Headline: Russian Federation’s Progress in Combating Money Laundering and Terrorist Financing: A FATF Report

The Russian Federation has made strides in fortifying its anti-money laundering and counter-terrorist financing (AML/CFT) system amidst global efforts to combat financial crimes. However, there are still gaps that need attention, according to the latest report from the Financial Action Task Force (FATF).

Russia’s AML/CFT System Assessment

The FATF’s assessment of Russia’s AML/CFT system evaluated the country’s effectiveness in fighting money laundering and terrorist financing and its adherence to the FATF Recommendations. The report also analyzed Russia’s measures against terrorist financing, particularly in relation to UN and domestic designations.

Acknowledgment of Financial Crimes Risks

The Russian Federation acknowledges the significant risks of money laundering and terrorist financing within its jurisdiction. This includes risks related to proceeds of corruption and narcotics trafficking. The country’s national risk assessment and collaboration among law enforcement agencies have yielded a better understanding of its risks.

Advancements and Challenges

Russia’s legal framework tackles these challenges, as well as terrorism financing risks, supported by strong domestic coordination and international partnerships. However, improvements are needed, especially regarding freezing assets related to terrorism, financing, and weapons of mass destruction.

International Cooperation

Russian authorities cooperate extensively with their international counterparts, with over 100 agreements with the financial intelligence unit, Rosfmonitoring. The country’s financial intelligence plays a crucial role in investigations backed by a significant database and advanced technology applications. Nonetheless, more resources are needed to investigate and prosecute complex money laundering cases, particularly those involving transactions abroad.

Banking Sector Improvements

The banking sector, once a significant risk due to potential criminal ownership, has improved its compliance with AML/CFT regulations. However, deficiencies in licensing and weak sanctions for noncompliance remain.

Vigilance Needed From Financial and Non-Financial Entities

Financial and non-financial entities, like auditors and accountants, should be more vigilant against money laundering and terrorist financing risks, especially given Russia’s strategic role in the mining sector.

Progress and Areas for Improvement

Since its last assessment in 2008, Russia has taken ambitious steps to strengthen its understanding of money laundering and terrorist financing risks and its legislation to address them. The country has achieved notable progress, but must attend to areas identified in the recent FATF report.

These improvements and areas for further development were endorsed by the FATF in October 2019 and by MONEYVAL in December 2019.