VIENNA (Reuters) - Austrian regulators are investigating whether two banks named in an international data leak followed procedures to prevent money laundering, one of the firms having attracted attention for its lending to a confectionery company owned by Ukraine’s president.
The leaked “Panama Papers” cover a period over almost 40 years, from 1977 until last December, and allegedly show that some companies domiciled in tax havens were being used for suspected money laundering, arms and drug deals and tax evasion.
Two Austrian media groups that were among the more than 100 news organizations that jointly investigated the documents’ contents identified Raiffeisen Bank International and Hypo Landesbank Vorarlberg as companies named in the trove.
“We are verifying whether the banks did their work thoroughly beforehand,” a spokesman for Austrian financial markets regulator FMA said, citing required checks on matters such as the purpose of transactions and people involved.
“We are verifying that in the course of an on-site inspection,” he said, adding that the FMA can refer matters to the criminal authorities if it suspects wrongdoing.
The Austrian news organizations involved in the investigation, broadcaster ORF and weekly newspaper Falter, reported a connection between Raiffeisen and the Roshen company owned by Ukrainian President Petro Poroshenko.
The bank had made a loan of $115 million to Roshen secured against the holdings of a company based in the British Virgin Islands, Linquist Holdings Limited, ORF and Falter reported.
Raiffeisen said it had complied with legal provisions on the prevention of money laundering but could not comment on specific cases because of banking secrecy rules. There were also limits to its ability to carry out checks, it said in a statement.
“As we are not a government institution, a thorough screening of customers and transactions is not possible,” said Raiffeisen, which according to ORF and Falter performed similar transactions involving Linquist and other offshore firms.
ORF said Hypo Landesbank Vorarlberg -- majority-owned by the province of Vorarlberg, which borders Liechtenstein and Switzerland -- was connected to offshore firms through trustees in Liechtenstein and much of the money trail led to Russia.
“At no point have we violated money-laundering stipulations or sanctions, as legal stipulations are taken very seriously and followed very fastidiously in our company,” Hypo Vorarlberg said in a statement.
The criminal investigations bureau, a branch of the Interior Ministry, and the Austrian prosecutors’ office in charge of economic crimes and corruption said they had taken no action so far as there was not enough concrete information.
Editing by Keith Weir
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