Financial Monitoring and Currency Control Department
The Financial Monitoring and Currency Control Department elaborates and implements the Bank of Russia’s policy in the area of anti-money laundering and combating the financing of terrorism and the proliferation of weapons of mass destruction (AML/CFT/CFP), and in the area of currency control.
The Department’s key tasks include information and analytical, regulatory, methodological, and organisational support of the Bank of Russia’s activity in AML/CFT/CFP, currency control, and the state defence order. The Department also organises and exercises supervision over the operation of credit and non-bank financial institutions (supervised institutions) as regards their compliance with the laws in the above areas.
The essential objective of the Department is to implement measures mitigating the risk of supervised institutions’ involvement in dubious transactions.
The Department carries out proactive and risk-based advisory supervision, and for this purpose it provides methodological support to supervised institutions, which comprises prompt notification about potential risks in their clients’ transactions and high-quality consulting assistance for supervised institutions to correct their in-house anti-money laundering procedures. The proactive risk-based supervision approach is aimed at preventing risks at supervised institutions and avoiding their considerable involvement in the conduct of dubious transactions.
In order to ensure that supervised institutions comply with the laws on AML/CFT/CFP, currency control, and the state defence order, the Department implements on an ongoing basis a complex of various control and supervisory measures, which include those with account of money laundering and terrorism financing risks that can arise in the financial market or in the operation of its individual participants.
In case any violations are revealed in supervised institutions’ activity, they are subjected to supervisory response measures that are implemented by the Department within its competence and on behalf of the Bank of Russia. The Department also carries out follow-up control over the fulfilment of these measures by supervised institutions.
For the purpose of consistency in the approaches to implementing supervisory measures, the Department organises, coordinates and controls the work of the functionally subordinate financial monitoring and currency control units in the Bank of Russia’s regional branches.
The Department arranges and carries out remote supervision of supervised institutions. This includes the use of the methods and tools developed by the Department for remote supervision in the area of AML/CFT. It also takes part in the inspections of supervised institutions.
The Department is engaged in the development of draft laws and prepares draft regulations and other documents of the Bank of Russia on the issues within its competence (specifically, it stipulates the requirements for supervised institutions’ internal control rules in the area of AML/CFT, for the submission of information by supervised institutions to the Federal Financial Monitoring Service, and for the qualification of competent officers responsible for internal control in AML/CFT, and other requirements). The Department also issues information letters summarising the practice of the application of Russian laws and international organisations’ requirements, and provides information support to supervised institutions.
In order to collect information needed to exercise its supervisory powers in relation to financial market participants, the Department provides methodological support for reporting on supervised institutions’ and their clients’ transactions, processes reporting submitted to the Bank of Russia, and prepares aggregate statistics.
In the area of domestic affairs, the Department ensures communication between the Bank of Russia and the Ministry of Finance, the Ministry of Economic Development, the Ministry of Defence of the Russian Federation, the Federal Financial Monitoring Service, the Federal Tax Service, the Federal Customs Service, and other public authorities on the issues of AML/CFT/CFP, currency control, and the state defence order.
The Department’s representatives are engaged in the work of dedicated international authorities and organisations, including the Financial Action Task Force (FATF), the Committee of Experts of the Council of Europe on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), and the Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG).
In order to ensure that the Russian laws on AML/CFT/CFP are in line with global standards and best world practices, the Department regularly studies and analyses international experience and the practice of the application of foreign legislation.
The Department is engaged in the assessments of the Russian AML/CFT/CFP system carried out by international authorities and organisations working in this area (International Monetary Fund, World Bank, and FATF), and cooperates with foreign partners — supervisory authorities of other countries on urgent issues of the bilateral relations.