fodder are its people.

      • cyprus observer

        Lol.

    • Neroli

      Yes all these comments are so typical – blaming everyone else !

  • Pc

    Pot, kettle, black. The UK, with the Isle of Man and the Channel Islands and its close ties to places like Bermuda, the British Virgin Island (even mentioned in this article), etc. Not to mention its dominant role in the Panama papers…

    Sure, it doesn’t make any of this right. But a bit of nuance would be in order by this UK representative.

    • rich

      City of london is the real laundromat, Cyprus just adds detergent.
      Panama papers = Limited hangout.

  • Evergreen

    Mr.Ian Austin is right. I am glad he pointed it out.

    • elbmw

      The British are always right, especially when it came to the biggest crook of all Asil Nadir and his side-kick that awful terrorist Denktash

      • Evergreen

        Not always. In this case-yes.

        • elbmw

          Ah, you didn’t detect the sarcasm in my comment.

          • Evergreen

            Oh,really?:(

      • CM reader

        Good on you. Meraculously he ”escaped” in his own private jet! Not surprising he went back to the UK on a ”voluntary” basis AFTER the Tories won the election whom he bankrolled (what a coincidence!) where he was ”prosecuted” and he is now doing ”time”.
        The fact that the pension funds (the poor panters savings) lost millions and millions of pounds has necer been montioned.

        • Douglas

          He is no longer doing time,he was released a long time ago and is back in North Cyprus and back in business.

  • Paranam Kid

    The UK government & the lawmakers are increasingly losing touch with the real world. It would be a good idea for the UK to get its own house in order 1st before it starts to criticise Cyprus. Apart from the obvious issue, Brexit, which is turning into a complete disastrous swamp, there is the UK’s support for Saudi Arabia in its bombing of Yemen, one of the poorest countries on earth.

    And that is leaving aside all of the UK’s other filth in Iraq, Libya, Syria, etc. etc. So, get worked up about alleged money laundering cooperation with Russia, and that issue with that crook Browder & his late side-kick Magnitsky, is a joke in the big picture.

    • annaaurora

      What is your specific issue with Bill?

      • Paranam Kid

        I’ll cut a very long, complicated story short. I apologise for what is still a long reply.

        While he loosely accused a number of Americans of felonies, Browder continued to claim that Magnitsky was a crusading “lawyer” who uncovered a $230 million tax-fraud scheme carried out ostensibly by Browder’s companies,
        but, which, according to Browder’s account, was really engineered by corrupt Russian police officers who then arrested Magnitsky and later were responsible for his death in a Russian jail.

        According to Browder’s own biographical description of Magnitsky, he received his education at the Plekhanov Institute in Moscow, a reference to Plekhanov Russian University of Economics, a school for finance and business, not a law school. Nevertheless, the West’s mainstream media – relying on the word of Browder – has accepted Magnitsky’s standing as a “lawyer,” which apparently fits better in the narrative of Magnitsky as a crusading corruption fighter rather than a potential co-conspirator with Browder in a complex fraud, as the Russian government has alleged.

        In other words, on this high-profile claim repeated by Browder again and again, it appears that presenting Magnitsky as a “lawyer” is a convenient falsehood that buttresses the Magnitsky myth, which Browder constructed after Magnitsky’s death from heart failure while in pre-trial detention.

        A documentary about the case produced by filmmaker Andrei Nekrasov, who was known as a fierce critic of Russian President Vladimir Putin, takes an unexpected turn when his research turns up numerous contradictions to Browder’s storyline. He also discovers that European officials simply accepted Browder’s translations of Russian documents, rather than checking them independently. A similar lack of skepticism prevailed in the US.

        Furthermore, Nekrasov discovers evidence that Browder’s web site eliminated an earlier chronology that showed that in April 2008, a 70-year-old woman named Rimma Starova, who had served as a figurehead executive for Browder’s companies, reported the theft of state funds. Nekrasov then shows how Browder’s narrative was changed to introduce Magnitsky as the whistleblower months later, although he was then described as an “analyst,” not yet a “lawyer.” As Browder’s story continues to unravel, the evidence suggests that Magnitsky was an accountant implicated in manipulating the books, not a crusading lawyer risking everything for the truth.

        Browder has characteristically used lawsuits and threats of still more legal action to intimidate numerous television stations in Europe and prevent additional showings. And when confronted by Nekrasov about the inconsistencies he becomes aggressive & threatening, even though he says he has nothing to hide.

        And then there is a certain evasiveness on the part of Browder, who notably makes outrageous claims about the Russians but does not do so under oath, where he might be subject to legal consequences for perjury. The documentary shows him huffing and puffing to explain himself at times and he has avoided being served with subpoenas on allegations connected to the Magnitsky fraud that are making their way through American courts. In one case, he can be seen on YouTube running away from a server, somewhat unusual behavior if he has nothing to hide.

        Conclusion
        Browder is a crook who is politically well-connected in the US & is able to pull the wool over politicians eyes, with the latter keen to have that done to them because it fits the anti-Russia hysterical narratove beautifully.

        • Bystander

          A long story indeed, all BS.

          • Paranam Kid

            Calling it BS is the forte of those who cannot think for themselves, prefer to be spoon-fed by the government “info”, and therefore cannot come up with fact-based counter-arguments.
            Carry on cowboy, make your invaluable contributions.

          • Bystander

            Nobody got a slightest doubt that you’re the most competent and skeptic person in the area.

        • annaaurora

          Hmmmm. So when he sits before Senate Judiciary Committee which is always deemed under oath he’s lying? And you dismiss President Barack Obama’s intellect, Preet Bahara’s as well not to mention NATO’s & EU’s. You put your trust in Putin and his associates. I will give you this your spin is good but there are far too many unanswered questions, too many coincidences for me to pity Putin and his Kremlin. What happened here was the perfect marriage. It also happened in GB with Brexit. Ideology met dark monies. Granted we’ve been working on much of this alone for years but then came Putin who is as lethal as they come and said hey let’s all jump into bed together. That must of been some fun negotiating. I can’t imagine trying to get the Koch’s on board but they did, I gather. I have a feeling Niger was a giant mistake. Trump was a big mistake. Brexit was a big mistake. Laundering money and perpetual war I hope will be a thing of the past when all is said and done. You’re wrong about Bill, next up France. So sow your doubt, create your chaos we will prevail.

          • Paranam Kid

            Browder refuses to take an oath – read properly.
            I never dismissed Obama’s intellect, but don’t see the relevance here. Besides, Obama is the one who restarted the anti-Russia hysteria.

            I haven’t pitied Putin anywhere, he does not need it. I don’t know who is bedding with whom, that seems to be your inside knowledge.

            Don’t see the relevance of Koch, Niger, Brexit, France, …..

            As for “we will prevail”, don’t know who you mean by “we”, but if you are in bed with Browder, or the anti-Russia neocons, or whoever else, enjoy & good luck to you.

          • Martin Standage

            Anyone who trusts Putins regime is either very naive-or in their pay!

    • Bystander

      Everything is a joke, including your views, in the big picture. Remember – “the planet is fine, humanity is fcuked” (George Carlin)

      • Paranam Kid

        …. and the UK is fcuked by mediocrity, of which May is the icon.

  • Philippos

    …and I thought Corbyn and The Labour Party were our new best friends. They are almost as two faced as we are. Everyone however is outclassed by The Russians, so be careful what you do and who you do it with. almost everyone else has a plan we just follow the money at any cost and to any of our fellow Cypriots too. Unfortunately if we survive long enough we shall get our comeuppance. (I like this English word too but probably messed up the spelling!)

  • Les

    Now that the UK is out of the EU – it’s opinion is basically irrelevant.

    • Bystander

      It’s quite far from being out of EU. And its opinion on Cyprus is relevant as long as Cyprus is a Commonwealth country.

  • annaaurora

    GB’s Brexit was Russia’s original coup before the enormous coup d’etat in US. Granted ours was 40 years in the making and partially organic. GB was bought and sold, manipulated just like us. It’s unfortunate you can’t stop Brexit before you know all the truths.

  • CM reader

    Mr Righteous Ian Austin!

    Reported by The Daily Telegraph

    Abusing the tax system and over claiming on his parliamentary expenses at the expense of the British Taxpayer.

    Expenses controversy

    In May 2009, The Daily Telegraph reported that Austin had tried to split a claim for stamp duty
    on buying his second home in London into two payments and tried to
    claim the cost back over two financial years. This allowed him to claim
    the majority of the money (£21,559, just £75 short of the maximum) under
    his second-home allowance in the 2005/06 financial year. He then
    claimed for the remaining £1,344 stamp duty cost in 2006–2007, together
    with his legal fees. In all, he went on to claim £22,076 (£34 short of
    the maximum)in the next financial year.

    It also reported that Austin “flipped” his second-home designation
    weeks before buying a £270,000 London flat, and that he had claimed £467
    for a stereo system for his constituency home, shortly before he
    changed his second-home designation to London. He then spent a further
    £2,800 furnishing the new London flat.

    • AnalogMind

      A real piece of work, eh?

    • Bystander

      …and? How this changes the fact that Prez Nik is bending over?

      • CM follower

        To be accused of wrong doing by someone like Austin is really harsh!

  • Vladimir

    I am writing to you regarding grave concerns how come UK still doesn’t blame Russia for interference in the voting for BREXIT?? It’s a perfect chance to cancel it blaming somebody else instead of its own stupidity…

    • Bystander

      Look for it tomorrow, in The Independent news!

  • hornet

    this battle is between the big dirty global players…. CY is just collateral damage… the UK MP just a minor pawn in this game given a script for publicity and for putting pressure!

  • Roc.

    what a bunch of hypercrites, maybe they should put thier house in order first, like the BAE scandel or the billions of blood money they got from the saudis,