Russia’s Anti-Money Laundering Efforts Face Criticism from Global Finance Watchdog

FATF Report Highlights Concerns and Progress in Russia’s AML/CFT Efforts

MOSCOW, RUSSIAN FEDERATION - The Financial Action Task Force (FATF), an international organization that sets standards for anti-money laundering and combating the financing of terrorism (AML/CFT) efforts, has released a report criticizing Russia’s approach to supervision and investigation. While praising Russia’s understanding of its money laundering risks, the report highlights several areas where the country needs to improve.

Progress in Understanding Money Laundering Risks

According to the FATF report, Russia has made significant progress in understanding the risks associated with money laundering and terrorist financing since its last assessment in 2008. The country has established a robust legal framework and has taken steps to strengthen its oversight of the banking sector.

Areas for Improvement

However, the report identifies several areas where Russia needs to improve:

• Freezing Assets: Russia’s ability to freeze assets linked to terrorism, financing of terrorism, and proliferation of weapons of mass destruction in a timely manner is a major concern.
• Investigating Complex Cases: The country’s approach to investigating complex money laundering cases, particularly those involving transactions abroad, needs improvement.
• Licensing Regime: Weaknesses in Russia’s licensing regime for financial institutions could allow criminals to establish control over banks.
• Effective Sanctions: The lack of effective sanctions for banks that fail to comply with AML/CFT requirements is a concern.

Strengthening Cooperation and Addressing Gaps

The report notes that Russia has made progress in strengthening its cooperation with foreign counterparts, including through international agreements with its financial intelligence unit, Rosfinmonitoring. However, more needs to be done to address gaps in the country’s understanding of money laundering and terrorist financing risks, particularly in sectors such as mining precious metals and stones.

Continued Monitoring

The FATF report is the latest assessment of Russia’s AML/CFT efforts by a global finance watchdog. The organization will continue to monitor Russia’s progress in addressing the weaknesses identified in the report.