Title: Russian Federation’s Progress in AML/CFT Reforms: A Look at the First Follow-Up Report
Introduction
The Russian Federation, which has been under regular follow-up since the approval of its Mutual Evaluation Report (MER) in October 2019, has made notable improvements in addressing the technical compliance deficiencies highlighted in the MER. This progress is evident in the first follow-up report, which showcases the changes implemented to meet new requirements under FATF Recommendation 15.
Analysis of Progress Made by the Russian Federation
The report reveals that the Russian Federation’s Technical Compliance ratings as of October 2019 were mostly Politically Committed (PC), indicating areas of deficiency. This follow-up report examines the progress made by the Russian Federation in improving these ratings, focusing on the improvements regarding Recommendations 6, 15, and changes within the national AML/CFT system.
Expert Evaluation of Changes
Experts from various delegations and the Secretariat, including Mr. Khurshid Akhmadaliev, Mr. Robin Rawal, Ms. Zhongyuan ZHANG, and Ms. Nazerke Zhampayeva, analyzed the Russian Federation’s request for TC re-ratings and the modifications made to address the technical compliance deficiencies and new requirements under FATF Recommendation 15.
Recommendation 6: Addressing Technical Compliance Deficiencies
Section III of the report outlines the efforts aimed at improving the level of technical compliance. The Russian Federation:
- Implemented immediate UNSC sanctions list notifications
- Amended Federal Law No. 115-FZ to ensure financial institutions and DNFBPs comply with the application of TFS measures
Additionally, changes in legislation, such as amending Federal Law No. 281-FZ, now ensure compliance with the provisions of UNSC Resolutions stipulating coercive measures, including freezing measures. Legal entities are now held liable for non-compliance.
Results of the Changes
As a result of these efforts, the follow-up report upgrades the ratings of Recommendations 6 and 7 to Largely Compliant. The weighting and conclusion for each recommendation demonstrate significant progress made by the Russian Federation, while highlighting the need to address minor deficiencies to fully comply with the FATF Standards.
Conclusion
The progress made by the Russian Federation in making technical compliance improvements, as noted in the first follow-up report, showcases their commitment to meeting FATF Standards and addressing specific deficiencies from their Mutual Evaluation Report.