Russian money laundering probe 'no relation' to Valio activities


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Russian money laundering probe 'no relation' to Valio activities

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A Russian money laundering investigation that yesterday culminated in a search of Valio's St Petersburg office has "no relation" to the activities of the Finnish dairy, says the agency behind the raid.

The Investigative Committee of the Russian Federation (RFIC), sometimes described as the Russian FBI, confirmed reports yesterday that it had carried out a search at Valio's office in St Petersburg as part of an investigation into money laundering by a nationwide criminal organization.

Markin Vladimir Ivanovich, head of media relations, RFIC, said that the search was aimed at "gathering new evidence against the accused and has no relation to the company's activity whatsoever."

The RFIC investigation centres on claims that between 2011 and 2013 a criminal organization laundered more than 45m Roubles (US$1.25m, €930,000) using legitimate businesses in the country.

“During the investigation it was found that members of the criminal community under the guise of legitimate banking operations transferred funds to the accounts of more than 20 businesses, including those of Valio in St Petersburg,”​ said Ivanovich.

In a statement published on its Russian subsidiary website, Valio acknowledged that a search had been conducted at its St Petersburg office.

“On August 12 2014, the Investigative Committee of the Russian Federation searched the office of Valio LLC in St Petersburg. The RFIC has confirmed that the ongoing investigation is in no way associated with Valio​," said the Finnish dairy.

“Valio carries out its activities in Russia in full compliance with the legislation of the Russian Federation and are ready to provide any information to authorized organizations."

Import embargo

Yesterday's RFIC search represents Valio's second setback in Russia in less than a week.

Last week, the Russian Prime Minister Dmitry Medvedev announced a complete ban on the import of beef, pork, fruit, poultry, cheeses and milk from the EU, US, Australia, Canada, and Norway.

Valio products, such as Valio Oltermanni cheese, Valio Viola cheeses, Valio Fin butter, account for more than 85% of all Finnish exports to Russia. Valio’s exports to Russia, valued at €242m (US$324m), generated almost 20% of the company’s revenue last year. 

Valio claims it will be “the hardest hit of all companies in Finland.”

Following Medvedev's announcement, the Helsinki-based dairy brought a halt to the manufacture of all products destined for Russia.

It acknowledged that this fall in production could lead to up to 800 lay-offs and the non-renewal of fixed-term contract at its Finnish plants in Haapavesi, Seinäjoki, Vantaa, and Lappeenranta.

Valio's Russian business has also begun preparations for a "gradual run-down"​ of operation as its current inventory "becomes exhausted and sales end."

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