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Russia's FATF membership suspended

24 февраля 2023

The Financial Action Task Force (FATF) has suspended Russia's membership in the organization, according to its website.

The organization said that Russia's actions allegedly contradict the principles of the organization and constitute a "gross violation of obligations for international cooperation and mutual respect".

“Considering the above, the FATF has decided to suspend the membership of the Russian Federation. The Russian Federation remains accountable for its obligation to implement the FATF Standards. The Russian Federation must continue to meet its financial obligations. The Russian Federation will remain a member of the Global Network as an active member of the Eurasian Group on Money Laundering (EAG) and retain its rights as an EAG member”, so the statement of the FATF.

In its suspension statement, the FATF does not state that it will automatically blacklist the Russian Federation, but only warns: “all jurisdictions should be alert to possible emerging risks from the circumvention of measures taken in order to protect the international financial system and take the necessary measures to mitigate these risks”

The main influence will be for the countries that remain partners of the Russian Federation - India, China, the countries of South America and Africa - now they will need to find conventional mechanisms for communication in the financial sector so as not to incur restructuring by the FATF and other regulators.

In turn, Rosfinmonitoring stated that "Such a decision is groundless, does not rely on established procedures and goes beyond the mandate of this organization." According to our agency, this decision "goes against" the FATF's goals of protecting financial systems and the economy from threats.

“At the same time, this FATF decision does not entail any obligations and restrictions for financial institutions in Russia and abroad. The Russian “anti-money laundering” system will continue to function in accordance with the current legislation,” the statement says. The department also stressed that Russia will continue to counteract crimes, including through cooperation "with interested countries."

Source: https://www.vedomosti.ru/finance/news/2023/02/24/964244-fatf-chlenstvo

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