Financial Crime World

Russia’s Anti-Money Laundering and Counter-Terrorist Financing Measures Under Scrutiny: Report Highlights Areas of Improvement

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A joint assessment by the Financial Action Task Force (FATF), the Eurasian Group (EAG) and Moneyval has evaluated Russia’s efforts to combat money laundering and terrorist financing. The report assesses the country’s anti-money laundering (AML) and counter-terrorist financing (CFT) measures against international standards, highlighting both progress and areas for improvement.

Progress and Challenges

Russia has made significant strides in implementing its AML/CFT system since 2003, a feat accomplished in less time than many other countries. The Russian Federal Financial Monitoring Service (Rosfinmonitoring) is commended for performing traditional FIU tasks in full compliance with FATF standards, as well as taking on additional responsibilities such as central responsible agency for AML/CFT matters.

However, the report notes that Russia still lags behind in implementing certain recommendations, including:

  • Recommendation 33
  • Special Recommendations III, VI, VIII and IX

The country’s failure to address these key issues is particularly concerning given its current money laundering and terrorist financing threats.

Record-Keeping and Suspicious Transaction Reporting

Russia’s record-keeping and suspicious transaction reporting systems are generally sound. However, improvements are needed in customer due diligence practices.

Money Laundering and Terrorist Financing Offences

Russia’s money laundering and terrorist financing offences are almost fully in line with FATF standards. Authorities should prioritize increasing investigations and prosecutions for these crimes.

Recommendations for Improvement

The report calls for Russia to:

  • Review and update its supervisory laws and practices, as none of its supervisory authorities possess adequate sanctioning powers.
  • Prioritize specific provisions prohibiting criminal ownership of financial institutions.
  • Increase investigations and prosecutions for money laundering and terrorist financing offences.

International Cooperation

International cooperation is a bright spot in Russia’s AML/CFT efforts. The country demonstrates sound practical mechanisms and support for numerous treaties. Rosfinmonitoring is particularly commended for its leadership role in the Eurasian region on AML/CFT matters.

Conclusion

The assessment was conducted using the FATF Recommendations published in October 2004 and the 2004 Methodology for Assessing Compliance with the FATF 40 Recommendations and FATF 9 Special Recommendations. The report’s findings will be closely monitored by international authorities to track Russia’s progress in addressing these areas of improvement.