Saturday, September 12, 2009
From Tanks to Spies to Banks – the European-Russian Bank
by Jiri Kominek
The expulsion of two Russian diplomats on August 17 by Czech authorities who accused the pair of spying came as a surprise to many Czech’s.
Locals often joke about how Russia has annexed the Czech resort of Karlovy Vary, but for the Czech intelligence services, the number of Russians suspected of being involved in espionage activities in the country is no laughing matter.
The Czech BIS security service and UZSI foreign intelligence service estimate that of the 200 Russian diplomats serving in the Czech Republic, two thirds are doing more than issuing visas. How many more are posing as businessmen or journalists remains a mystery. Why so much interest in the former Soviet satellite-turned EU and NATO member with a population of 10 million?
The Russians are keen on gathering information in the energy sector on companies such as the partly state-owned utility CEZ and its nuclear power know-how. Other local companies of interest include Unipetrol, Ceska rafinerska, and MERO which controls the IKL oil pipeline.
Apart from this, the Russian SVR foreign intelligence service has a slew of local friends including former members of the Czechoslovakian StB secret police who have wormed their way into politics, the civil service, banking and big business on both sides of the Czech-Slovak border following the break-up in 1993.
These friends or corrupt acquaintances allow their Russian guests the opportunity to allegedly launder billions and asset strip local companies while at the same time enabling Moscow to exercise greater control over the territory without having to send a single tank.
Enter the European-Russian Bank (ERB), which was granted its operating license by the Czech central bank in 2008 after two previously unsuccessful attempts.
The European-Russian bank is owned by the First Czech-Russian Bank (FCRB) which traces its roots to the early 1990s when it was set up with the assistance of the now-defunct IPB bank to foster closer economic ties between the two countries.
IPB was a legendary nexus of asset stripping and money laundering, often accused of illegally funding both the Civic Democratic Party (ODS) and Social Democrats (CSSD), the two largest and most influential parties in the country comprising mostly of former communist hacks, who despite pretending to be opposed to one another, in reality run the country as a consortium together with local big business.
The BIS and UZSI are concerned that the European-Russian Bank and the First Czech-Russian Bank could have ties to Russian intelligence, or organized crime elements, which given the current state of affairs in Russia often makes it difficult to distinguish between the two.
Roman Popov, CEO of the ERB said on April 18 that “once we settle down in the Czech Republic and Slovakia we would also like to expand to Italy”. Popov said the ERB plans mainly to cater to Russian companies doing business in Prague and Karlovy Vary.
According to Czech public records Popov, apart from running the ERB and FCRB, also ran, together with other Russian associates, the Prague-registered Personal Advisory Services currently in liquidation.
The sole shareholder was Olivier Capital, an opaque Czech shell company also in liquidation whose domicile migrated between the UK, Gibraltar and the Polynesian island of Niue depending on the season.
Public records further show that David Castek, a supervisory board member of ERB is also listed as the ultimate beneficiary of three other companies that were previously owned by another opaque Czech firm called Nordic Victory whose domicile has shifted from Prague, Gibraltar, the UK and the US.
Noteworthy is that Olivier Capital and Nordic Victory shared the same domicile in Gibraltar with a company called Garnett Holdings Ltd.
Further research reveals that a number of Czech and Slovak nationals who appear in Olivier Capital and Nordic Victory also appear in a third company called Braxton Invest, whose globetrotting domicile record has also linked it to Garnett Holdings. Some of these individuals figure in over 80 companies in Czech and Slovak public records that eventually have links to Braxton Invest, Olivier Capital or Nordic Victory.
European Russian Bank recently announced that it intends to open a branch in Vienna, Austria,long suspected of being a favorite location for money laundering operations by Russian firms.