On participation in MONEYVAL

Published: 09.07.2018

Rosfinmonitoring Deputy Director V. Glotov headed an interagency delegation of representatives of the Russian Ministry of Foreign Affairs, Russian Federal Security Service, Russian Ministry of Internal Affairs, Russian Ministry of Finance, Prosecutor’s General Office and the Bank of Russia to participate in the Plenary meeting of the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL).

In his welcoming remarks the Director of Directorate Information Society and Action against Crime, Jan Kleijssen, emphasized the measures taken to save funds in the context of the financial crisis in the organization in order to continue holding events scheduled by MONEYVAL and other committees in the current and coming years. Special focus was on importance of meeting the obligations and holding the evaluations of AML/CFT systems of the member-states, including Russia, in accorded timelines.

 One of the agenda’s items was discussion of the Committee’s accumulated experience in carrying out risk assessment. The importance of effective cooperation between the competent authorities, in particular, financial intelligence and LEAs, was underlined.

The starting point of the discussion of the mutual evaluation reports of Albania and Latvia was their understanding of proper ML/TF risks and the measures taken to minimize them.

Among the major deficiencies of Latvia’s report, pointed out by the experts, the following ones should be highlighted:

  • differences in understanding sectoral risks by regulatory agencies;
  • low level of cooperation between national authorities in ML investigation and prosecution;
  • lack of proper implementation of targeted financial sanctions in the field of countering the financing of WMD proliferation (PWMD).

With regard to the Albanian report, Tirana was criticized for the failure to implement a risk-based approach in the public and private sectors, as well as the regime for the confiscation of criminal assets (the disproportionate amount of assets under arrest and confiscation of the country's ML risks due to the high level of organized crime).

As a result both countries were put on the enhanced MONEYVAL monitoring which means annual reporting on correction of the identified weaknesses. Moreover they enter the pool of countries under consideration of the special FATF monitoring group– ICRG. The group is in charge of “grey” and “black” lists, which are reference points for the compliance services of the financial institutions all over the world.

In addition to the above, reports on the progress in improving the national AML systems of Armenia, Bulgaria, the Isle of Man, Poland, Slovakia, Croatia and Montenegro were discussed, as well as applications for removal from regular monitoring of Liechtenstein, Macedonia and Romania. The delegations of Warsaw, Sofia, Bratislava managed to quit this procedure. The Armenian partners demonstrated high results in improving the ratings received during the evaluation three years ago.

The presentation by the EU Commission expert David Schwander on the 5th AML/CFT Directive by the European Union revealed the new mechanism of compilation of high-risk non-EU jurisdictions lists. For the first time, Brussels has updated the previous version of this document proactively, without FATF reference. Previously, it had been updated only after significant changes in the international AML/CFT standards.

Now, in accordance with the approved provisions of the Directive, the EU will use additional criteria that go beyond the generally accepted requirements when forming a pool of high-risk states, in addition to the FATF "grey" and "black" FATF lists. In particular, it means  taking into account the unilateral restrictive measures taken by Brussels against third countries, the expanded interpretation of the FATF recommendations on the BO transparency, the powers of national competent authorities, the application of targeted financial sanctions and measures of customer due diligence (CDD) in the banking and non-financial sphere, as well as the level of international cooperation.  

Within preparation for the upcoming FATF/MONEYVAL/EAG mission to Russia in March 2019, Rosfinmonitoring and the Russian Foreign Ministry provided detailed information on  field-specific legislative innovations, the national program of capital amnesty, CFT projects  at international platforms, as well as one of the latest successful ML cases with the participation of foreign partners.

The final part of the Plenary meeting was chaired by the Rosfinmonitoring representative Alexey Petrenko (MONEYVAL Deputy Chairman).

On the sidelines of the session, bilateral negotiations were held on topical issues of operational cooperation with representatives of financial intelligence of Armenia, Bulgaria, Jersey, Guernsey, Italy, Cyprus, Latvia, Lithuania, Liechtenstein, Moldova, Poland, Serbia, France, Montenegro and the Czech Republic.

The next MONEYVAL plenary meeting will take place in Strasbourg in December 2018.