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Report: Russian “Black Money” in the EU

18 December 2015

The Expert Group on Fighting Transborder Corruption of the EU-Russia Civil Society Forum, in which NHC Associate Policy Director Harry Hummel takes part, issued a new report with two new case studies on investments of Russian companies in the European Union: the Nord Stream project and the Transmashholding company. The case studies document a range of questionable practices of these companies and raise questions about the role of business and individual counterparts in the European Union.

The North Stream project is a gas pipeline in the Baltic Sea implemented by a Russian-German-Dutch business consortium, with a majority share of Gazprom. The case study relates how high-level politicians in Russia and Sweden were involved in the project both while serving in official positions and after that. Questions are also raised over financial support given by the company to Swedish groups originally opposing the project, and on the extremely high costs of the Russian part of the pipeline. This case study was written by Grigory Pasko of the Foundation 19/29, a Russian investigative journalism group.

Transmashholding is the largest Russian company in the field of transport engineering. Its owners can be linked to Russian politicians who exercise influence over tenders in which the company is involved, to French engineering company Alstom and to criminal elements who have been accused of money laundering in Italy and Spain. The company’s shares are owned by a Netherlands-registered company. The author of this case study is Konstantin Rubakhin of the ‘Save Khopyor’ movement, a protest of citizens against nickel mining in the southern Russian ‘black earth’ region.

The full title of the report is Russian “Black Money” in the EU: Indicators of Transborder Corruption. The launch of the report took place on 9 December in Budapest and it was presented at the Anti-Corruption Festival organized by the Hungarian chapter of Transparency International. “Corruption became a global appearance overcoming borders, following business, financial, and technological channels,” pointed out in his speech at the conference Andrei Kalikh, Coordinator of the Expert Group. “In the last 20 years, dozens of non-transparent projects have been implemented between Russia and EU countries. They allowed European thieving businessmen to earn “easy money” in Russia, while Russian officials could initiate money laundering in Europe. Transborder corruption contributed to erosion of democratic institutions and establishment of the totalitarian regime in Russia. Should you ask me, what to do to draw nearer democratic reforms in Russia, I would reply to it with an appeal to participate in fighting transborder corruption between our states.”