Money Laundering, Terrorism and Financial Institutions - USA Patriot Act Monitor

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10/27/2008 Evaluation of Russian Anti-Money Laundering/Counter Terrorist Financing Programs Notes Rapid Progress, but Continuing Presence of Criminals in Banking and Casino Sectors Complicates Enforcement Efforts

The Financial Action Task Force has posted its second mutual evaluation of the Russian Federation with regard to that country’s anti-money laundering and counter-terrorist financing programs. As to the FATF’s 40 Recommendations and 9 Special Recommendations, the Evaluation found Russia compliant on 10 items, largely compliant on 13, partially compliant on 21, noncompliant on 3, and found two Recommendations not applicable. By comparison, the mutual evaluation of the U.S. found the country to be compliant in 15 categories, largely compliant in 28, partially compliant in 2 and noncompliant in 4. Nevertheless, the Evaluation gives dramatic evidence of the increasing effectiveness of Rosfinmonitoring, the Russian financial intelligence unit, which now has 550 employees and a sophisticated software system that was able to handle 3,777,300 suspicious transaction reports in 2006. Officials of Russian regulators were very candid with the FATF evaluators and acknowledged continuing criminal involvement in financial institutions, particularly banks and casinos. Officials also spoke of corruption in some law enforcement bodies, but indicated that matters were much more under control now than they were five and more years ago. The Russian Evaluation will be summarized and analyzed in a forthcoming issue of the Monitor.

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