On July 25, 2018 in Yekaterinburg under the chairmanship of the Plenipotentiary representative of the Russian President in the Ural Federal District N.Tsukanov a coordination meeting with LEAs and supervisory authorities of the region took place. The event was dedicated to the preparation for the fourth round of mutual evaluations of the Financial Action Task Force (FATF).
Within the framework of this round of the FATF mutual evaluations an on-site mission of the assessors to the Russian Federation is scheduled. In this regard, at the instruction of the Head of the Presidential Executive Office A. Vayno on the basis of the federal districts jointly with the representatives under the leadership of Rosfinmonitoring a series of meeting is held. The meetings are aimed at qualitative preparation of the territorial LEAs and supervisory authorities to the upcoming evaluation.
In his welcoming remarks N.Tsukanov declared that not only the prestige of Russia at the international arena would depend on the outcomes of the evaluation but also the state of the national AML system.
«The experts will focus on the results of elimination of money laundering risks. They will examine such issues as relevance of financial investigations for LEAs and supervisory authorities, ML and TF investigations, confiscation of criminal proceeds and means of committing a crime», - the Plenipotentiary representative of the Russian President in the UFD said, highlighting the fact that information collected for the meeting «shows that AML efforts in the UFD are not sufficient».
Thus, according to the Plenipotentiary representative, the present capacities of the financial intelligence are not used to the full extent. In the first half of 2018 following the financial investigations of the UFD Rosfinmonitoring department 71 criminal cases were initiated. Of these, the liquidation of funds - only 6 cases, which is less than 1% of all financial investigations. At the same time confiscation of the arrested money and other property by courts of the Federal district wasn't applied absolutely.
The State-Secretary – Rosfinmonitoring Deputy Director P. Livadnyy briefed the participants of the meeting that the Russian President V. Putin on May 30 approved the Concept of AML/CFT System Development. The concept is based on 5 risk zones.
«First of all, we are referring to the financial risks, risks associated with the expenditure of budgetary funds, corruption risks linked with the mentioned ones, risks of terrorist financing and drug trafficking risks», - explained P. Livadnyy.
He underlined that on the one hand the level of the abovementioned risks should be reduced as much as possible, and on the other we should demonstrate to the FATF the effectiveness of the AML system.
«The FATF evaluation should show to the global network whether our activities match our words. We have no right to fail», - declared P. Livadnyy.
He recalled that the main purpose of the AML system was to deprive the offender of the income received from the illegal actions, from the integration of these funds into the legal financial system. According to the Deputy Director of the Russian financial intelligence, the present Russian system is of a preventive, barrier nature.
He also called for strengthening the supervisory activities. «It is of particular importance, from the FATF point of view, for financial institutions and other subjects of the AML activities to designate among their clients businesses’ BOs, namely natural persons. It is also important to improve the quality of suspicious transactions reports received by Rosfinmonitoring», - highlighted P. Livadnyy.
The Rosfinmonitoring Deputy Director stated, that generally the performance of the Russian anti-money laundering system «impress the international community», especially the high level of coordination, interaction and unity of the composing bodies. «But the practical element can and should be improved», - he added.
«AML system performance is one of the most effective tools which allows to free the economy of criminality and shadow assets. Let’s help our country together», - P. Livadnyy called the participants.
Deputy Director G. Bobrysheva further summed up the meeting with the supervisory authorities and the private sector of the region held the day before at the Ural Chief Directorate of the Central Bank of the Russian Federation, recalling once again the special role of financial institutions in AML/CFT.
The Head of the UFD Rosfinmonitoring Interregional Department A. Kardapoltsev declared that in the run-up to fourth round of the FATF expert mission one of the main areas of the UFD AML system participants’ activity should remain constant improvement of identification of relevant risks and threats in AML/CFT, including the ones of the regional character.
«Today we can say that the collaboration has allowed him to build reliable barriers to the penetration of criminal proceeds in the financial sector of the region. This conclusion is confirmed by the decreasing volume of suspicious transactions, including illegal withdrawal of funds in cash and abroad», - A. Kardapoltsev briefed.
The rates of illegal encashment in 2017 reduced more than 2-fold, the volume of funds withdrawn offshore from the region’s territory last year decreased more than 2 times compared to 2016 and 8 times compared to 2015.
Separately, the Head of the Interregional Department noted the activation and involvement of supervised entities to cooperate in the remote mode using the mechanism of the Personal account on the website of Rosfinmonitoring.
Rosfinmonitoring is the center of assessment of risks derived from money laundering, financing of terrorism and proliferation of weapons of mass destruction, as well as elaboration of counter- measures.
In 2018, the Russian Federation will have to undergo an audit of the on-site assessment mission of the Financial Action Task Force (FATF). Following its results it will be decided whether the Russian Federation comply with the international standards in the field of combating money laundering and financing of terrorism (AML/CFT).
According to the outcomes of the previous assessment in 2008, the FATF experts identified a number of shortcomings (including inadequate transparency of information on beneficial owners and control over legal entities), which led to the placement of Russia on regular monitoring.
In September 2014 after successful presentation of the Russian report on progress to the MONEYVAL Plenary, our country was removed from the regular monitoring until the next evaluation. With a low compliance rating in 2018 an enhanced monitoring regime will be introduced along with economic sanctions.
Given the importance of upcoming tasks for the preparation to the FATF evaluation the President of the Russian Federation created a special Commission which structure included representatives of the General Prosecutor's Office, Interior Ministry, Federal Security Service, Federal Customs Service, Investigative Committee and the Federal Tax Service, Russian State Assay Office, Roskomnadzor, Ministry of Justice of the Russian Federation and the Central Bank. The Commission is headed by the Director of Rosfinmonitoring.
The Commission is charged with ensuring the joint work and coordination of the activities of all state bodies and organizations involved in the preparation for the FATF assessment.
The methodology for assessing the AML/CFT systems was approved by the FATF in 2013 and involves consideration of two complementary components: technical compliance and effectiveness.
Technical compliance is meeting the FATF 40 Recommendations, while the effectiveness is capacity of the AML system’s participants to achieve immediate outcomes (IOs) in elimination of ML/TF risks.