• Germany's news in English
 
app_header_v3

Russian mafia 'would win from Cyprus bailout'

The Local · 5 Nov 2012, 16:54

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

"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

reporters.

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.

AFP/mbw

The Local (news@thelocal.de)

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.
Today's headlines
Air Berlin to cut 1,200 jobs and halve airline fleet
Photo: DPA.

Struggling Air Berlin, Germany's second-largest airline, announced on Wednesday a major restructuring plan that shrinks its fleet and cuts 1,200 jobs.

Germany's 10 most Instagram-able places
Photo: Thomas Wolf/Wikimedia Commons.

From stunning chalk-white cliffs to fairy tale castles, Germany has some breathtaking sights to see, perfect for social media.

Train evacuated as passenger flips out during ticket check
Police at the scene in Leipzig. Photo: DPA

A regional train was evacuated in Leipzig on Wednesday after a passenger became aggressive during a ticket inspection.

Man arrested in Wuppertal as part of Spanish Isis raids
Police detain the suspect in Wuppertal. Photo: DPA

Police have arrested five suspected members of an Isis cell in Spain, Belgium and Germany that spread propaganda for the group online, the Spanish interior ministry said Wednesday.

Germans cut home energy usage by six percent in a year
Hamburg at night. Photo: DPA

The Energiewende is the German government's ambitious policy of drastically reducing carbon emissions. New figures show one remarkable success.

Merkel party MP under fire for using Nazi propaganda term
Bettina Kudla. Photo: Büro Bettina Kudla MdB/DPA.

A member of Angela Merkel's conservative CDU party is in hot water after tweeting over the weekend a Nazi propaganda term in her criticism of the country’s refugee policies.

Govt denies planning bailout for troubled Deutsche Bank
Photo: DPA

Germany's finance ministry on Wednesday said the government was "not preparing rescue plans" for Deutsche Bank, denying a newspaper report that state aid was being considered for the embattled lender.

Munich at high risk of housing bubble: report
A view of Munich. Photo: Pexels.com

Considering buying property in Munich? This report might make you think twice.

After fatal hail storm, south Germany set to see sun
The hail storm in Baden-Württemberg on Monday night left the streets looking like a winter landscape. Photo: DPA.

A hail storm in southwest Germany on Monday night led to the death of one woman, but forecasters predict a bit more sun in the days to come.

Police shoot dead father who attacked daughter's abuser
Police at the scene of the shooting in Berlin. Photo: DPA.

Berlin police on Tuesday night shot and killed the father of a young girl at a refugee home as he tried to attack a man who allegedly sexually abused his daughter.

Sponsored Article
The Inner Circle: the secret to dating in Berlin
Lifestyle
15 pics that prove Germany is absolutely enchanting in autumn
Sponsored Article
Why Jordan is the ‘Different’ East
Lifestyle
10 German films you have to watch before you die
Lifestyle
6 things about Munich that’ll stay with you forever
Lifestyle
10 pieces of German slang you'll never learn in class
Sponsored Article
Retiring abroad: ensuring your health is covered
National
Seven great reasons to stay in Germany this September
National
Ouch! Naked swimmer hospitalized after angler hooks his penis
National
Six reasons why Berlin is now known as 'the failed city'
National
15 tell-tale signs you’ll never quite master German
Sponsored Article
Life in Jordan: 'Undiscovered treasure'
Culture
7 American habits that make Germans very, very uncomfortable
Rhineland
Story of a fugitive cow who outwitted police for weeks before capture
Sponsored Article
The Inner Circle: the secret to dating in Berlin
Culture
Eleven famous Germans with surnames that'll make your sides split
Lifestyle
The best ways to get a visa as an American in Germany
Gallery
Germany's 17 Olympic gold medals in pictures
14 facts you never knew about the Brandenburg Gate
Society
Ten times Germans proved they really, really love beer
National
Six things you need to know when moving to Germany
Travel
These 10 little-known German towns are a must see
International
German scientists prove birds can sleep while flying
Technology
London v. Berlin: Which is better for startups?
Lifestyle
13 mortifying mistakes German learners always make
Travel
Enter if you dare: Berlin's best abandoned haunts
Lifestyle
10 rookie errors all Brits make when they arrive in Germany
6,545
jobs available
Toytown Germany
Germany's English-speaking crowd