Accounting firm investigated after acting as intermediary in tank deal
An accountancy firm based in Tallinn is being investigated after acting as intermediary in an arms deal between the Ministry of Defence of Georgia, and a company in Cyprus.
According to weekly Eesti Ekspress, Georgia wanted to conclude a deal to purchase T-72 tanks, of Ukrainian origin, from the Cypriot-based firm, for a reported €3 million, but the transaction fund were transferred via an Estonian accountancy firm.
The transfer raised the suspicions of the Estonian Internal Security Service (KaPo), who according to one theory suspected the intention was to obscure the actual beneficiary of the transaction. Furthermore, the firm in question, which has not been named, lacked the authority to act in transfers concerning arms deals, it is reported.
The head of the firm explained that it was utilised in the deal to take advantage of the relatively favourable tax situation in Estonia.
''Transferring the money through the bank account of an Estonian firm made a saving of 30%, compared with doing so via either a Latvian or Lithuanian firm'' the spokesperson said.
''In Lithuania for instance, the deal would have required the legal entity to pay 15% of the projected revenue per quarter, together with another 15% on dividends,'' the spokesperson went on.
Raigo Aas, Assistant Prosecutor of the Prosecutor General's office terminated criminal proceedings due to lack of public interest; the accounting company suspected of illegally shipping strategic goods paid €28,000 into Estonian state revenues, whilst its manager paid €2,000, it is reported.
The T-72 is a main battle tank that first entered production in the Soviet Union in 1971.
Editor: Andrew Whyte