Financial Crime World

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Russia Struggles to Stem Money Laundering and Terrorist Financing Risks

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Despite efforts to strengthen its anti-money laundering (AML) and combating the financing of terrorism (CFT) framework, Russia continues to face significant challenges in identifying and mitigating money laundering and terrorist financing risks.

According to a recent report by the International Monetary Fund (IMF), Russia’s authorities have implemented several measures aimed at addressing these risks, including the requirement for financial institutions to identify and document their beneficial owners. However, the report also highlights that the authorities’ understanding of money laundering threats is limited and may underestimate the magnitude of the problem.

Limited Understanding of Money Laundering Threats

The report notes that Russia’s AML/CFT framework relies heavily on analysis of suspicious transaction reports (STRs) and cash transaction reports (CTRs) provided by the banking sector, which may not capture other types of criminal activity, such as:

  • Tax evasion
  • Corruption
  • Fraud in non-banking sectors

Limited Understanding of Transnational Money Laundering Activities

The authorities’ understanding of transnational money laundering activities is also limited, with conflicting assessments about the main assets used for money laundering in Russia. Some officials believe that Russian money laundering activity is mainly cash-based, while others suggest that it involves the purchase of non-financial assets such as:

  • Real property
  • High-value goods

Recommendations

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The IMF report recommends that the authorities adopt a comprehensive and inclusive approach to assessing Russia’s money laundering and terrorist financing risks, using qualitative and quantitative information from all concerned agencies, reporting entities, and academics. Specifically:

  • Adopt a comprehensive and inclusive approach to assessing Russia’s money laundering and terrorist financing risks.
  • Use qualitative and quantitative information from all concerned agencies, reporting entities, and academics.
  • Communicate the results of the risk assessment and adopt a national AML/CFT strategy.
  • Implement risk-based measures through the framework.
  • Strengthen cooperation with the private sector to raise awareness on identified money laundering and terrorist financing risks.

Source

International Monetary Fund (IMF). “Russian Federation: Assessment of Anti-Money Laundering and Combating the Financing of Terrorism Risks”. October 2017.

Contact

For more information, please contact [name], IMF Spokesperson.