One of the biggest scandals in Europe, the 200 billion euros money-laundering case at Denmark’s largest bank, has really shaken the EU. It seems impossible that the scandal as big as this one went undetected for so long allowing it to reach such staggering numbers. This is something that Věra Jourová, the European commissioner for justice, found shocking and has summoned ministers from Denmark and Estonia to help her get to the bottom of the case.
The laundering of Russian, Azerbaijan and some other countries’ money has been taking place at the Estonian branch of Danske Bank, which is Denmark’s largest bank. European Union responded to this scandal by introducing even tighter policies in order to fight money laundering in Europe. These policies are mostly targeting banking system, but recently freeports – a type of tax-free zones in which luxury items such as fine arts, rare wines, classic cars, etc., are stored – were put under the spotlight as well.
MEPs on a special European Parliament committee on financial crime and tax evasion found freeports could enable money laundering because they circumvent the standard international rules on transparency. De facto, freeports are offshore bank accounts for hard assets and valuables; they allow to keep anonymity behind the shell companies and execute financial transactions with almost no traces. MEPs even urged to close all freeports in EU.
Two EU freeports specifically mentioned in EU Parliament report are Geneva and Luxemburg. Both are owned by controversial Swiss art dealer Yves Bouvier best known for “Bouvier affair” – a massive art fraud worth billions of dollars. Bouvier is being sued by his former clients across the world. He is also being investigated in Switzerland for tax evasion. Yves Bouvier was accused of stealing Picasso’s paintings.
On the top of that, Le Freeport Luxembourg has been recently found to be linked to individuals involved in the so-called “Azerbaijani laundromat,” a $3-billion money-laundering operation through UK shell companies for unknown Azerbaijan officials. Some of this money was used to pay lobbyists, buy influence and media in the EU.
Luxemburg Freeport CEO Phillipe Dauvergne, a former French customs top official, in 2008 – 2018 sit on board of at least dozen EU-based companies affiliated with an Azeri businessman.
Khagani Bashirov. In his turn, Khagani Bashirov is a close associate of Jahangir Hajiev, former chairman of International Bank of Azerbaijan (IBA), and a key figure in Azerbaijani laundromat. Hajiev was sentenced to 15 years on charges of fraud, embezzlement, and misappropriation of public funds and his wife Zamira Hajieva became the first recipient of an unexplained wealth order under a new UK anti-corruption law. According to an investigation of Azerbaijan branch of US-funded RFE/RL, Bashirov’s companies were a big part of the laundromat and received at least $200 mln in loans from IBA which were never returned.
- Burke Files, the president of the American Anti-Corruption Institute in Tempe, Arizona, said that he’d seen the wire transfers of the Danske bank transactions. A certain amount of the Azeri money was paid for the strategic communications work in Washington, DC. However, the other part was used to bribe EU officials.
In 2016, questions about the illegal work at the Danske Bank started to arise. Stories about the bribes offered to the members of PACE, the Parliamentary Assembly’s Council of Europe, were making rounds arousing suspicion, but no evidence of foul play was found. The bribes, including prostitutes, cars, and vacations, were offered for the PACE members to keep quiet about the Azerbaijan business and give the country positive reviews on the human rights record.
If all of this weren’t suspicious enough, in 2017, Luca Volonte, the Italian member of European Parliament, was under investigation as it was suspected that he was accepting a bribe, over 2 million euros to be exact, from Azerbaijan. The funds mainly came through the British company Hilux Services LLP and its account in an Estonian bank, from Baktelekom MMC which is a company lead by a businessman that was linked to the first family of Azerbaijan.
Further investigation led to the belief that the scheme could be, in fact, much bigger than the Volonte case.
In 2017, Spanish MEP Pedro Agramunt left the office once the group of three retired European judges proclaimed him negligent regarding the Azerbaijan scandal. Next, to Agramut, two other Spanish MEPs were also mentioned by the commission report, but the cases were nevertheless dropped by the end of the year.
Apparently, freeports are contributing to some €100 billion laundered each year in EU, and European watchdogs should tackle them. The question is will there be enough political will to phase them out?