Money Laundering Techniques Exposed in Russian Federation
Introduction
Money laundering is a serious economic crime that is closely linked to corruption, tax evasion, and illicit activities such as drug trafficking. It undermines financial and social relationships and threatens national security.
The Russian Government’s Response
The Russian government has implemented measures to combat money laundering through a comprehensive system of anti-money laundering (AML), combating the financing of terrorism (CFT), and preventing the proliferation of weapons of mass destruction (CPF). This system is based on Federal Law No. 115-FZ, dated August 7, 2001, which sets out the fundamental provisions for combating money laundering and financing terrorism.
The Russian AML/CFT System
The Russian AML/CFT system involves federal executive bodies, the Bank of Russia, other government agencies, banks, non-bank financial institutions, enterprises, and designated non-financial businesses and professions. The Bank of Russia plays a key role in regulating the activities of these entities to prevent illegal activities.
Measures Implemented by the Bank of Russia
As part of its efforts to mitigate money laundering and financing terrorism risk, the Bank of Russia has implemented measures such as:
- Customer identification
- Transaction monitoring
- Reporting suspicious transactions to the Rosfinmonitoring (Russian Financial Intelligence Unit)
The results of this cooperation are evident, with a steady decline in dubious transactions. The Bank of Russia has also launched the Know Your Customer Platform (KYC Platform), which provides necessary information about the risk level of potential and existing clients’ involvement in suspicious transactions.
Currency Control
The Bank of Russia is responsible for monitoring foreign exchange transactions carried out by banks and non-bank financial institutions as part of its currency control functions. Currency control aims to ensure the stability of the Russian Federation’s currency and domestic foreign exchange market.
Comprehensive Approach
In modern conditions, the Bank of Russia applies AML/CFT/CPF tools comprehensively to prevent unscrupulous economic agents from using the credit and financial sector for illegal purposes.