Russia's exclusion from FATF to limit its ability to influence new anti-money laundering rules – McFaul-Yermak group

Russia’s exclusion from FATF to limit its ability to influence new anti-money laundering rules – McFaul-Yermak group

Exclusion of Russia from the Financial Action Task Force (FATF) will limit its ability to influence the new rules for combating money laundering in the world, according to a statement to the McFaul-Yermak international group on Russian sanctions.

The statement notes that back in April 2022, the McFaul-Yermak group recommended that Russia be excluded from the FATF.

“If Russia is excluded from the FATF, it will lose the ability to influence the new anti-money laundering rules with the help of new financial technologies [such as virtual assets and NFTs],” the text of the document says.

In the event of exclusion from the FATF, Russia would also lose the ability to participate in mutual evaluations and approve mutual evaluation reports, and its trade with the rest of the world would be disrupted due to the difficulty in obtaining export and import payments. Such restrictions would be useful in cases where Russia would be looking for new buyers for its oil.

In addition, having Russia blacklisted by the Financial Action Task Force would limit Russia’s ability to evade sanctions, as the current sanctions regime often allows Russian companies to circumvent sanctions against the financial sector by structuring operations through one or another Russian bank that was not sanctioned.

Blacklisting Russia would also reduce foreign direct investment and likely speed up capital outflows. At the same time, foreign companies will also face much higher investment costs in Russia. Foreign banks and other financial institutions will impose significant additional due diligence when dealing with any legal entity in Russia.

As an example, it is noted that after the Russian invasion of Ukraine and the commission of war crimes, several international organizations excluded or suspended the activities of Russia, in particular, the Council of Europe and the UN Human Rights Council.

Fuente: interfax.com.ua

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