By Elias Hazou
CONTRARY to government claims, a Russian mutual legal assistance (MLA) request to Cypriot authorities does appear to be directly related to the Sergei Magnitsky case, documentation seen by the Cyprus Mail reveals.
In late November, Cypriot police officers of the Financial Crime Unit, along with two senior Russian interior ministry officials searched the Nicosia offices of a leading law firm which counts the Hermitage Fund among its clients. The action was carried out after an MLA request from Russia. Police interrogated the law firm’s employees and left a request for corporate documents.
At the time, the Hermitage Fund released a statement claiming the raid was part of new posthumous criminal proceedings by Russia’s interior ministry against Sergei Magnitsky and in absentia against William Browder, co-founder of the Hermitage Fund and leader of the ‘Justice for Sergei Magnitsky’ campaign.
Magnitsky, a 37-year-old Russian accountant, died in jail in 2009 after he exposed huge tax embezzlement by a criminal gang – the ‘Klyuev group’ – involving high ranking officials in the Russian interior ministry and its internal intelligence service, the FSB.
Under the new proceedings, Russian investigators are accusing Magnitsky and Browder of organising the $230m fraud that the two claim to have uncovered and reported.
At the time of the Nicosia raid, the Mail spoke to highly-placed government sources, who denied the Russian assistance request was related to Magnitsky.
Rather, the sources contended, the request concerned an ongoing investigation by Russian authorities into various companies’ acquisition of Gazprom shares. The Russians had made similar requests to other countries, the sources added.
Specifically, Russian authorities were said to be investigating the purchase of Gazprom shares by entities registered in the Russian Federation but thought to be acting on behalf of companies registered abroad.
From the outset, the Hermitage Fund dismissed the Gazprom connection as a smokescreen.
Now, documents seen by the Mail, including the Cyprus implementation document – dated November 24, 2015 – of the Russian MLA request – seem to bear out Hermitage’s account.
The documents reveal that authorities here are in fact being asked to investigate companies directly linked to Magnitsky, Browder, and the Hermitage Fund.
“At best, it appears the Cypriot justice ministry may have been misled by the Russians,” Browder said in a telephone conversation.
Although the framing of the Russian request is such that it purports to be investigating the acquisition of Gazprom shares it appears this is a roundabout way of seeking information on the Magnistky case.
Moreover, it’s understood that Justice Minister Ionas Nicolaou has been sent a copy of a presentation prepared by the ‘Justice for Sergei Magnitsky’ campaign.
The Russian MLA request specifically asks for information on Sergei Magnitsky, William Browder and his Hermitage colleagues who are being accused by the Russian government in connection with the Magnitsky case.
It further seeks information on Firestone Duncan, Magnitsky’s law firm.
The same documents reveal that, through the Russian MLA request, Cypriot authorities are being asked to obtain information on entities such as Glendora Holdings and Kone Holdings, companies victimised in Russia in the fraud which Magnitsky uncovered.
In addition, the MLA request seeks information on Dalnaya Step, the Hermitage-advised company which was used by Russian authorities to imprison Magnitsky, and then to conduct trial over him posthumously.
Interpol’s Commission for the Control of Files (CCF) has found the Russian ‘Gazprom case’ to be “predominantly political”, where all legal assistance must be refused in conformity with UN Human Rights Declaration and prohibition on use of assistance for political purposes.
In an Interpol letter dated January 29, 2015, also seen by the Mail, and responding to a request on information on Browder, the agency states that “NCB (National Central Bureau) Moscow and all NCBs were informed that in light of the findings of CCF, all international police cooperation via Interpol’s channels in this case would not be in conformity with Interpol’s Constitution and Rules.”
The British Home Office, the Ministry of Foreign Affairs of the Netherlands, and Germany’s Federal Ministry of Justice have all refused to grant Russian requests for Browder’s arrest and extradition or for information regarding the acquisition of Gazprom shares.
Despite this, Cyprus, an Interpol member, is cooperating with Russian authorities on the same issue, Browder told the Mail.
“Russia wants to export its legal nihilism to the West, and seems to have found a weak link in Cyprus,” he said.
The Council of Europe has issued two reports on the Hermitage and Magnitsky case, finding that the Russian proceedings against them were politically-motivated, discriminatory, and abusive, and as such legal assistance to Russia must be refused by member states.
Cyprus is a member of the Council of Europe.
In June 2007, dozens of Russian police officers swooped down on the Moscow offices of Hermitage and its law firm, confiscating documents and computers. Three Hermitage holding companies were seized on what the company’s lawyers insist are bogus charges.
Hermitage says the owners and directors of the companies were subsequently changed, the courts were used to create fake debts allowing for the taxes to be refunded, and the money was laundered through banks.
Effectively, the Cypriot directors of the mother companies were defrauded when powers of attorney were forged.