Issue link: https://maltatoday.uberflip.com/i/871892
11 maltatoday, SUNDAY, 10 SEPTEMBER 2017 News Azerbaijani Laundromat includes two Malta firms MATTHEW VELLA TWO Malta-registered compa- nies have been featured in the extensive global network through which money from an Azerbaijan slush fund passed. The data features in revelations published by the OCCRP (Or- ganised Crime and Corruption Reporting Project) into the so called 'Azerbaijani Laundromat', a complex money-laundering op- eration that handled €2.5 billion over a two-year period through four shell companies registered in the UK. From 2012 to 2014, the money was used by the country's ruling elite to pay off European politi- cians, buy luxury goods, launder money, and otherwise benefit themselves. During the same time period, the Malta company Vostok Media Exchange Ltd was used to pro- cess a total of €438,000 in nine separate payments to an English company, Metastar Invest LLP; while Metastar paid another Mal- tese company, Wise Holding Ltd, €9,510. Vostok Media Exchange was set up in Malta in 2009, and its own- ership is vested in PGM Group SA, which is registered in the tax haven of the British Virgin Is- lands. Its directorship is held by the Swiss fiduciary services firm Comatrans. On its part, Wise Holding's ownership is vested in a Polish firm while its directorship is held by Polish residents in Malta with similar other directorships in Malta-registered firms. There is so far no information as to what the payments were for. According to the investigation by the OCCRP and newspapers such as The Guardian, the money laundering network used four UK shell companies, one of which was Metastar Invest. Its HQ was registered at a service address in Birmingham but ultimately con- trolled by a company in a tax ha- ven. Records show that the now dis- solved Metastar was run by two "members": Advance Develop- ments Ltd and Corporate So- lutions Ltd, also dissolved and based in Belize. In turn Metastar controlled other companies, such as Armut, which is alleged to have siphoned €192 million of funds paid by the hedge fund Hermitage Capi- tal Management to the Russian treasury. This particular scandal involved an organised Russian criminal syndicate, the Klyuev Group, which, it is claimed, has stolen at least $800m from the Russian people with the aid of the Russian government. Sergei Magnitsky, a lawyer working for Hermitage, blew the whistle on the scandal – only to be imprisoned in Russia, and alleg- edly tortured in a bid to withdraw his testimony. While in prison he developed gallstones, pancreatitis and a blocked gall bladder. A hu- man rights council set up by the Kremlin found that he was physi- cally assaulted shortly before his death, which was the direct result of being denied urgent medical care needed to treat his condi- tions. The scandal has only reinforced the perception of corruption at the heart of gas-rich Baku, where the Aliyev dynasty has held sway since the fall of communism. In a more recent case, an Ital- ian MP was found to have taken bribes to issue favourable reports on Azerbaijan at the Council of Europe. Italian prosecutors ac- cused Luca Volontè, the former chair of the centre-right group in the Council of Europe's par- liamentary assembly, of accept- ing millions of euros in cash from Azerbaijan in exchange for sup- porting its government, which has been heavily criticised for subverting elections and jailing journalists and opponents. Azerbaijan is often accused of "caviar diplomacy", using cash and gifts to buy influence – charg- es first detailed by the European Stability Initiative think-tank in 2012. The council notably voted down a critical report on Azerbai- jan's political prisoners in 2013. Former Labour MP Joe Debono Grech, a member of the Council of Europe's parliamentary assem- bly who was a rapporteur on vari- ous reports on Azerbaijan, had denied ever receiving gifts from Baku. He also had told this newspa- per that a speech at a 2015 CoE assembly was misinterpreted. "I do not condone dictatorships," Debono Grech had told Malta- Today, adding that Azerbaijan is "not a democracy". But he was adamant that Azer- baijan could not be turned into another Libya. While admitting that "nobody approves of unwarranted arrests," Debono Grech described the situ- ation as "complex" and echoed Azerbaijan's arguments that there is no clear definition of what con- stitutes a political prisoner. Way back in 2012, a report by the South East Europe think- tank, European Stability Initia- tive (ESI), had already included Debono Grech among the list of Azerbaijani apologists, for failing to flag irregularities in the 2010 and 2013 elections in which Il- ham Aliyev consolidated his grip on power. Debono Grech, who served as co-rapporteur for six years, dur- ing which he visited Azerbaijan some 30 times, denied ever re- ceiving gifts from the Caucasian dictatorship. "I can only vouch for myself, but I never received any gifts," Debono Grech said, who even as consultant to the Gozo minister had refused any remuneration for his role. Over €440,000 passed through Malta firms for UK shell company employed in Azerbaijani slush fund Hilux LCM Meta- star Polux €2.9bn USD PAYER BENEFICIARY DATE 113,447 VOSTOK MEDIA EXCHANGE LTD MT METASTAR INVEST LLP GB 2014-05-27 105,720 VOSTOK MEDIA ECHANGE LTD MT METASTAR INVEST LLP GB 2014-02-06 72,848 VOSTOK MEDIA EXCHANGE LTD MT METASTAR INVEST LLP GB 2013-09-10 69,457 VOSTOK MEDIA EXCHANGE LTD MT METASTAR INVEST LLP GB 2013-11-14 57,726 VOSTOK MEDIA EXCHANGE LTD MT METASTAR INVEST LLP GB 2013-07-05 31,613 VOSTOK MEDIA ECHANGE LTD MT METASTAR INVEST LLP GB 2013-01-25 27,540 VOSTOK MEDIA ECHANGE LTD MT METASTAR INVEST LLP GB 2013-01-23 25,846 VOSTOK MEDIA EXCHANGE LTD MT METASTAR INVEST LLP GB 2013-05-31 21,233 VOSTOK MEDIA ECHANGE LTD MT METASTAR INVEST LLP GB 2012-10-15 11,391 METASTAR INVEST LLP GB WISE HOLDING LIMITED MT 2013-08-23 Azerbaijani ruler Ilham Aliyev and his wife Mehriban: the family dynasty has held power since the fall of Communism. The Azeri slush fund used UK shell companies to then pay off bribes to European politicians, like Italian MP Luca Volonté (left)