A coordination meeting with the region's law enforcement and regulatory authorities to discuss preparations for the FATF 4th round mutual evaluations was held on 19 December 2018 in St. Petersburg. The meeting, chaired by P V. Livadny, state-secretary – deputy director of Rosfinmonitoring, was attended by V A. Sevrikov, deputy plenipotentiary representative of Russian President in the Northwestern Federal District.
As part of the latest round of the FATF evaluations, assessors are expected to visit the constituent entities of the Russian Federation. In this regard, on the instructions of the head of the Presidential Administration, A E. Vaino, Rosfinmonitoring has been organizing a series of meetings across Russia designed to prepare the regional law enforcement and supervisory authorities for the upcoming evaluation.
In his opening speech, V A. Sevrikov reminded the participants that the Russian President on multiple occasions focused on the danger to the national security of any country posed by money laundering and other forms of illicit funding.
V A. Sevrikov:
"The relevance of this issue for the Russian Federation is particularly high. Hence, the placement of the efforts to boost the resilience of the country's economy against the risks associated with these offences at the top of our joint agenda."
According to the plenipotentiary representative of the Russian President, there are five areas in Russia responsible for the majority of money laundering proceeds: corruption, the public sector, drug trafficking, the financial sector and terrorist financing.
V A. Sevrikov:
"With respect to the NWFD, over 47,000 predicate offences for money laundering were detected in the district from 2013 to 2017, but only 510 money laundering offences. After analysing the situation, the obvious question to ask was, where lies the problem? Could it be in the lack of coordination of joint efforts to ensure the simultaneous detection and investigation of acquisitive crimes and related money laundering?"
State-Secretary – Deputy Director of Rosfinmonitoring P.V. Livadny informed the participants that the Russian President was closely monitoring the developments around the upcoming evaluation with regular updates from the director of the Russian financial intelligence unit, Yury Chikhanchin.
P V. Livadny:
"The FATF assessment is extremely important for Russia, since this organization, in addition to having a depoliticized agenda, is notable for its professionalism and maximum immersion in the AML/CFT systems of the assessed countries, with assessments conducted on a regular basis and in respect of all counties without exception. This time it's Russia's turn to undergo it. This is a system of international measures that apply to all countries of the world. Importantly, countries that fail to meet the assessment criteria become subject to certain internationally recognized (including by the Russian Federation) sanctions, including – in the worst-case scenario – restrictions for the country's financial sector and all its business contacts."
As noted by the deputy director of Rosfinmonitoring: "assessors' focus today is not so much on the existence of rights and institutions as on the effectiveness and specific practical results."
P V. Livadny:
"In this regard, a successful assessment – achieving the results that would allow us to state that the Russian AML/CFT system meets international standards – is key to the fulfilment of Russia's political, reputational and economic objectives, including the safeguarding of Russia's interests throughout the world."
I N. Loskutov, head of Rosfinmonitoring's NWFD office, said that in the run-up to the FATF evaluation, participants in the NWFD's AML/CFT system should focus their efforts on making continuous improvements to the system for the identification of ML/TF risks and threats, including those specific to the NWFD.
I N. Loskutov:
"The most important thing is to have actual results in areas that are the focus of this round of mutual evaluations."
Participants also highlighted the importance and usefulness of the meeting with the region's supervisors and representatives of the private sector, held on the previous day at the RF Central Bank's Northwestern General Directorate office.
Rosfinmonitoring acts as a national centre for the evaluation of threats to national security posed by money laundering, terrorist financing and the financing of the proliferation of weapons of mass destruction, as well as for the development of measures to counter these threats.
In 2018, Russia is due to undergo an assessment by the FATF on-site evaluation team, whose findings will impact the conclusion about the extent of its compliance with international anti-money laundering and countering the financing of terrorism (AML/CFT) standards.
During the previous assessment in 2008, the FATF assessors identified a number of shortcomings (including the lack of transparency with regard to beneficial ownership information and control over legal persons), resulting in Russia's placement in a regular follow-up process.
In September 2014, following the presentation at the MONEYVAL Plenary meeting of its 3rd follow-up report, Russia was removed from a regular follow-up process pending the next mutual evaluation. Should Russia's rating for compliance with the FATF standards be low in 2018, the country will be placed on an enhanced follow-up process, triggering the application of economic sanctions.
Given the importance of the upcoming FATF assessment, the Russian President has established an ad hoc committee, comprising representatives of the country's Prosecutor General's Office, Interior Ministry, Federal Security Service, Federal Customs Service, Investigative Committee, Federal Tax Service, Assay Chamber, Roskomnadzor, Justice Ministry and the Central Bank, and headed by Rosfinmonitoring director, tasked with promoting cooperation and coordination between all government agencies and organizations involved in the preparations for the FATF assessment.
The FATF methodology for assessing the AML/CFT system, adopted in 2013, focuses on two complementary components: technical compliance (with the FATF 40 Recommendations) and effectiveness (the ability of the AML/CFT system participants to achieve immediate outcomes (IOs) in eliminating ML/TF risks.