Financial Crime World

Russian Federation Tightens Know Your Customer Requirements to Combat Financial Crimes

The Threat of Money Laundering in Russia

The legalization of criminally obtained proceeds, or money laundering, poses a significant economic threat to Russia’s financial stability and social relationships. To combat this issue, the country has been working closely with international organizations.

Anti-Money Laundering and Combating the Financing of Terrorism Laws

According to the Financial Action Task Force (FATF), Russia’s anti-money laundering (AML) and combating the financing of terrorism (CFT) laws are based on Federal Law No. 115-FZ, which was enacted in 2001. This law requires a range of measures to prevent the use of Russian financial systems for illegal purposes.

Role of the Bank of Russia

The Bank of Russia plays a key role in implementing AML/CFT regulations and monitoring banks’ compliance with statutory requirements. The central bank has implemented various measures to reduce the risk of money laundering and terrorist financing, including:

  • Customer due diligence
  • Transaction monitoring
  • Reporting suspicious transactions to the Russian Financial Intelligence Unit (Rosfinmonitoring)

Know Your Customer Platform

On July 1, 2022, the Bank of Russia launched its Know Your Customer Platform (KYC Platform), which provides critical information about potential and existing clients’ involvement in suspicious transactions.

Currency Control

In addition to AML/CFT regulations, the Bank of Russia is also responsible for currency control, which aims to ensure the stability of the Russian ruble and the country’s domestic foreign exchange market. The central bank monitors FX transactions carried out by banks and non-bank financial institutions to prevent unscrupulous economic agents from using the credit and financial sector for illegal purposes.

Comprehensive Approach

The Bank of Russia has taken a comprehensive approach to preventing financial crimes, combining AML/CFT and currency control tools to ensure the stability of Russia’s financial system. By implementing these measures, the country is better equipped to combat financial crimes and maintain economic stability.