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Nashi Hroshi | 21Dec2013 | Daria Kaleniuk, Halyna Senyk, Executive
Director, PEPWatch [07:39,
Ukr, Eng. subtitles]
Are EU banks doing
business with Ukraine's crooked politicians?
Euro Maidan Win·1
Published on 21 Dec 2013
[00:00 -- 00:53]
Hroshi [Our Money]: Sanctions. One of the most frequently
heard words in Ukraine today.
People are talking about sanctions, hoping for sanctions, and counting
on sanctions. We're talking about special measures by the United States
and countries in Europe that will affect the finances of those in power
in Ukraine. After all, despite their great love for Russia, they all
keep their money in European banks. And its through European companies
that our top officials pay for their lives of luxury in Ukraine.
Apparently, it's more reliable that way. But as our colleagues in the
Anti-Corruption Action Center in Ukraine told Nashi Hroshi [Our Money],
really not necessary in order to relieve our top dogs of all their
assets. In European countries, all the necessay legal instruments are
already in place ... all that's needed is the will. For a video lecture
on how to move Viktor Yanukovych from his luxury compound Mezhyhiria to
a Khrushchev-era 2-room in his rundown hometown of Yenakievo, keep
[00:54 -- 01:19]
Hectares of premium land surrounding luxury villas, private jets,
luxury cars -- that entire posh lifestyle that is taken for granted by
Ukraine's political and business elite is paid for, of course, through
foreign accounts. Love Russia all you want, but keep your own cash
somewhere safe. Still, perturbed by the brazenness of Ukraine's
officials, Europe is gradually beginning to understand that some of
that money not only smells, it positively stinks.
[01:20 -- 02:07]
Kaleniuk, Director, Anti-Corruption Action Center: We have
a way for the law enforcement agencies in Europe and the U.S. to find
assets and bank accounts that our business and political elite hold
abroad. While Ukrainians keep waiting for sanctions and for bank
accounts to be frozen, the folks at the Anti-Corruption Action Center
discovered that to freeze the accounts of companies that are controlled
by Ukraine's powers-that-be, no sanctions are needed at all. All that
is needed is the desire and the knowledge that the money that these
companies are using was gained by corrupt schemes. There's an
instrument called International Standards on Combating Money-Laundering
that states that banks are forbidden to work with corrupt foreign
[02:08 -- 02:31]
Hroshi: European legislation contains a concept called
Olexandr Yanukovych. He's a definite PEP. Premier Azarov, an elderly
PEP. National Security Council Secretary Andriy Kluyev and his brother
Serhiy, two PEPs. Ukraine's entire Cabinet of Ministers, all PEPs. The
Verkhovna Rada? Nothing but PEPs. And then there's the
President of Ukraine, Viktor Yanukovych, the ultimate PEP.
[02:32 -- 03:46]
Kaleniuk: Banks are supposed to figure out whether a
client is a
PEP or not, PEP being a new concept meaning Politically Exposed Person.
Someone who is politically engaged. Under the term come all the heads
of Ministries, members of the Verkhovna Rada, judges of higher courts
-- and, of course, their close relatives: sons, brothers, wives ... and
business partners. A bank that has determined that their client is a
PEP is obligated to then determine the source of the money that the
client is placing. If any suspicions are raised at the bank about the
legitimacy of the source of this money, the bank is supposed to refuse
to work with that client. That's first. Secondly, the bank should
report on suspicious activities, called a Suspicious Activities Report,
to the country's financial oversight agency.
[03:47 -- 04:19]
Hroshi: Now for the most interesting bit. Ukraine's
basically don't earn much money that isn't suspicious. If the son of
the president, Oleksandr Yanukovych has seen his wealth increase by
7,280% in the three years since his father took office, that's
suspicious. If his father suddenly lives in luxury on 136 hectares of
prime real estate, that's also suspicious. There are plenty of reasons
to look into those European companies to which money is transferred
from Ukraine and from which presidential luxuries are later paid.
[04:20 -- 04:32]
Senyk, Executive Director, PEPWatch: Only you have to
that, in order to own Mezhyhiria, Sukholuchchia and other such estates,
Yanukovych used a foreign agent to launder his money.
[04:33 -- 04:52]
Hroshi: Luckily, such a foreign agent exists. His name is
Reinhard Proksch. He's a lawyer, a resident of the U.S. and the
director of several European firms that have direct links to some of
Ukraine's main 'Eurointegrationists': Viktor Yanukovych, the Kluyev
brothers, and the Azarov family.
[04:53 -- 05:00]
Senyk: Mezhyhiria, Sukholuchchia, the helicopters, the
they're all connected to a single individual abroad.
[05:01 -- 06:11]
Hroshi: Lawyer Proksch in fact stands at the pinnacle of
assets linked to Yanukovych, Azarov and the Kluyevs ... and brings the
entire web together. How? Reinhard Proksch runs three companies:
P&A Corporation, Blythe Europe and Astute Partners. Let's start
with the last one. Astute Partners has a stake in TOV Dim Lisnyka
[Forester House Ltd], the very company that was granted the hectares
that are known as Sucholuchchia, eventually taking over the entire
forestry territory and building Yanukovych's private hunting preserve
there. From Dim Lisnyka, the link goes directly to Mezhyhiria, which is
primarily linked to the company Tantalit, which was owned by Blythe
Europe and whose director was that very same Proksch. Not long ago,
Tantalit was bought out by Party of Regions MP Serhiy Kluyev,
confirming the close partnership between the Kluyev brothers and the
president. The Kluyevs, of course, also make use of Proksch's
services. P&A, which Proksch once ran, has a controlling stake
in Activ Solar GmbH, a Kluyev business involved in building solar panel
farms. And the Proksch group also controls the company that owns the
home of Oleksiy Azarov, the premier's son. Of course, it's far more
modest than Mezhyhiria, but it's located in Vienna.
[06:12 -- 06:38]
Senyk: Proksch is that person who, like Kirichenko, can
light on just how all that money belonging to Ukraine's political upper
crust was laundered. Based on that, we were able to show to what extent
these people -- the premier, vice premier and president -- all used the
services of a single person, and without any doubt, this one person
could tell us exactly how this money was being laundered.
[06:39 -- 07:03]
Hroshi: Freezing the accounts of the companies controlled
Proksch will lead to a chain reaction, because we're not talking just
about the companies directly in this corrupt network. A freeze will
also hit those companies to whom money was being transferred. And so
poor Viktor Yanukovych might not be able to buy his next crystal
chandeliers and Party of Regions faithful Kluyev and Azarov won't be
able to pay the utility bills on their Austrian estates.
[07:04 -- 07:21]
Kaleniuk: We propose that EU countries, EU politicians and
politicians make use of those instruments that are already in place.
All they need to do is to uphold their own laws! Laws that forbid their
banks to do business with corrupt politicians.
Hroshi: With just a little bit of political will, Europe
easily make this winter the coldest one yet for Ukraine's grandees, no
matter what Russia has promised.