Shadow economy in Estonia at 30 pct of GDP

A survey commissioned by credit card Visa and made by Austrian professor of economics Friedrich Schneider shows that the size of the shadow economy in Estonia is about 30% of the country’s GDP.

According to the report, in Europe as a whole, shadow economy shrank from 19.3% in 2011 to 19% of GDP in 2012.

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Properties of company executives seized over tax debts

Estonian tax authority has seized four properties that belong to executives of a construction company who are believed to have deliberately bankrupted the company and left behind almost 100,000 euros in tax debts, reports Äripäev.

The properties were seized as a security for payment of the tax arrear.

The company in question is believed to have used fictious invoices, employed some construction workers illegally, ie without paying social tax on them, and paid them wages without declaring them to the tax authority.

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Tax authorities use Google Street View

Estonian tax authority Maksuamet has followed the example of its Lithuanian colleagues and starting to use Google Maps Street View to detect possible tax evasion, writes Äripäev.

Tõnis Kuuse, head of the information department of the Estonian Tax Authority, said that Google Map Street View is only one of several public tools that tax inspectors are using at their work.

“It’s an additional information source that we can use to check on real estate, for instance in case when a person who has declared minimum income is living in a very valuable house,” says Kuuse.

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Investors sue Estonian real estate developer over Moroccon project

Spanish company Property Logic behind which is Estonian businessman Margus Reinsalu and that was developing a luxury real estate project in Morocco has been sued by about 50 foreign investors, writes Eesti Ekspress.

Property Logic is developing Le Jardin de Fleur, a luxury residential development for 1,250 housing units in Saidia, a Moroccon resort on the Mediterranean beach in Morocco.

Investeors claim that the project which raised about 60 million euros in prepayment is stalled and fear that they could lose their investment.

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Estonian food wholesaler charged of bribery

Two executives of AS Haljas, one of Estonia’s oldest food wholesalers, have been charged for attempt to bribe the purchasing manager of an unnamed large grocery chain, writes Postimees.

According to the charges, Bruno Pärn, a management board member of Haljas, and the company’s purchasing and sale manager Marina Piperal, proposed at a meeting with the purchasing manager of a large grocery chain that they would pay the manager every month a certain amount on sale of products supplied by Haljas.

More specifically, they offered to pay the chain’s purchasing manager between 0.5 and 1 eurocent per unit sold.

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Estonians are not ready to go to court to claim money

Seppo Maunula who helps Estonian construction companies to claim debts from Finnish contractors says that his experience shows that it’s a growing problem because not many Estonian subcontractors know the Finnish legal system, writes Finnish Baltic Business Report.

He says there is no precise statistics on the extend of the problem, but because this is a foreign territory for Estonian enterprises, many companies simply prefer to write down the debts and never pursue them.

Maunula says that Finnish enterprises are often testing Estonian companies and their readiness to claim debts. “The plan is to wait and see what happens.”

He adds that most Finnish companies don’t want to go to court over unpaid bills and prefer an out-of-court settlement.

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The Guardian: Latvia is Russia’s playground

An ever-increasing number of Russian businesses choose to invest in Latvia, whether by starting their own companies or taking over Latvian manufacturers. Latvian banks attract large amounts of Russian money, and the European Commission fears that the Latvian banks are being used as a laundering system for dubious Russian money. According to the article, Latvian banks serve as a weak point of entry in the EU banking system.

As to the crime, the article suggests that the Latvian resort city of Jurmala, a popular summer destination for Russian tourism, is the ideal meeting place for the Russian mafia and the Russian government, where they can discuss common problems and plan joint actions.

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Australian authorities suspect 30 young Estonians of visa fraud

Australian authorities say there are now about thirty cases where young Estonians are suspected of identity theft with the purpose of obtaining a new visa and extend their stay in the country, writes Postimees daily.

Australia has been issuing two-year work and leisure visas for Estonian citizens. To continue their stay in Australia, some young Estonians seem to have applied for a new name in Estonia and then filed papers to obtain a visa to Australia without letting Australian authorities know that they are already in the country.

The key to the scheme is that the persons applying for a new name can do so by simply using their digital signature and must not even travel to Estonia to apply for a new name if they are residing abroad at the time.

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10m USD laundered in Estonia in Magnitski case

Estonian banks were involved in transferring 10 million US dollars that are suspected to have been embezzled from Russian state budget in 2008, writes Eesti Päevaleht with reference to an investigation that the Estonian agency that combats money laundering made last year.

The embezzling of the money in question was found out by lawyer Sergei Magnitski before he was murdered.

Estonian authorities have discovered that 10m USD had been transferred in suspicious transactions in 2008, according to public prosecutor Piret Paukštys.

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Dark secret of the Bank of Estonia

Now that the findings of the audit made by the Estonian central bank about the VEB Fund prove that the bank forged documentation, the key question is who prepared the document which was used to take money out of Vneshekonombank.

Ardo Hansson, current governor of Bank of Estonia, apologized yesterday on behalf of the central bank, and said that while the letter was created in the bank, no harm to the state was done.

The bank’s internal probe showed that in 1995, the Bank of Estonia deliberately had prepared a document falsely stating that a Russian company named TSL International had $32 million worth of claims against Vneshekonombank, while its actual claim was several times lower.

Internal auditors said they were unable to determine who was to blame for preparing the letter which appeared to be part of an orchestrated effort to recover funds frozen in VEB.

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