FATF suspended Russia's membership in the organization
FATF suspended Russia's membership in the organization
On February 24, the Financial Action Task Force on Money Laundering FATF completely suspended Russia's membership in the organization.
The relevant decision was announced on the organization's website http://bit.ly/3Y0fbdF
FATF explained the decision to suspend Russia's membership because the war against Ukraine contradicts the primary organization’s principles, which "aimed at promoting the security and integrity of the global financial system" and "grossly violates obligations regarding international cooperation and mutual respect."
At the same time, the Russian Federation is still responsible for fulfilling its obligations regarding implementing the FATF Standards and must continue to fulfill its financial obligations.
In addition, Russia will remain the Global Network’s member as an active member of the Eurasian Group on combating money laundering and financing of terrorism (EAG) and will retain the rights of EAG member.
How will the suspension of FATF membership affect Russia?
The FATF is an intergovernmental body whose task is to develop and promote strategies to combat money laundering at the national and international levels. Now the organization has 37 members-countries. FATF membership allows tracking the origin of funds when making payments between countries.
After suspending Russia's membership in the group, all global companies should be more careful and attentive when interacting with Russia and carefully assess the risks associated with such interaction. International jurisdictions must also strengthen their regulations and update guidance on market risks.
It is hoped that this FATF decision will help international networks still operating in the Russian Federation decide to withdraw from the market as soon as possible, which is marked as extremely risky.
Why is this step not a final victory for Ukraine in this matter?
FATF did not include Russia in its blacklist, as requested by Ukraine. The exclusion, not the suspension, of Russia's membership in the FATF and the country’s inclusion in the organization's blacklist is the most effective tool for limiting the terrorist country's access to the world economy.
UNIC welcomes the development in this matter and hopes for an early decision to include the aggressor country on the FATF blacklist.
We thank the Ministry of Finance of Ukraine and the State Financial Monitoring Service for the work done and the significant contribution to the promotion of this issue. Since the beginning of the full-scale war of the Russian Federation against Ukraine, more than 200 appeals have been sent to FATF member countries and various international organizations in support of the complete Russian Federation’s exclusion from the FATF and its inclusion in the FATF sanctions list.
