The Financial Action Task Force (FATF), a global organization that sets standards to combat money laundering and terrorist financing, has suspended Russia’s membership due to Russia’s invasion of Ukraine. It is the first time that the FATF has suspended a country’s membership.
Despite being a historical move for the FATF itself, there is nothing much this move adds in practice for the businesses since comprehensive sanctions regimes against Russia were already enacted since the beginning of the invasion.
Ukraine had been asking for Russia to be added to the FATF blacklist, which would have imposed further restrictions and increased scrutiny on Russian financial transactions. However, the FATF opted to suspend Russia’s membership instead. While this move does not impose any new restrictions or sanctions on Russia directly, it does send a message that the FATF takes Russia’s actions seriously and is willing to take action against countries that violate its core principles. It also puts Russia in a difficult position, as it can no longer attend FATF meetings or access FATF documents, which could make it more difficult for Russian financial institutions to comply with international anti-money laundering standards.
Also, it’s true that there are already a significant number of sanctions in place that make doing business with Russia nearly impossible, the FATF blacklist would have been the last resort.
Anyways, the regular revision of black and grey lists by FATF is a great opportunity for you to consider it a trigger event and revise your compliance risk management framework in the part of country risk.
If you are struggling with the country risk definition, or revision of your framework or you have any other difficulties navigating the regulatory landscape – contact our experts and we will help you to ensure that your business is in compliance with the sanctions regimes applicable to it. Simply fill out the form below and we will reach out to you right away!
