Money-laundering audit casts shadow over bailout

Amid the dramatic twists and turns of the Cyprus rescue funds crisis, the matter of the EU-sponsored probe to determine whether Cypriot banks launder money for Russian criminals has dropped off the radar, writes EUobserver.

The 11-day investigation, which began on March 20, is being carried out by Moneyval, part of the Strasbourg-based Council of Europe dedicated to investigating money-laundering, and a second undisclosed private international audit firm appointed by the Cyprus Central Bank. However, the news website fears that the issue of money-laundering may prove a stumbling block for the rescue plan, saying –

The German government pushed for the probe in the first place because the Social-Democrat opposition threatened to veto a Cypriot rescue on money laundering grounds. [...] It is likely to come back with a vengeance when the Dutch, Finnish and German parliaments vote in April on whether the EU should lend Cyprus the €10 billion it needs.

Furthermore, the website questions what the audits can achieve in such a tight timescale, pointing out they have to assess Cyprus’s more than 40 banks holding some €130bn.