Russia Takes Tough Stance on Money Laundering and Financial Crimes
The Russian government has taken significant steps to combat money laundering and financial crimes, which can have serious consequences for corruption, tax evasion, and illicit activities.
The Threat of Money Laundering and Financial Crimes
Money laundering and financial crimes pose a significant threat to the stability of the economy and national security. Illegal funds can be used to finance terrorism and the proliferation of weapons of mass destruction. It is essential to address these concerns by implementing effective anti-money laundering (AML), combating the financing of terrorism (CFT), and combating the proliferation of weapons of mass destruction (CPF) standards.
International Cooperation
The Financial Action Task Force (FATF), a specialized intergovernmental organization, develops international AML/CFT/CPF standards that countries must implement. Russia has implemented these standards through Federal Law No. 115-FZ, dated August 7, 2001, and a set of regulatory legal acts adopted in pursuance of this law.
The Russian AML/CFT System
The Russian AML/CFT system is comprised of federal executive bodies, the Bank of Russia, other government bodies and organizations, 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 bank and non-bank financial institutions in the field of AML/CFT/CPF and monitoring their compliance with statutory requirements.
Objectives
The primary objective of the Bank of Russia is to mitigate money laundering (ML) and financing of terrorism (FT) risk in the financial sector. To achieve this goal, banks and non-bank financial institutions must implement a range of measures aimed at preventing the use of the Russian financial system for illegal purposes, including:
- Identifying customers
- Monitoring customer transactions
- Informing Rosfinmonitoring about suspicious transactions
Results
The result of these efforts has been a steady decrease in the volume of dubious transactions. The Bank of Russia has also launched the Know Your Customer Platform (KYC Platform), a system that provides necessary information about the risk level of potential and existing clients’ involvement in suspicious transactions.
Currency Control
In addition to AML/CFT/CPF, the Bank of Russia is responsible for currency control, which is part of state policy aimed at ensuring the stability of the Russian Federation’s currency and domestic foreign exchange market. The Bank of Russia monitors FX transactions carried out by banks and non-bank financial institutions to prevent unscrupulous economic agents from using the credit and financial sector for illegal purposes.
Conclusion
In modern conditions, the Bank of Russia is applying AML/CFT/CPF tools comprehensively to prevent illegal activities in the financial system. The Russian government’s efforts to combat money laundering and financial crimes are crucial to protecting national security and ensuring the stability of the economy.