Title: Belarus under Scrutiny: Money Laundering and Terrorism Financing Concerns

Background

• Belarus, a country with an opaque business environment and close ties to Russia, is facing intensified scrutiny over Money Laundering (ML) and Terrorism Financing (TF) activities.
• Growing concerns from the European Union (EU) and international organizations as Belarus’ economy is already struggling.

Ongoing Initiatives to Strengthen Belarus’ Anti-Money Laundering framework

• Since 2017, the second phase of the Pan-European Project Against Money Laundering (PGG II) has been in operation in Belarus.
• Initiative supported by the Financial Action Task Force (FATF), with the goal of strengthening Belarus’ regulatory framework against ML and TF.

Criticisms and Shortcomings

• A report by the European Commission revealed:
  • Lack of political will
  • Weak supervision
  • Insufficient coordination
  • Significant vulnerabilities in the financial sector

The FATF’s Concerns

• Belarus consistently urged to address ML/TF risks and apply effective measures.
• FATF’s 2020 mutual evaluation report identified numerous shortcomings in Belarus’ ML/TF regime:
  • Deficiencies in legal framework, regulations, and practices

Belarusian Authorities’ Response

• Ministry of Finance’s announcement to take steps to address identified weaknesses and improve compliance with international norms.

Instances of Money Laundering in Belarus

• Dismantling of a money laundering scheme in January 2023:
  • Shell companies used to launder millions of dollars from criminal activities

Implications and Next Steps

• Pressure from international organizations
• Risk of further sanctions or exclusion from key international financial institutions
• Opportunity to regain trust and unlock new economic opportunities if effective measures are taken