AML/CFT Landscape in Russia in Need of Regulatory Control

MOSCOW, May 7, 2013 /PRNewswire/ --

• BankersAccuity present findings from the 11^th International AML/CFT Conference in Moscow

BankersAccuity, the global standard for payment efficiency and compliance solutions, today provided an assessment of money laundering and financial terrorism in Russia following their attendance at the recent International AML/CFT Conference hosted by Association of Russian Banks, Federal Financial Monitoring Service and the Bank of Russia.

The regulatory environment for Anti-Money-Laundering (AML) and Combatting Financial Terrorism (CFT) in Russia is drastically underdeveloped. Global sanctions are officially invalid unless confirmed by President Putin under a Russian Directive and there is a scarcity of legislation and terminology to address Politically Exposed Persons (PEPs).

With numerous cases of illicit financial activity in the country, financial institutions in Russia are increasingly under pressure from foreign counterparties to comply with international sanctions and AML screening. Whilst, in Moscow for the International AML/CFT Conference, BankersAccuity hosted an event for Russian compliance officers providing education on the 'Identification of PEPs, compliance monitoring and transaction efficiency' and received feedback from attendees that there is uncertainty on how to comply within the constraints of Russian regulations. This is all the more critical now that the Russian Central Bank has brought in the 375-P legislation focusing "On the requirements for internal control in order to combat money laundering and terrorist financing."

375-P came into force on 29 April 2012, following the latest requirements from Financial Action Task Force (FATF). A key component of this legislation encourages organisations to apply a risk based approach in monitoring for money laundering activity focusing on offshore entities and ultimate beneficiaries.  Financial institutions had until 29 April 2013 to modify their AML/CFT systems accordingly, or risk facing action.

Yet with small monetary penalties in place and gaps in the legislation meaning that requirements could be superficially applied to satisfy Central Bank inspectors, many compliance experts in Russia feel that 375-P is not tight enough to deter money laundering in Russia.

"It is clear that AML/CFT compliance in Russia has a way to go in meeting FATF Recommendations and international standards" comments Hugh Jones, President and CEO, BankersAccuity. "The Russian Federation is taking steps to rectify this in the long run by presenting Draft Law № 196666-6 to combat illegal financial transactions. With global money laundering fines and regulatory scrutiny at an all-time high, Russian organisations need to act now to bring perpetrators of financial crime to account. At BankersAccuity, we're striving to assist Russian compliance officials in navigating the regulatory landscape, applying globally recognised best practices and solutions in order to combat illicit financial activity in the region".

Notes to the Editors

About BankersAccuity:

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