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Thursday February 27, 2014 MYT 4:36:01 AM
Thursday February 27, 2014 MYT 4:36:50 AM
by stephen grey
KIEV (Reuters) - Ukraine will urgently contact international organisations with an official request to help trace bank accounts and assets controlled by ousted President Viktor Yanukovich and his allies, the acting prosecutor general said on Wednesday.
Accusing Yanukovich and his aides of stealing "not millions but billions" of dollars, Oleh Makhnytsky said he had ordered police and intelligence agencies to draw up a list of foreign accounts held by Yanukovich's aides and their connections.
"We are preparing today the requests to international organisations to find the accounts," he told Reuters in an interview.
Officials who he said were under investigation included former prime minister Mykola Azarov and Yanukovich's chief of staff Andriy Klyuev.
The prosecutor-general's announcement came as European Union officials prepared sanctions against leading figures in the ousted leadership.
U.S. authorities warned banks on Tuesday to be on the look-out for potentially suspicious transfers of financial assets by members of Yanukovich's circle.
Makhnytsky also said that every economic deal concluded in the four years of Yanukovich's presidency would be carefully re-examined for possible graft.
"We are doing these checks because all the activity of the former regime was built on total corruption," he said.
After the discovery of a lavish presidential retreat at Mezhyhirya outside Kiev - complete with private golf course and pet zoo - and other luxury homes around the country, there is a widening anger and suspicion in Ukraine that Yanukovich and his associates may have taken a substantial slice from major public contracts.
According to evidence gathered by Ukrainian journalists and anti-corruption watchdogs, behind these properties are a series of holding companies, including in Austria, Liechtenstein, Britain, and offshore jurisdictions.
The retreat at Mezhyhirya, for example, is owned by a holding company controlled by Andriy Klyuev's brother Sergei, a wealthy businessman and lawmaker.
A spokesman for Sergei Klyuev, who asked not to be identified, said the estate was bought as a private investment: "He is a wealthy individual who saw this whole project as a good commercial proposition."
Other assets used by the president and his aides were set up and managed by an Austrian-based lawyer, Reinhard Proksch, according to Kiev's Anti-corruption Action Centre, a research organization.
Contacted by Reuters, Proksch confirmed he had helped set up companies that now appeared to have been used by Ukrainian leaders and their associates, although he had never met them.
Proksch said he was already providing information to Liechtenstein authorities, but was also happy to help any other authority including Ukraine. "All they can do is freeze everything," he said.
But, for assets to be frozen, proof will be needed they were acquired with money earned by criminal means.
Nina Bussek, a spokeswoman for Vienna prosecutors, said an earlier investigation into allegations of money-laundering from Ukraine had been dropped because "there needs to be determination of a so-called preceding act, which means the money comes from criminal activity and that could not be determined. That is why the money laundering case was dropped."
Daniel Thelesklaf, chief of the Financial Intelligence Unit in Liechtenstein, told Reuters his agency was monitoring developments. But he added: "So far we have not received requests from Ukraine. We await the decisions by the EU on possible sanctions."
A spokesman at the Swiss federal prosecutor's office, Jeannette Balmer, told Reuters they had not opened any investigations nor received any requests for judicial assistance from Ukrainian authorities.
But another law-enforcement official in Switzerland indicated that inquiries were expected be launched soon, once such requests arrived.
Speaking on Austrian television on Tuesday, Foreign Minister Sebastian Kurz confirmed there was a draft EU sanctions list.
He said: "We know only the first draft of this list, which contains very prominent and well known names. We of course sent this draft to the Financial Market Authority and the Interior Ministry so that no time window opens for these people until the final decision by the European Union."
Underlying the unstable political situation in Ukraine, Makhnytsky's official office in Kiev appeared unguarded except for militia armed with baseball bats when visited by Reuters.
The revolutionary air hanging over the city was underscored by a sole protester smashing his way through glass doors at the building's reception area. He was removed by the militia.
In the interview, Makhnytsky said the Yanukovich government had close ties to leading figures in business so prosecutors would examine "very intensively" items in the state budget, tenders by the state, and the fuel and gas sector.
With searches under way in all the former residences of the ex-president, Makhnytsky said national authorities would look for all traces of international bank accounts or companies associated with figures from the former leadership.
Asked whose assets he was seeking abroad, the prosecutor said Ukraine was looking to find the assets of Azarov, Klyuev, ex-interior minister Vitaly Zakharchenko and members of Yanukovich's family.
He also named one prominent businessman, Serhiy Kurchenko, who he said was closely tied to Yanukovich. Investigators had already found 685 million hryvnia (about $60 million) of suspicious transactions in his accounts, he said.
Kurchenko could not immediately be reached for comment and is believed to have left the country.
Asked about major commercial deals signed by Yanukovich's government - including production-sharing agreements for shale gas exploitation with oil giants Chevron and Shell - he said:
"We will check everything: all the schemes of the ex-regime." Without pre-judging the investigation, if illegal deals were found then they would be reversed, he said.
(Additional reporting by Michael Shields in Vienna, Stephanie Nebehay in Geneva, and Mark Hosenball in Washington; Writing by Richard Balmforth; Editing by Robin Pomeroy)
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