On 6 November 2020, the EU, Switzerland and US froze the assets and accounts of 59 people around the world, including Belarus’s autocratic president, Alexander Lukashenko, his son and associates. Subsequently, it was revealed that Lukashenko's money-laundering network was sending large sums of money through Mongolia to offshore companies in Estonia and Dominican Republic.
Lukashenko had a few hard-currency cash cows. One was Belaz, a manufacturer of heavy-duty trucks and equipment used in mining. The Belarus state-owned Belaz sells trucks and other products through United Belaz Machinery, its official dealer in Mongolia.
The shareholders of United Belaz Machinery used to be Otgonjargal Moyle, a Mongolian citizen, and Vladimir Gennadievich Yaprintsev, from Belarus. Yaprintsev, is a three-time world champion in sambo. He’s made public his friendship with Khaltmaa Battulga, the Mongolia president. They met through their mutual love of sambo in the mid-1980s and established a joint venture in Mongolia.
Otgonjargal Moyle is a former personal assistant to Battulga. She was a shareholder in two of his companies, Tumen Khishigten and Bayalgyn Khuvi. Otgonjargal is now a high-ranking law enforcement official in the Mongolia Prosecutor General's Office.
United Belaz Machinery has a Mongolia sister company, United Belaz Machinery Investment Company. It’s suspected of laundering sums of money for Lukashenko under the guise of selling mining equipment in Mongolia.
Ownership of United Belaz Machinery was transferred by the pair to Meress, a company registered in Estonia and Blustait, in Dominican Republic.
The beneficial owners of these offshore companies are thought to be connected to Lukashenko.
United Belaz’s affairs are tightly-guarded. It is alleged that its lucrative dealerships are only awarded to those associated with the very highest levels of the Lukashenko regime and the country in which it sells the equipment, in this case, Mongolia.
The roles of the Estonia and Dominican Republic companies and what funds reach them requires further investigation, not only in Mongolia, but by international law enforcement agencies.
ProPublica has published a scathing report, “The country that exiled McKinsey”, detailing alleged corruption surrounding a Mongolia railway-building scheme and the creation of a bogus feasibility study. Battulga, then minister of road, transportation and urban development, and his advisor, Chuluunkhuu Ganbat, were heavily implicated. Otgonjargal Moyle, the original shareholder in the Belaz dealership, was also drawn in as an associate of Battulga.
After Battulga’s election as president, and the subsequent departure of the prosecutor general and head of the anti-corruption agency who were investigating the case, the probe and prospect of any prosecutions ended.
It was alleged during the railway inquiry that millions of US dollars in cash were being deposited by Otgonjargal Moyle in accounts of companies and foundations linked to Battulga. What was not clear is how a person with rather modest means and not a large publicly declared income had access to large sums of cash. Was it connected to Belaz? Again, we won’t know until this is properly looked into by Mongolian and international law agencies.
Otgonjargal Moyle is the wife of Ben Moyle, founder and former director of C1 TV, which is controlled by Battulga, and frequently unleashes attacks on his local political opponents. Ben Moyle is a UK citizen.
It’s to be hoped that Otgonjargal did not acquire UK citizenship, as under Mongolian law, dual citizenship is prohibited. In Mongolia, working as a government employee, especially in law enforcement, is considered to be a “special service branch of the civil service” and has a higher bar of compliance, as a foreign citizen is a grave offence.
United Belaz Machinery supplied the the state-owned Baganuur mine with four coal trucks, four dump trucks and a bulldozer. It received MNT 18.6 billion from the Development Bank of Mongolia to implement a project to expand the coal-crushing and loading facility, which was never paid back.
A total of 35 pieces of Belaz equipment, worth MNT 27 billion, was supplied to Erdenet, another state-owned copper mine. Documents were allegedly falsified and Belaz is suspected of having been in collusion with the plant's management.
Was Battulga's pressure and influence behind these deals, which also involved higher-than-market prices? If so, he has awkward questions to answer. Misusing power and favouring a specific supplier are criminal offences under Mongolian law.
The evidence heavily suggests the existence of a global network of assets and businesses tied to money laundering via Mongolia for Lukashenko.
The inter-governmental Financial Action Task Force has previously targeted Mongolia for money laundering and included the country on its “Grey List” of nations with deficiencies in their systems that must be more closely monitored. What is required now is a thorough investigation, not only into possible money laundering by Mongolia’s president and a high-level law enforcement official but also on behalf of a vilified European ruler.
Iconic mine at the centre of a raging political battle
In a world where Brexit and the relentless cycle of depressing covid statistics dominate headlines, a story of huge geopolitical significance has escaped the public's attention. One of the biggest, most valuable, and iconic mines on the globe is at the centre of a raging political battle. It’s set to become a huge item of contention in a forthcoming presidential election, writes Tori Macdonald.
In Mongolia, in the South Gobi region, towards the border with China, lies one of the world’s richest sources of metal. It’s the giant Oyu Tolgoi copper mine, held 34% by the Mongolian government and Turquoise Hill, majority-owned by Rio Tinto, holding the rest.
The mine started producing above ground in 2011, and expansion underground should see total output of copper climb to 500,000 tonnes per year - putting Oyu Tolgoi third in the world rankings. It’s hard to think of an industrial site upon which so much rests: Mongolia is a developing country, and at full production the massive mine is set to account for more than 30% of its entire GDP. The equation is simple: with the mine working efficiently, Mongolia can reach a higher level of prosperity; without it, the nation and its people will continue to struggle.
All of which explains why the mine has become a magnet for high-level political dispute and intrigue. Mongolia’s former Prime Minister Batbold Sukhbaatar remains the senior member of the ruling People’s Party and is one of the party’s likely 2021 presidential candidates. Though not part of the negotiation team, Batbold was Foreign Minister when the deal to develop the mine was struck. Subsequently, as Prime Minister he was determinedly pro-markets, a progressive and moderniser.
The mine, which was the main magnet for large European and US investors, has become a symbol of the new, open for business, Mongolia. Some are opposed to it for that same reason. They resent the presence of the foreigners, believing the mine and its copper belong to Mongolia. They accuse Turquoise and Rio Tinto of exploiting the country’s natural resources and not putting enough back.
If he stands, Batbold is likely to be opposed by the current President, Khaltmaagiin Battulga. He is an admirer of Vladimir Putin, speaks Russian, loves Putin’s favourite sport of judo and has a Russian partner, Angelique. And at his inauguration he went out of his way to mention approvingly both Russia and China.
Battulga has sought to broaden the range of overseas businesses in the nation, encouraging them to fund developments in non-mining sectors. He’s also resurrecting a draft law requiring foreign investors to use Mongolian banks. The proposal was rejected previously as unworkable and likely to deter overseas firms, but it has since reappeared. They are unlikely to risk their money should there be a possibility that one day accounts may be frozen by the government and transfers blocked. The move may be a ploy designed to pressure Rio Tinto, part of a broader plan to loosen the corporation’s grip.
The worry, though, is that in doing so Battulga may dissuade other investors and deliberately or unwittingly open the door to Russia or China, both of which would like to get their own hands on Oyu Tolgoi. Such a move would be closely watched by the United States. As the EU just discovered, Joe Biden’s administration looks every bit as belligerent towards China as Donald Trump was. Just this week, Jake Sullivan, Biden’s National Security Advisor, publicly raised concerns about the EU-China business investment agreement currently being negotiated.
In this way the mine has become central to the debate about Mongolia’s future direction, a political football as the election nears. The temperature has been raised by the launch of lawsuits in New York and Mongolia alleging corruption by Batbold in relation to contracts to develop the mine - claims that the former Prime Minister denies. The New York court found for Batbold and dismissed the action, but it indicates a determination by his opponents to make the mine an issue
The actions, which claim to be in the names of three Mongolian government agencies, have raised eyebrows. They are seen as deliberately political, really doing the current President’s bidding, designed to weaken his rival Batbold’s national and international standing. They’ve been coordinated by Mongolia’s Deputy Prosecutor General, himself appointed by the President – something that has also not gone unnoticed.
The litigation is expensive to pursue, involving numerous teams of lawyers. The agencies are basing their efforts on a report prepared by Jules Kroll, the veteran business and financial investigator, founder of the Kroll intelligence agency and now running his own K2 consultancy. Critics are wondering how much the lawyers and Jules Kroll are being paid, and whether such a clearly political tactic is a proper use of public money, especially at a time when Mongolia should be trying to conserve funds to source vaccines to defeat Covid-19.
Mongolian President Tsakhiagiin Elbedorj visits European Parliament
"Mongolia will be a strategic anchor for the EU in the east," Mongolian President Tsakhiagiin Elbedorj said, addressing MEP's during the plenary session in Strasbourg on Tuesday 9 June. It is Ebedorj's first visit to the Parliament since being elected in May 2009. During his speech he talked about his country´s transition to democracy and the European Union's support and cooperation during this time.
"We arrived from being the most isolated and closed communist regime in the world to one of the most open. Today we have a dynamic market economy, a vibrant, creative society," Elbedorj said. The president stressed the importance of EU support and co-operation: "You were with us when we needed your support the most; you were with us when we needed your voice of encouragement."
Introducing Elbedorj, EP President Martin Schulz said that Mongolia will be hosting the 2016 Asia-Europe Meeting (Asem) in June 2016. "This is essential in terms of building bridges between Europe and Asia and will help us resolve the regional and global problems," he said.
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