Millions of euros from Russia to Britain, via Cyprus

Published: Thu May 25 2017

The activities of Russian oligarch Alexander Shchukin have thrown Cyprus into the whirlpool of international media. According to media reports, the Russian Authorities have asked, through Interpol, for details of Shchukin’s bank accounts and offshore companies, through which some €500 million appear to have been transferred from Russia to Britain.

The international media have implicated the Russian tycoon, who is currently under house arrest, in cases of conflict of interests in relation to the ownership of coal mines in southwestern Siberia, extortion and illicit acquisitions of assets.

Specifically, a recent report by Russian site, which was based on an older report by British newspaper The Guardian, refers to Shchukin’s activities and to the suspicious routes of millions of euros from Russia to Britain, through companies with headquarters in Cyprus. It further notes that Shchukin would use illicit and unfair practices to blackmail his competitors, thus managing to bring coal mines under his control, which he would then transfer to Cypriot offshore companies.

The Guardian brought details of the way Shchukin operated to light. According to the British newspaper, the former director of the "Gramoteyinskaya" and "Tagaryshskaya" mines, Igor Rudyk, was arrested on the unprecedented charge of… having an expired passport! After being detained for 24 days, Rudyk was informed that he was facing a five-year prison sentence.
He later stated to The Guardian that they had offered to release him, with the condition that he would sign the concession of the coal mines. "I did it because I wanted to get out," he stressed. According to the report, when the "Gramoteyinskaya" mine came into Shchukin’s possession, it was transferred to an offshore company in Cyprus, called "Cyrith Holding".

"All the Russian businessmen knew that London was the best place to have their money and Cyprus the best transit point for this cause," said The same report makes extensive reference to the activities of people in Shchukin’s close family circle. Specifically, the husband of Shchukin’s daughter Elena, Ildar Uzbekov, son of a former senior executive of Russian energy giant "Gazprom", appears to be the individual in charge of transferring the capital from Russia to Britain, via companies registered in Cyprus.

"According to ancient Greek myth, the goddess Aphrodite was born on the island of Cyprus through the seafoam. Today, this myth has taken a different dimension: ‘dirty and criminal’ capital arrives from Russia to the island of Aphrodite. There it is laundered and then sent to the United Kingdom as clean money," said, adding that Shchukin, with the help of his son-in-law, transferred some €500 million to the United Kingdom through Cyprus.

Under house arrest for bribery with a BMW X5
A different case of attempting to extract a coal mine was the reason that led to Alexander Shchukin’s arrest, when the company’s major shareholder Razrez Inskoy appealed to the Federal Authorities of Russia. Two deputy governors, the head of the district Crime Investigation Department, the investigator and Alexander Shchukin’s associates were arrested as well.

According to a report by Russian newspaper Kommersant, Shchukin was charged with extortion and attempted bribery. In court he admitted to attempting to bribe the head of the district CID with a BMW X5 car. Today, he is under house arrest, while the Russian police appear to have applied to Interpol to investigate all of Shchukin’s offshore companies and bank accounts in Cyprus.

Cyprus Authorities "on edge"

While the uproar in the US over the moves of the former head of Donald Trump’s election campaign, Paul Manafort, via Cyprus continues with unabated vigour, the reports over the Shchukin case are intensifying concerns. Either way, the Republic’s Authorities have clarified that Cyprus has made all the necessary checks and signed agreements with foreign organisations for the best possible management of the phenomenon of tax evasion and money laundering.

They also stress that Cyprus underwent strict checks in the era of the bailout memorandum, while it continues to report to the EU as well as the IMF as regards money laundering. The Central Bank said in an announcement that it assesses and supervises the implementation of the requirements of the relevant legal and regulatory framework for money laundering by the supervised institutions, based on international and European standards.


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