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Countering Money Laundering and Currency Control

Legalisation of criminally obtained proceeds is a serious economic crime which can be closely connected to corruption, tax evasion, drug dealing or other criminal activities.

The introduction of ‘dirty’ money into the economy undermines financial and social relationships and the national economy itself. In some cases, criminal proceeds can be used to finance terrorism and to finance the proliferation of weapons of mass destruction.

In the modern world, much attention is paid to combating these issues at the international level. The development of international AML/CFT/CFPWMD standards, which are to be effectively implemented in national laws and enforced by countries, is carried out by the Financial Action Task Force (FATF), a specialised intergovernmental organisation.

In this country, the basic provisions governing AML/CFT/CFPWMD are established by Federal Law No. 115-FZ, dated 7 August 2001, ‘On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism’ (hereinafter, Federal Law No. 115-FZ), as well as a set of regulatory legal acts adopted in pursuance of Federal Law No. 115-FZ.

Funds transferred abroad in the banking sector, billions of rubles

Amount of cash-out transactions in the banking sector, in billion rubles

The system of AML/CFT/CFPWMD measures is implemented in the Russian Federation by the state, with the active and direct participation of the private sector. Participants in the Russian anti-legalisation system include federal executive bodies, the Bank of Russia, other government bodies and organisations, credit institutions, non-credit financial institutions, as well as enterprises and some professionals providing certain types of non-financial services, such as estate agents, etc. (the full list of entities implementing AML/CFT legislation is given in Article 5 of Federal Law No. 115-FZ)

As one of the key participants in the Russian AML/CFT system, the Bank of Russia regulates the activities of credit institutions and non-credit financial institutions in the field of AML/CFT/CFPWMD and monitors and oversees the compliance with statutory requirements by these entities. One of the most important tasks of the Bank of Russia in this area is the reduction of the level of ML/FT risk in the financial sector.

Credit institutions and non-credit financial institutions shall implement a wide range of measures aimed at preventing the use of the Russian financial system for illegal purposes (in particular, they shall identify customers, their representatives, beneficiaries and beneficial owners, monitor customer transactions, identify suspicious transactions, and inform Rosfinmonitoring (the Federal Financial Monitoring Service) about them in a timely manner, and, in cases established by law, refuse to carry out transactions).

The result of collaboration is a steady decrease in the volume of dubious transactions.

The Bank of Russia is also a currency control body and monitors FX transactions carried out by credit institutions and non-credit financial institutions.

Currency control is part of state policy and is aimed at ensuring the stability of the currency of the Russian Federation and the stability of the country’s domestic foreign exchange market. Basic provisions governing currency control are established by Federal Law No. 173-FZ, dated 10 December 2003, ‘On Foreign Exchange Regulation and Foreign Exchange Control’.

In modern conditions, currency control and AML/CFT/CFPWMD tools are applied by the Bank of Russia comprehensively to prevent unscrupulous economic agents from using the credit and financial sector for illegal purposes.

Department responsible for publication: Financial Monitoring and Foreign Exchange Control Department
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Last updated on: 24/09/2020