The 3rd international workshop "Effective Supervision as a Mechanism for Ensuring Transparency and Stability of the Financial System" was held on September 20-21 in Moscow

The workshop was traditionally held under the auspices of the Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG) – whose presidency is now held by the Russian Federation – with the organizational support of the International Training and Methodology Centre for Financial Monitoring (ITMCFM) and the State University of Management (SUM).

More than 150 experts from the public and private sectors of the CIS countries (Belarus, Kazakhstan, China, Kyrgyzstan, Russia, Tajikistan and Uzbekistan) and Armenia, which is currently holding the status of observer in the EAG, took part in the workshop. The purpose of the workshop was to share experiences and best practices in AML/CFT supervision and to prepare countries for the FATF mutual evaluation. 

"The meeting will allow us, on the one hand, to familiarize ourselves with the latest approaches to private sector-focused supervision and communication practices, and on the other, to receive feedback from financial institutions on the prospects of improving the effectiveness of compliance procedures," said Rosfinmonitoring Deputy Director Galina Bobrysheva.

Speaking to the participants, Vladimir Nechaev, EAG Executive Secretary, urged the countries to ignore the fact that the latest round of EAG mutual evaluations had just begun, and focus instead on commencing an urgent and comprehensive work of putting together the materials highlighting the effectiveness of the efforts undertaken by both the public and private sectors, including through collection of statistics and preparation of notable case studies and examples.  

Participants showed particular interest in the overview of the key findings of the mutual evaluations of compliance with the revised FATF standards – presented by Mr. Schaffer, a highly reputable international appraiser and Deputy State Attorney of Israel – that have already been completed in a number of countries.

Another focus of attention was a presentation on implementation of such new communication tools as  Personal Account and the Compliance Council (Russia). A lively discussion centred around the building of information systems capable of extracting beneficial ownership information from open sources (China), remote identification and account opening (Belarus and Russia), new approaches to risk management in the implementation of FinTech projects (China, Belarus and Russia) and the typologies research on the identification of individuals linked to terrorism and drug trafficking (Russia).

The recommendations drawn up by the workshop participants will be used to further improve national AML/CFT systems in Eurasia. 

Recommendations of the 3rd International Workshop "Effective Supervision as a Mechanism for Ensuring Transparency and Stability of the Financial System"

Participants highlighted the relevance of the comprehensive work to improve cooperation between supervisors and the private sector as a key element of the AML/CFT framework, as well as the importance of further improvements to the methodology and tools of the risk-based approach.

EAG countries, as part of their preparation for the mutual evaluations, need to focus on the following elements of a strategy for improving the effectiveness of national AML/CFT systems: 

  1. Develop internal control systems of financial institutions with an emphasis on improving the quality of STRs and developing feedback mechanisms based on various formats of interaction between the public and private sectors
  2. Facilitate the implementation of all available mechanisms for involving representatives of the non-financial professions sector in the national anti-money laundering systems, as well as to continue the EAG-wide efforts to share experience in this area.
  3. Take steps to boost the private sector's awareness of ML/TF risks through the use of various information exchange channels
  4. Introduce innovative – including remote (contact-free) – tools for monitoring supervisory response measures based on the risk assessment outcomes
  5. Provide for the practical application of FinTech projects and simultaneous introduction of ML/TF risk management models

Participants stressed the importance of carrying out risk modelling prior to the adoption of legislative changes to enable practical application of innovative financial products and technologies.

Participants called for a further EAG-based dialogue between the public and private sectors, taking into account the regional specifics of the financial industry's development and the correspondent relations between financial institutions in Eurasia.