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Russian mafia 'would win from Cyprus bailout'

The Local · 5 Nov 2012, 16:54

Published: 05 Nov 2012 16:54 GMT+01:00

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"The BND report shows who will profit most from the billions in European taxpayer funds -Russian oligarchs, businesspeople and mafiosi who have parked their illegal earnings in Cyprus," the magazine said.

The magazine reported that a large number of Russian businessmen have placed large sums of money in Cypriot banks, attracted by lower tax rates, even if Cyprus has shed its reputation as a tax haven since joining the EU in 2004.

In total, around €20 billion ($26 billion) was deposited in Cyprus in 2011 by Russian oligarchs, which is more than the island nation's gross domestic product of €17.8 billion, the BND report found.

These deposits will be guaranteed if a European bailout is approved to shore up the island's banks.

The BND, Germany's federal intelligence service, also accused Cyprus of continuing to provide opportunities for money laundering.

Cyprus government spokesman Stefanos Stefanou said the report that the

island was a money laundering centre was "slanderous" and aimed at "damaging" its reputation as a foreign investment hub.

"Cyprus has adopted and implemented high-level institutional frameworks in combating money laundering which is fully in line with EU law," Stefanou told


Nicosia had been congratulated for taking such action by the International Monetary Fund (IMF) and G20 countries.

Stefanou said Russian investment was due to the "attractiveness of Cyprus' financial system and the advantages of Cyprus such as having double taxation

treaties with many countries including Russia.

"This includes a system of information exchange between Cyprus and other countries which fully complies with international standards," added the spokesman.

Officially, Cyprus is sticking to all agreements on combating money laundering.The necessary laws have been passed and institutions have been set up.

But there are problems with their implementation and the rules are not being applied properly, the BND said in the report.

It said money laundering has been facilitated since Cypriot authorities made it easy for rich Russians to obtain citizenship.

Story continues below…

The BND said 80 oligarchs had managed to gain citizen access to the entire EU in this way.

On Monday, a spokesman for the German Finance Ministry told a regular news briefing that the issue of money laundering would be discussed between Cyprus

and the so-called troika of international creditors, the EU, the IMF and the European Central Bank (ECB).

Both the ECB and the EU Commission in Brussels declined to comment on the magazine report.


The Local (news@thelocal.de)

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Your comments about this article

17:49 November 5, 2012 by michael wind
cyprus is the new home of european russian mafia,the distribution of heroin and cocaine and extasy jointly with israeli mafia.
18:01 November 5, 2012 by smart2012
Silly article from spiegel, to again go against Europe and push populistic German über alles propaganda.. Spiegel maybe forgot that gazprom is one of key gas suppliers of Germany, plus sponsor Schalke 04... How would they describe gazprom???
21:45 November 5, 2012 by sonriete
Germany herself has laws granting almost instant citizenship to Russians who have ethnic German origin since the time of the Kaisers, as well as newer laws granting the same to Jews from the former Soviet Union, dating to the time of Helmut Kohl.

Sounds to me like the pot calling the kettle black.
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