The European Union financial crimes office opened a mega-investigation against the RCB (Russian Commercial Bank) for its closeness to the Kremlin
By
George Chaya< /i>
A branch of the Russian-owned RCB bank in Nicosia, Cyprus.
While military operations continue in Ukraine, one of the four largest banks in Cyprus announced that it is canceling its financial and banking operations due to the geopolitical crisis generated by the Russian invasion. The bank had already warned of a cut in its financial operations at the end of March.
Suspicion about the RCB (Russian Commercial Bank) due to its proximity to the Kremlin has been in force since its foundation, the origin of its capital has always been kept strictly secret. This week, the financial crimes office of the European Union opened a mega-investigation that blocked the financial engineering with which that Bank operated in favor of Moscow for almost three decades, hiding its links with Vladimir Putin, especially after the invasion of Ukraine. The current investigation exposed the activity of the RCB executives and their link to the Russian president. It was also verified that all its directors obtained Cypriot nationality and have Cypriot passports.
According to European intelligence agencies, the bank was a curtain to evade economic sanctions on Russia and surreptitiously move billions of dollars from Putin’s oligarchs and loan sharks to prevent that mass of money from being frozen and/or confiscated by the West.
The RCB tried to give -from the beginning of its operations- an image of a totally European Bank and had changed the original name with which it was founded to that of Russian Commercial Bank Cyprus. However, 80% of the RCB was owned by the VTB Bank of Russia, whose belonging to the government of Vladimir Putin was known, and the remaining 20% was in the hands of the capital of oligarchs and figureheads of the Russian president himself. According to the financial investigations office of the European Union (EU), Russia’s total direct investment in Cyprus amounted to an estimated 200 billion dollars.
Russian President Vladimir Putin
The RCB’s financial ties and Russian money are historic in Cyprus, a country in which Russia has invested the most in the last 20 years, mainly through financial engineering that it allowed to hide billions of dollars that constituted Kremlin assets that had been able to evade economic sanctions.
In relation to Cyprus, thousands of Russian citizens reside in that country, the EU speculates that there are approximately 40,000, which is relevant if one considers a total Cypriot population of around 1,300,000 inhabitants. A large number of Russians live in Larnaka, the most important and least controlled financial center in Europe in terms of banking transparency and money laundering. Another center of residence for Russian citizens is Limassol, an important port city in the country that is even called Limassolgrad (in the Russian language) due to the number of Russians who live there.
A reserved source from the EU confirmed to Infobae the existence of a document in Brussels that reveals the movements of the RCB to hide its true legal ownership and also the Russian bankers who work in it, syndicating them as Cypriots.. This modality of hiding financial operations such as the identity and citizenship of its directors became urgent actions for the Bank when the EU and US sanctions began to be extended after Putin’s forces invaded Ukrainian territory on February 24 past.
Knowing of the Kremlin’s plans to invade Ukraine, the RCB announced that the 47% percent stake in VTB’s share package would be bought by 2 Cypriot companies that already held shares in the Bank. Thus, Moscow planned to distance the RCB from Russia, but the Kremlin was unsuccessful -although it changed the entity’s board and management- because its operations had been detected by international financial intelligence agencies.
The company that bought the majority of the shares of VTB is called Crendaro Investments Limited and is registered in Cyprus, but it was established that it is a deceptive maneuver since its majority shareholder is a Russian executive director of the same VTB bank and linked to the sanctioned Russian millionaire Román Abramovich, former owner of the English League Chelsea Football Club. , who would also hold a Cypriot passport (in addition to Russian, Portuguese and Israeli citizenship) as would 30 other RCB staff who obtained Cypriot passports between 2011 and 2019, according to a German intelligence report made public on Tuesday. the European press and was not denied by the government of Cyprus.
The report also revealed that some 6,000 Russians have obtained VIP Cypriot passports through a citizenship-by-investment program in the country; the program automatically enables foreigners to obtain and obtain a passport and citizenship by investing or depositing sums of money that exceed five million US dollars.
One element of interest to the EU is that when the RCB changed its name from Russian Commercial Bank, it presented the move as one aspect of its new international positioning and its private operations in Cyprus. However, the regulators of the European Central Bank have been able to corroborate that the RCB’s links with the Kremlin are direct with the Russian state structure and not with private capital.
According to European officials specialized in Financial supervision issues: It is completely unusual for a Bank operating with positive income, with hundreds of stable employees to withdraw from the financial market and relinquish its license overnight. This maneuver is a clear indication that banking regulations failed in the controls determined by the European Central Bank. On the other hand, the VTB is a Russian state bank directly related to Vladimir Putin, as was demonstrated in 2018, when the Panama Papers were released. The leak of those international records showed incontrovertibly that Putin’s oligarchs and frontmen were in charge of the Russian Commercial Bank in Cyprus.
VTB incorporated Russian Commercial Bank Cyprus Limited almost 30 years ago, at a time when Moscow sought to improve its access to financial relations with Europe by taking advantage of Cyprus’s negligible tax rates after the Cypriot government adopted the euro as its currency in 2008. , the Bank opened branches throughout the country and with the opening -in 2010- of the Nicosia branch, a state visit was organized which was attended by the then president of Russia, Dmitry Medvedev, a partner and staunch ally of Putin, it was there when the Bank began to process its name change to RCB, which finally happened in 2013.
In 2014, after the VTB was sanctioned by the EU and the US. Given the Russian invasion of Crimea, financial ties with the Russians became a big problem for Cyprus, which deepened when Washington sanctioned a dozen members of the VTB board of directors in response to Moscow’s annexation of Crimea, including them on a list of people it defined as “business executives, partners and enablers of the Russian regime” . The sanctions notice added that VTB executives had “acted or purported to act behind the scenes for or on behalf of the Russian government.”
The VTB then had 100% of the RCB. But in 2009, when Crendaro Investments Limited acquired 40% of Banco Mitarva Limited, another unknown Cyprus company, from where in 2017 it is suspected that its undercover owner, the super millionaire Román Abramovich – now sanctioned and blocked in billions of Euros- turned the payments for the purchase of soccer players that he incorporated into his English soccer club, Chelsea; in what the EU now believes were money laundering operations on behalf of the Putin government by Abramovich, who is also the possible owner of Crendaro, a licensed investment company and trust service provider, allowing him to hold hidden shares in other companies in trust for their British, German, French and Italian clients. In this hidden financial operation, it was possible to detect that it was the Russian government that turned out to be the final beneficiary of Crendaro and RCB, with which the EU has no doubts that all the operations carried out by and for those financial and banking entities had as the final beneficiary the leadership of the Kremlin, which is the same as saying Vladimir Putin, and its purpose since 2014, was clearly to evade economic sanctions on Moscow.