Following the start of a massive invasion, Ukraine has repeatedly insisted that Russia be included as a terrorist country on the International Group for Anti-Money Laundering (FATF) blacklist. In financial circles this is tantamount to a pariah country stamp where they avoid doing any business. Why the FATF has not yet applied this measure of influence to Russia and when that might happen.
On the anniversary of Russia’s full-scale invasion of Ukraine, the FATF has so far limited itself to an indefinite suspension of Russia’s membership in that organization. In his new review, “Russia and black money. An aggressor is on the FATF blacklist”, Focus It analyzes the possible consequences of this step.
As stated in a comment Focus Maxim Boyarchukov, Managing Partner of the law firm “Maxim Boyarchukov & Partners”, The suspension of Russia’s FATF membership means that all entities that engage in any dealings with the Russian banking system must exercise caution..
“Now most countries understand the realities of Russia’s war against Ukraine and the risks posed by the aggressor state for the international financial system,” said the interlocutor. Focus. “All states of the world, including those that have not yet imposed any sanctions on the Russian Federation, will be forced to implement enhanced verification of any transactions related to the financial system of the Russian Federation, and this should weaken the Russian economy, and they have problems with financing the war.”
However, as of today, it seems that FATF’s tools of influence against Russia are mostly unfinished. As stated in a comment Focus boyarchukov, Suspension of Russia’s FATF membership is not the same as its blacklisting, but acts as an intermediate stage. Therefore, such a decision is most likely not a complete victory for Ukraine..
Vitaly Shapran, an economist who is a member of the Association of Financial Analysts, explains that in order for the Russian Federation to be blacklisted by the FATF, it must meet certain criteria, such as lack of an internal anti-money laundering system and identification. Bank customers etc. Officially, such control systems operate in Russia, which clearly prevented the implementation of stricter measures against the aggressor country. However, it should be expected that the relevant functions in the Russian Federation will begin to deteriorate.
“Exclusion of the Russian Federation from FATF participants means the end of information exchange with it from most member states. Accordingly, it will now be more difficult to effectively combat money laundering in the Russian Federation, and this is the first step.” towards the blacklist,” Vitaly Shapran explains how the mechanism works.
According to Shapran, the further development of events will depend on the behavior of the Russian authorities. And here the expert recalls the emergence of joint economic projects between the Russian Federation and the Taliban and Iran; In this context, the blacklist does not seem as far away as it seems to some FATF officials, who are still evaluating the Russian Federation on official grounds. .
Recall that the weapons of Russian terrorism in Ukraine became the Iranian Shahed attack aircraft. And lately the media has been flooded with reports of the deepening partnership between Russia and Iran, including by military aircraft. This increases the tension in the region and causes concern in the world public opinion.
let’s make it clear Iran, which provides attack aircraft to Russia, is currently on the FATF blacklist along with the Democratic People’s Republic of Korea (DPRK) and Myanmar..
Another member of the black list, North Korea, and Russia have also recently deepened their relations. As he reported Focus Referring to the press service of the North Atlantic Alliance, NATO Secretary General Jens Stoltenberg said on January 30 that North Korea is supplying Wagner missiles for the Russian Federation’s combat operations against Ukraine.
Such ties with FATF blacklisted countries are likely to help Russia get into this “bad company” as soon as possible. But the journey can take years. The same Iran was blacklisted by the FATF in February 2020 after repeated warnings and an empty expectation of a response.
Maxim Boyarchukov, Adding Russia to the FATF blacklist would be a principled, sufficient and important step.. That is why Ukraine will continue to insist on this issue. according to the addressee Focus The consequences of blacklisting Russia by the FATF will be as follows:
- Establishment of universal control over the Russian financial system;
- making it harder for the aggressor to find means to circumvent sanctions;
- restriction of international trade;
- difficulty getting paid for export and paying for import;
- accelerates the outflow of capital from the country.
Previously Focus understood how and when the Russian assets detained abroad could be transferred for the restoration of Ukraine.
Source: Focus
John Holton is a seasoned author and journalist, known for his expertise in economics. He currently works as a writer at 24 news breaker, where he provides readers with in-depth analysis and commentary on the latest economic developments. With a background in finance and a talent for explaining complex economic concepts in a clear and accessible way, John’s writing is a must-read for anyone interested in staying informed about the economy.