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Russia Reform Monitor - No. 2129

How Russian elites wash their dirty money;
The true cost of Syria

Edited by Amanda Azinheira, Kaitlyn Johnson and Garrett Lynch
April 26, 2017


March 20: 

Russian elites have been laundering tainted money through western banks (such as HSBC and the Royal Bank of Scotland) in a scheme the Organized Crime and Corruption Reporting Project (OCCRP) has dubbed "the Global Laundromat." 
According to London's Guardian newspaper, the money laundering scheme is only one of several organized criminal operations that have allowed Russia's rich to funnel money out of the country. The complex nature of the scheme has made it nearly impossible to track down the close to 500 individuals involved, making it one the most successful money laundering frauds in recorded history. 

March 21:

In a bid to further expand its role in the Middle East, Moscow has offered to host peace talks between Israeli and Palestinian officials. 
According to Sputnik, leaders from both sides support Russia's idea in principle, but have not yet agreed on a date for the long-running negotiations to resume. The Kremlin, however, is leaving the door open to play peacemaker; Russian Deputy Foreign Minister Mikhail Bogdanov has announced that the offer still stands, and has urged the two countries to pick a specific date to recommence contacts. 

March 22:

The Moscow Times reports that Ukraine's National Security Service (SBU) has formally banned Russian singer Yulia Samoylova from traveling to Ukraine, thereby preventing her from competing in the upcoming 2017 Eurovision Song Contest scheduled to take place in Kyiv this May. Samoylova had been selected by Russian state television network Channel One to be the country's official representative to Eurovision. But Ukrainian officials cited Samoylova's 2015 visit to Russian-annexed Crimea, where she performed at a concert, as a violation of Ukrainian sovereignty. Jon Ola Sand, the European Broadcasting Union's executive supervisor for the contest, said Eurovision would "fully respect and observe" the laws of Ukraine. 

March 23:

Anti-Kremlin politician Denis N. Voronenkov has been killed in Kyiv in an apparent political assassination, 
reports the New York Times. Voronenkov, a former member of the Russian Parliament, together with his wife Maria Maksakova, defected to Ukraine last year in order to escape possible political persecution in Russia. At the time of his death, the Putin critic was slated to testify against Viktor Yanukovych, the former pro-Russian president of Ukraine.  

While Kyiv police have yet to determine the motive behind the killing, Ukrainian President Petro Poroshenko was quick to accuse the Russian government of the assassination. Ukraine's prosecutor general, Yuri Lutsenko, suggests that the killing could have been an effort to prevent his testimony against Yanukovych, or to hide his knowledge of money laundering activities within Russia's Federal Security Service (FSB). 

The Russian government has systematically understated the number of casualties it has incurred in Syria. The Kremlin claims to have lost five Russian servicemen since January 29th, but in reality, at least eighteen Russians were killed in the efforts to recapture the city of Palmyra. The conclusion, initially reached by a group of investigative bloggers, has been independently verified by Reuters reporters, who spoke to people who personally knew the deceased fighters. 
According to Asharq Al-Awsat, the low-ball estimate could be an attempt by President Vladimir Putin to shore up support in advance of his 2018 reelection bid. It could also reflect a technicality, since most of those killed were not enlisted soldiers, but rather contractors under the command of military leaders, and the Russian government has not recognized the presence of contractors in the fight against ISIS in Syria. 

March 24:

Russia has revised both criminal and administrative laws to expand the legal definition of bribery. 
According to The Moscow Times, the new standard will now encompass the use of favors and other nonmaterial benefits. Amendments to current laws and codes will be unveiled in April of this year. The changes are a response to suggestions made by the Group of States Against Corruption (GRECO), of which Russia has been a member since 2007. However, Ilya Shumanov, the deputy head of Transparency International Russia, has said that enforcement of the new standard will be difficult due to a more onerous burden of proof, but that an expanded definition is still worth implementing.


Related Categories: Russia; Russia and Eurasia Program

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