Know Your Customer platform launched

The resource contains information about seven million legal entities and individual entrepreneurs. Based on its own analytical data, the Bank of Russia has divided them into three groups, namely of low, medium and high risk levels (‘green’, ‘yellow’, and ‘red’). By now, according to the regulator, about 99% of companies belong to the ‘green’ group, 0.3% — to the ‘yellow’ group, and 0.7% — to the ‘red’ group.

If clients are in the ‘green’ group, transactions between them should be conducted without any restrictions. If both a bank and the regulator assign a ‘red’ rating to a client, the bank should immediately put a ban on almost all its transactions. Entrepreneurs who disagree with their inclusion in the high-risk group may appeal against such a decision to the Interagency Commission under the Bank of Russia, which includes Rosfinmonitoring, the Federal Customs Service of Russia, the Presidential Commissioner for Entrepreneurs’ Rights, as well as representatives of banking and business associations.

Information provided by the platform is auxiliary for banks. They should make their own final assessment of the fairness of their clients’ business in terms of anti-money laundering legislation.

‘The use of the platform will reduce regulatory burden on bona fide businessmen and save the resources of credit institutions which will be able to focus on preventing suspicious transactions,’ said Ilya Yasinsky, Director of the Bank of Russia’s Financial Monitoring and Currency Control Department. ‘We have previously tested the service with all banks and held meetings with them, provided detailed answers to all the questions they asked. Such preparation will help avoid technological problems and ensure the proper operation of the platform.’