Financial Crime World

Russian Federation Must Improve Anti-Money Laundering Efforts to Combat Crime and Terrorism

The Financial Action Task Force (FATF), Eurasian Group, and MONEYVAL have recently assessed Russia’s anti-money laundering efforts and identified areas for improvement.

Understanding Money Laundering Risks

Russia has made significant progress in understanding its money laundering and terrorist financing risks. A national risk assessment and in-depth knowledge of relevant law enforcement agencies have allowed the country to identify and understand its risks, including those related to corruption and narcotics trafficking.

Russia’s legal framework addresses these risks effectively, with formal policies in place and strong domestic coordination and cooperation. However, there are gaps in freezing assets linked to terrorism and weapons proliferation that need to be addressed.

Recommendations

  • Extend the obligation to freeze assets linked to terrorism and weapons proliferation to all natural and legal persons.
  • Improve cooperation with foreign counterparts through international agreements.

Investigating and Prosecuting Complex Cases

While Russia cooperates well with foreign counterparts, it must focus more on investigating and prosecuting complex money laundering cases, particularly those involving foreign laundered money.

Recommendations

  • Prioritize the investigation and prosecution of complex cases.
  • Strengthen cooperation with foreign law enforcement agencies to combat international money laundering schemes.

Oversight and Risk Awareness

Russia has strengthened oversight of the banking sector, mitigating risks associated with criminal ownership or control. However, licensing deficiencies remain, and sanctions for non-compliance are not effective or dissuasive.

Recommendations

  • Address licensing deficiencies in the financial sector.
  • Strengthen sanctions for non-compliance to ensure accountability.

Risk Awareness in Key Sectors

The country’s financial and non-financial entities, such as accountants and auditors, have a good understanding of how their services could be used to launder criminal proceeds. However, Russia’s significant mining sector lacks adequate risk awareness.

Recommendations

  • Conduct targeted training and awareness programs for the mining sector.
  • Encourage industry leaders to adopt robust risk management practices.

Progress and Future Action

Since its last assessment in 2008, Russia has strengthened its understanding of money laundering and terrorist financing risks and developed a robust legal framework. While the country has taken concrete actions, it must address identified weaknesses and continue to improve its anti-money laundering efforts to combat crime and terrorism.