Austria money Laundering?

Money Laundering Austria

Austria money Laundering?

Raiffa Bank – money laundering criticism

Are Putin’s judo friends in a business relationship with Raiffeisen Bank?

A letterbox company in Cyprus that moved hundreds of millions of euros was a good customer of Raiffeisen Bank International. The trail leads to the Russian oligarch brothers Rotenberg

Being friends with today’s Russian president since your youth and being in the judo ring together is a good prerequisite for joining the ranks of the richest Russians.

Brothers Arkady and Boris Rotenberg, born in 1951 and 1957, are old judo friends of Putin; they have known him since their time together in St. Petersburg in the 1990s. Today, the Rotenbergs are multi-billionaires. In Russia, they like to be called the “kings of state contracts.”

The brothers’ joint venture, the SGM Group, primarily builds oil and gas pipelines for state-owned Gazprom. In 2015, they added a contract that was as lucrative as it was controversial. It was the construction of the 19-kilometer bridge from the Russian mainland to the recently annexed Crimean peninsula. Admittedly, the Rotenbergs had never built a bridge before. But with old sports friends, that doesn’t matter.

Highly controversial bridge

Things are going less well in the West: Arkady Rotenberg has been subject to U.S. and EU sanctions since 2014, the year of the Crimea annexation. Brother Boris, also sanctioned in the US since 2014, also joined the EU list in the spring of 2022.

Now documents available to the STANDARD show: Letterbox companies on Cyprus, which are at least in the Rotenbergs’ sphere of influence – if not under their control – maintained business relations with a major Austrian bank for a long time. The bank in question is, of all things, Raiffeisen Bank International (RBI), which has already come under heavy criticism for its Russian business.

Criticism for lax money laundering prevention

Moreover: According to these documents, Austrian authorities, specifically the Financial Market Authority (FMA), criticize RBI for not taking the rules regarding the prevention of possible money laundering and terrorist financing seriously enough – among other things, regarding this highly sensitive corporate client in Cyprus, of all places.

The background to the case is that a legal dispute between RBI and the FMA has been ongoing for several years. According to the FMA, in several cases RBI had not taken money laundering prevention in so-called offshore areas seriously enough. In 2018, RBI was therefore ordered to pay the highest fine ever imposed on a financial institution in Austria, more than three million euros. The proceedings were later reopened due to formal errors and a partial statute of limitations. Today, the case is still before the Administrative Court, not legally binding.
A mailbox for hundreds of millions

The case also involves the company Hervet Investments Limited (dissolved in February 2022), registered in the Cypriot capital Nicosia. The customer relationship between this Hervet and RBI had been running since 2002 and was in any case still up and running in mid-2016. It is not possible to say how long it continued then – RBI does not comment on individual customers.

In any case, Hervet held a securities account and clearing accounts for stock exchange transactions at RBI. Enormous sums flowed. The highest transaction in the period between the beginning of 2015 and mid-2016 had amounted to more than a tenth of a billion euros, according to documents available to the STANDARD from July 2019. Specifically – 123,011,941.90 euros.

From mailbox to mailbox

Who owns the Hervet? Behind it are two other Cypriot letterbox companies with almost the same name in equal parts: the Zoulian Limited and the Zoulian Management Limited. These two Zoulian companies are managed and held in trust by a Cypriot lawyer.

But who actually controls the Zoulian companies? The FMA complains that RBI did not find out. Banks are always obliged to find out which natural persons are behind the companies with which they do business.
“Not ascertained who the owner is”

RBI, however, had “not established who is the owner of the shares” in the two Zoulian companies, the documents say. It had “not obtained reasonable evidence” of who controlled the Zoulian companies.

Who might it be? One lead emerges in the so-called Paradise Papers: a massive data leak of more than 13 million records on shell companies that leaked out of the Isle of Man-based law firm Appleby in 2016.

According to the report, Zoulian Limited is closely linked to another Cyprus-based shell company, Damstone Limited. Specifically, Zoulian handles all corporate administration for Damstone, from handling tax issues to notarizing documents. And who owns this Damstone? According to the Paradise Papers, the owner and beneficial owner is Boris Rotenberg, Arkadi’s younger brother.

London luxury estates

It is not only from the Paradise Papers that a close connection between Zoulian and the Rotenbergs can be gleaned. In 2014, the British “Times” reported that Boris Rotenberg had bought an estate in the posh London district of Knightsbridge. The official buyer: a shell company in Cyprus – which in turn belongs to Zoulian.

Most recently, in March 2022 – in a research on Russian oligarchs – the German “Wirtschaftswoche” linked the Zoulian companies to the Rotenbergs: “Documents from the Cypriot company register indicate that Rotenberg is likely behind this company.”

So did or does, Austria’s RBI have business ties with companies owned by the Rotenberg brothers, who are among Russia’s most powerful oligarchs and closest Putin confidants? “For reasons of banking secrecy, we are not allowed to comment on this,” an RBI spokeswoman wrote to the STANDARD.

Only this much: “RBI considers all accusations made by the FMA in this penalty decision to be inaccurate and is therefore fighting it in full.” (Joseph Gepp, 5.3.2023)

Source –Der Standard – translated from the German

Photo – Pixabay

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