THE LEGAL Service yesterday rejected reports in the British press that the Cypriot authorities refused to investigate claims of Russian money laundering through the island’s banks.
The Office of the Attorney-general further questioned the motive behind the attempt to link allegations of money laundering with Cyprus’ request for an EU/IMF bailout.
On Monday, British daily The Telegraph reported that politicians across Europe were urging their governments to demand a crackdown on alleged Russian money-laundering in Cyprus as a condition of a potential €17 billion bailout.
The paper said MPs in the UK, Finland and the Netherlands have questions for the banks before a deal is signed, claiming that German politicians are also looking into the issue.
The European MPs concerns follow “revelations” that the Cypriot authorities refused to investigate claims that criminals linked to a $230m alleged Russian tax fraud laundered $30m through the island’s banks, said The Telegraph.
According to the paper, the case has been linked to a number of suspicious deaths, including that of Alexander Perepelichny, 44, a whistleblower living in the UK who died while out jogging last month.
The alleged criminal conspiracy involving police and tax officials was uncovered by Sergei Magnitsky, a lawyer working for UK-based hedge fund Hermitage Capital Management, who died in 2009 after a year in pre-trial detention on unproven charges of tax evasion. The US has since banned entry to 60 Russians linked to the fraud and death.
The Telegraph said Hermitage wrote to Cypriot Attorney-general Petros Clerides last July with evidence allegedly showing that Cyprus-based banks had received stolen money. The British broadsheet claimed Clerides replied that he could not investigate without a request from the Russian authorities.
The Attorney-general’s Office yesterday sent a letter to The Telegraph expressing its “surprise and strong opposition” to the alleged response of the AG to the Hermitage letter that “he could not investigate without a request from the Russian authorities”.
“Such a statement was never made and never included in the letter,” said the AG’s Office, noting that the newspaper had a copy of Clerides’ response to Hermitage “in which there was no such reference”.
It adds: “On the contrary at the end of the letter the Attorney-general encouraged the lawyer to send any additional information showing that the case was open”.
The Legal Service also questioned the alleged link between money laundering allegations and Cyprus’ bailout request.
“Moreover, we fail to understand why in the said article this case was connected with Cyprus’ application for financial support from the EU!”
Speaking to the Cyprus Mail, a government source noted that the authorities were already looking into the allegations made above to try to ascertain whether there is any need for an investigation. The source questioned the timing of a number of recent reports in the international press regarding alleged money laundering in Cyprus.
Specifically, there have been several articles in the German press citing reports from the German intelligence service that Russian oligarchs and ‘mafiosi’ stand to gain the most from a Cyprus bailout.
On Tuesday after a meeting of EU finance ministers in Brussels, German finance minister Wolfgang Schaeuble responded to a question on a Cyprus bailout saying that Germany expected complete transparency from Cyprus on money laundering issues, as well as “extensive cooperation on tax questions”.