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Ukraine Launches Terror-Financing Probe Into Bank Loan After RFE/RL Report


Ukreksimbank is Ukraine's third-largest bank by assets and serves as the authorized financial agent for the government when making foreign loans. (file photo)
Ukreksimbank is Ukraine's third-largest bank by assets and serves as the authorized financial agent for the government when making foreign loans. (file photo)

Ukrainian prosecutors have opened a terrorism financing investigation after it emerged that the country’s state-owned export-import bank lent tens of millions of dollars to companies owned by a businessman with interests in parts of eastern Ukraine controlled by Moscow-backed separatists.

The Prosecutor-General’s Office told RFE/RL’s Ukrainian Service on October 27 that it opened the probe last week after lawmakers demanded an investigation following an investigative report published earlier this month.


According to the findings by Schemes (Skhemy), an investigative news project run by RFE/RL's Ukrainian Service in cooperation with UA: Pershy television, Ukreksimbank lent $60 million to companies owned by Serhiy Bryukhovetskiy.

Bryukhovetskiy also paid millions of Ukrainian hryvnyas in taxes to the separatists and put up as collateral for the loan a Kyiv shopping mall whose ownership is under dispute.

Fighting between Ukrainian government forces and the separatists has claimed more than 13,200 lives since April 2014.

The Schemes investigation raised questions about why Ukraine's third-largest bank by assets was allowed to finance an entity doing business with the separatists, possibly in violation of Ukrainian law.

Ukrainian authorities have made it illegal for Ukrainian companies to do business with firms in the separatist-held areas under a law prohibiting "terrorist financing." The blockade, however, is known to be porous, with some trade circumventing the prohibition.

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