Calls for increased Brussels scrutiny of transnational loans

The European institutions have been urged to investigate transnational loans, with calls to increase transparency in the way business is conducted across countries and continents. This follows concerns raised about the conduct of some business entities with regard to compliance with European Union directives, rules and regulations.

One case which has been recently highlighted is that of Alex Shnaider and his company Midland Development Inc and an alleged $298-million loan agreement it is said to have entered into with Raiffeisen Bank International AG, an Austrian public financial institution. Some concerns have been voiced that the loan, thought to date back to 2007, is considered by some not to have been a standard business transaction and that it was approved with unusual speed. The case is also said to highlight a “territorial” issue involving cross-national transactions.

One EU insider told EU Political Report: “This is significant as the granting of the loan took place in Vienna, which, as Austria is an EU member, comes under EU regulations. It is important that these types of activities are fully transparent. This, surely, is for the benefit of all European taxpayers.”

Veteran UK Socialist MEP Richard Corbett, a renowned constitutional expert, could not comment on any individual cases. But he commented to EU Political Report: “I would have thought that anything like that would be for the Financial Market Authority (FMA) to investigate.”

A source at the FMA said that cross-border cooperation between supervisory authorities was becoming increasingly important. They added that this is the case both within the European Union, as well as on a global basis. “One of the main reasons is because globally active companies are offering financial services far beyond their national borders. Particular importance is also accorded to the statutory tasks of the supervisory system, such as dealing with unauthorised banking, insurance and financial services transactions, and taking preventive measures aimed at fighting money laundering.”

The Financial Market Authority is not only responsible for the supervision of financial market players but also has additional competences and powers. The authority has special investigative powers with regard to the prevention of unauthorised business.

Another British MEP, who said he did not wish to be named, told EU Political Report: “I think this case is could be a matter for the Canadian authorities. Competent and relevant authorities, possibly in Canada, must deal with it in the first instance.”

Another MEP suggested to EU Political Report that that such transnational cases may possibly be of interest to Europol, the European Union Agency for Law Enforcement Cooperation. Formerly the European Police Office and Europol Drugs Unit, this is the law enforcement agency of the European Union.

The MEP said transnational transactions “often have an international dimension that requires an international response and money laundering is one of Europol’s priority crime areas. Europol has a broad mandate in the area of combating money laundering. Money laundering is an offence in its own right, but it is also closely related to other forms of serious and crime.”