PRESS RELEASE

Latvian Regulator Imposes Largest Possible Fine on a Latvian Bank involved in Money Laundering Connected to the Magnitsky Case

19 June 2013 – Following a probe into six Latvian banks, Latvia’s financial markets regulator, the Financial and Capital Market Commission, has imposed a fine of 100 thousand Lats (around $191,000) the maximum fine possible on one Latvian bank for its role in laundering the $230 million stolen from the Russian government directly connected to the Magnitsky case.

The probe was based on a complaint filed by Hermitage Capital Management with the Latvian authorities in July 2012 naming six banks (Aizkraukles Bank, Baltic International Bank, Baltic Trust Bank, PrivatBank, Rietumu Bank and Trasta Komercbank) that received funds directly or indirectly from the $230 million illegal tax refund exposed by the late Sergei Magnitsky.

The name of the sanctioned bank has not been disclosed by the regulator.

The aim of the probe was “to clarify whether the banks had complied with regulatory requirements for anti-money laundering and combating terrorist financing,” said the Financial and Capital Market Commission.

“Following inspections of six Latvian banks conducted in relation to Magnitsky case, Financial and Capital Market Commission (FCMC) adopted a decision to impose an administrative penalty for deficiencies in internal control system on one occasion, i.e. customer due diligence. A maximum fine of 100 000 lats is imposed for violations in the area of laundering the proceeds from criminal activities and terrorist financing,” said the Financial and Capital Market Commission of Latvia.

Commenting on the transnational nature of the money laundering conspiracy exposed by Sergei Magnitsky and which had victimized Hermitage in Russia, the Latvian regulator pointed out it spans “several dozens of banks” and many countries in Europe highlighting the need to unite forces against the common threat to EU financial systems.

A company that received the illicit funds in Latvia on accounts of PrivatBank, one of the banks inspected by the Latvian Financial and Securities Market Commission, called Technomark Business, was registered in the UK, had a parent company registered in Cyprus, which in turn had a Latvian director Erik Vanagels, named in this week’s Sunday Times (http://www.thesundaytimes.co.uk/sto/news/uk_news/People/article1274719.ece) for his involvement in other “several thousands (mainly UK) companies.”

It was previously reported that illicit funds stolen via a scheme exposed by Sergei Magnitsky were wired through six Latvian banks, including: Baltic International Bank: $8.5 million, Trasta Komercbank: $6.2 million, Rietumu Bank: $2.1 million, Aizkraukles Bank (now – ABLV Bank): $1.2 million, Baltic Trust Bank (now – GE Money Bank): $0.9 million, PrivatBank (previously Paritate bank): $0.5 million.

When this information was revealed last September by the Latvian investigative report “Nothing Personal” aired on TV3, none of the banks wanted to talk on camera, according to Latvian publication IR (http://www.ir.lv/2012/9/24/raidijums-magnitska-lieta-iesaistitas-vairakas-latvijas-bankas). ABLV Bank replied last September as follows: “Previously we had known this information. Currently, we are conducting the background investigation.”

The Trasta Komercbank’s comment at that time was: “At the moment we can only comment that, according to Latvian legislation, any kind of information on bank clients is confidential… TKB’s operation is in full compliance with national regulations and international banking standards.”

The news of the Latvian sanctions has been featured in the Latvian media (http://www.ir.lv/2013/6/16/fktk-magnitska-lieta-soda-vienu-latvijas-banku).

For further information, please see:

Law and Order in Russia

By Ben Kopp
Impunity Watch Reporter, Europe

BERLIN, Germany – Following evidence that a former Nazi SS officer has been living in Minnesota since 1949, Polish prosecutors promised to assist the U.S. Department of Justice in their investigation of falsified immigration papers. As obligated, Germany may prosecute Michael Karkoc for war crimes as a Nazi with “command responsibility,” even if no country can prove Karkoc’s direct involvement in atrocities.

While no current evidence demonstrates that Karkoc directly committed war crimes, evidence corroborates suggestions that Karkoc was present as the company leader when his Ukrainian company massacred civilians. Further, Nazi SS files mention Officer Karkoc’s involvement in the 1944 Warsaw Uprising, where Nazis brutally suppressed a Polish rebellion.

In 1949, Karkoc denied his World War II military service to American authorities. However, records demonstrate that Karkoc worked as an officer and founding member of the SS-led Ukrainian Self Defense Legion. According to an SS payroll document, Karkoc was the highest-ranking officer of the company. Later, Karkoc was an officer in the SS Galician Division. Both organizations were blacklisted and their members forbidden from entering the United States.

While Germany plans to investigate with the possibility of future prosecution, Poland may also be a possibility because most alleged crimes were against Poles on Polish territory. Regardless, Karkoc would be unlikely to be tried in his native Ukraine, where such men are today largely seen as national heroes who fought for the country against the Soviet Union.

Members of his unit and other witnesses have told stories of brutal attacks on civilians. But Karkoc refused to answer questions. “I don’t think I can explain,” Karkoc said.

“It was all like a trance: setting the fires, the shooting, the destroying,” one of Karkoc’s men, Vasyl Malazhenski recalled in a 1967 statement. “Later, when we were passing in file through the destroyed village,” Malazhenski said, “I could see the dead bodies of the killed residents: men, women, children.”

In 1995, Karkoc published a memoir in Ukrainian. Karkoc wrote that he joined the German army in 1941, following the Nazi invasion of the Soviet Union. At that time, he fought on the Eastern Front in Ukraine and Russia, where he received an Iron Cross for bravery. In 1943, Karkoc helped found the Ukrainian Self Defense Legion. Also, Karkoc served as a company commander in the unit, which the SS managed until the end of the war. However, Karkoc does not discuss massacres of civilians.

As a hobby, a retired clinical pharmacologist researched Nazi war crimes. Through that research, he found Karkoc’s name among members of the SS Galician Division who emigrated to Britain. After an internet search revealed Karkoc’s Minnesota address, the pharmacologist informed AP.

One of Karkoc’s four sons born after the war stated that the story is “notably lacking in proof or evidence,” calling the AP’s story “sensationalist and scandalous.”

If finding the officers who committed World War II atrocities has been challenging to date, a greater difficulty presents itself in ensuring that Michael Karkoc is in fact Officer Karkoc.

For further information, please see:

Minneapolis Star Tribune – Son Disputes Report That Minneapolis Man was Ex-Nazi Commander – 15 June 2013

New York Times – Minnesota Man, 94, is Investigated for Nazi Ties – 15 June 2013

USA Today – Shock Lingers after Nazi Unit Leader Found in Minnesota – 15 June 2013

Associated Press – AP Impact: Commander of Nazi-Led Unit Lives in US – 14 June 2013

International Business Times – Minnesota Nazi: Michael Karkoc, 94-Year-Old Former Nazi-SS Commander, Found Living in Minneapolis – 14 June 2013

The Telegraph – Commander in Nazi SS-Led Unit Linked to Atrocities ‘Found Living in Minnesota’ – 14 June 2013

Press Release

12 June 2013 – Roman Anin, Russian journalist for an independentNovaya Gazeta, has won the prestigious international journalism award for his investigative reporting oа the high-level Russian corruption uncovered by Hermitage lawyer Sergei Magnitsky who was in retribution arrested andkilled in Russian police custody.

“The award to Roman Anin is a testament to his bravery and integrity in the fact of massive corruption in Russia and a tribute to the legacy of Sergei Magnitsky who gave his life for exposing the same crimes and standing up to the same principles and belief for the rule of law and accountability of government officials,” said Hermitage Capital representative.

The 2013 Knight International Journalism Award recognizes excellent reporting that makes a difference in the lives of people around the world, said the International Center for Journalists, making the announcement.

In 2007-2008, Russian lawyer Sergei Magnitsky uncovered how Russian officials and organised criminals stole $230 million from the Russian budget of the tax revenue paid by his client, Russian companies of the Hermitage Fund. After he reported and gave evidence of the crime, he himself was arrested on trumped-up charges, tortured to retract his testimony, and killed in the Russian Interior Ministry custody at the age of 37. Since his death, Russian authorities have exonerated all officials he named from any wrong-doing.

In 2011, Russian journalist for Novaya Gazeta, Roman Anin, began a series of explosive reports describing how the criminal conspiracy protected by government officials stole budget funds both before the $230 million theft uncovered by Sergei Magnitsky and after, and that these thefts continued even after Sergei Magnitsky’s death and their public exposure, using the same modus operandi. In an article called “Makhaon, Parfenion and He,” published on 28 September 2011, Roman Anin described links from the thefts to senior tax officials subsequently moved to senior positions with the Russian Defence Ministry (http://www.novayagazeta.ru/inquests/48714.html).

In an article published on 1 April 2012, called “VAT”, Roman Anin described how the same officials were involved in even more fraudulent VAT rebates, with the total amount of stolen funds reaching $800 million, and the role of Interior Ministry in abetting them(http://www.novayagazeta.ru/inquests/51924.html).

Roman Anin further uncovered how millions of dollars stolen by the corrupt criminal conspiracy exposed by Sergei Magnitsky were laundered via Russian banks and numerous European jurisdictions, including Austria, Switzerland, Cyprus, Finland, Estonia, Latvia, Lithuania and others (http://www.novayagazeta.ru/inquests/53950.html).

In the article called “Beneficiaries” published on 13 August 2012,  RomanAnin wrote:

“This crime stopped to be an internal affairs for Russia at the momentwhen the first stolen dollar crossed the Russian border and appeared onaccounts of Western banks for legalisation.”(http://www.novayagazeta.ru/inquests/53950.html)

Roman Anin majored in journalism at Moscow State University (MSU) and graduated in 2010. After graduating, he studied at the Institute of Oriental Studies of the Russian Academy of Science as a Ph.D. candidate in global economics. In 2012, he received three of the most prestigious awards in Russian investigative journalism: the Artem Borovik award, the Youlian Semenov award and the Andrey Sakharov award (http://www.icfj.org/roman-anin).

The 2013 Knight International Journalism Award award is supported by the John S. and James L. Knight Foundation which advances transformational ideas that promote quality journalism following the belief that democracy thrives when people and communities are informed and engaged.

For further information, please see:

Law and Order in Russia

by Tony Iozzo
Impunity Watch Reporter, Europe

MOSCOW, Russia — The Duma, Russia’s lower house of parliament, voted to approve bills that would ban promoting homosexual “propaganda” to minors and punish those who offend religious believers, on Tuesday.

Before the vote was to take place, hundreds of anti-gay and religious activists and gay-rights activists gathered outside the State Duma, across from the Red Square in Moscow to voice their concerns. Fighting erupted between those that supported the bills and those that did not. Eggs and urine were tossed between the groups, and eventually 20 people were detained by police.

The anti-gay bill, which was approved by the Duma by a unanimous vote of 436 to 0, will imposed fines to individuals who provide information about the LGBT community to minors or who hold gay pride rallies. An individual would be fined up to $156 and organizations would be fined up to $31,000. The bill would also apply to foreigners that come into Russia.

The anti-gay bill is part of a larger Russian effort to promote traditional Russian values as opposed to Western liberalism, as the Kremlin and the Russian Orthodox Church view the latter as corrupting Russian youth and greatly enhancing the protests against Vladimir Putin’s presidency.

The bill was preliminarily approved in January; however legislators then altered the wording of “homosexual propaganda” to “propaganda of nontraditional sexual relations.”

As the bill was passed by the Duma, it now needs to be passed by the Federation Council, which is the Russian Senate, and signed by the President. This process is considered a formality, however, and the bill is expected to become law by the end of June.

Hostility and violence towards LGBT communities is common in Russia, and human rights activists believe this bill will contribute to an even greater increase in these incidences.

“The draft law would only raise the level of intolerance in Russian society,” reported Human Rights Watch.

Yelena Mizulina, the head of the Russian State Duma’s Committee for Family, Women, and Children, however, believes that the law is a positive step to protect traditional family values. “[The bill prevents] the spreading of information aimed at forming nontraditional sexual attitudes among children, attractiveness of nontraditional sexual relations, or a distorted perception of social equality between the traditional and nontraditional sexual relations,” she stated.

The Duma also passed a bill Tuesday that would impose prison time on those found to be insulting religious believers. This bill would include prison terms of up to one year and fines of up to $9,000. The bill came to light after members of the punk rock band Pussy Riot sang a ballad against President Putin in a cathedral in Moscow last year.

“This is another step in the attack on the right to freely express your opinion, a right guaranteed by the constitution of the Russian Federation,” a researcher at Human Rights Watch opined.

For more information, please see:

Aljazeera – Russian legislators pass “gay propaganda ban” – 11 June 2013

BBC – Russian Duma passes law banning “gay propaganda” – 11 June 2013

Los Angeles Times – Russian lawmakers move to keep information on homosexuality from kids – 11 June 2013

The Moscow Times – Law on “Homosexual Propaganda” Set for Duma Approval – 11 June 2013

Radio Free Europe, Radio Liberty – Russian Duma Passes Ban on “Homosexual Propaganda” – 11 June 2013

 

By Ben Kopp
Impunity Watch, Europe

SARAJEVO, Bosnia – On June 6, 2013, approximately 3000 protesters kept nearly 1500 lawmakers, government employees, and international bankers blocked inside Bosnia’s parliament building for fourteen hours. The protesters consisted primarily of students and young parents, who have been unable to get birth certificates or identification numbers for their babies since February 2013.

Dating back to the 1992-1995 war, ethnic divisions between Serbia and Bosnia heat the battle between a unified or divided country. Currently, Bosnia consists of two semi-autonomous mini-states, each with a president and parliamentary government. A joint parliament, government and a three-member presidency link the mini-states.

In early February 2013, an old law on identification numbers for Bosnian citizens lapsed. Disagreements among ethnic communities have delayed the creation of a new law, leaving undocumented babies born since the lapse. While Bosnian Serbs seek an identification system that reflects territorial agreements established after the war, Bosniaks and Croats seek a solution that unifies the country.

Recently, a baby in need of stem cell treatment in Germany could not leave Bosnia because she had no documentation. On June 5, young parents protested and trapped lawmakers inside parliament. Although the government reached an interim deal, protesters claimed that they would continue for as long as necessary to reach a long-term agreement. Every hour, more people joined the blockade. On June 6, thousands of protesters formed a ring around parliament, encouraged by protests in other Bosnian cities.

As parliament employees attempted to escape the building through windows, protesters shouted, “Get back to work!” before sending them back inside.

Tarik Celik said, “This is not just about the ID number. It is about their attitude toward us. It is about how unimportant we are to them as citizens.”

Additionally, parliament salaries angered protesters. Reports claim that lawmakers receive six times Bosnia’s average salary per month. However, poverty throughout the country has increased, and the unemployment rate hovers above twenty percent.

On the morning of June 7, police helped free the people trapped inside parliament, who decided to return after the weekend. Nevertheless, within hours, student protesters returned, and demanded improvements for impoverished citizens, rather than “ethnic bickering.”

“We just want to send a message to the politicians not to play with our future,” said protester Amar Nurkovic, “because their future is in our hands.”

Peter Sorensen, the head of the European Union mission in Bosnia, stated that such protests were “a clear demand on elected officials in Bosnia-Herzegovina at all levels to do what they have been elected to do — work in the interests of the citizens.”

As demonstrated in Sarajevo during a recent commission meeting, Bosnia and Serbia currently support each other on their path toward EU membership. For stability in the region, the Bosnian delegation emphasized a need for progress.

While Serbia appears to support EU membership for Bosnia, it appears that progress will be delayed until the government agrees to unify or divide the country. Only then can economic and social woes be fully addressed.

For further information, please see:

EuroNews – Parents in Bosnia in Birth Registrations Protest – 7 June 2013

Radio Free Europe Radio Liberty – Bosnian Police Evacuate Parliament Besieged by Protesters – 7 June 2013

Reuters – Protesters Allow Out Bankers, Lawmakers Trapped in Bosnian Parliament – 7 June 2013

Westport News – Bosnian Lawmakers Take Early Weekend after Siege – 7 June 2013

Bloomberg Businessweek – Thousands Protest Lack of Bosnian Law on ID Numbers – 6 June 2013

InSerbia News – Serbia and BiH Support Each Other on EU Path – 5 June 2013