The Financial Action Task Force (FATF), the global financial watchdog, has suspended Russia’s membership in the organization on the first anniversary of the Kremlin’s invasion of Ukraine.
T. Raja Kumar, the president of the Financial Action Task Force, announced that Russia’s membership had been revoked for the first time due to its violation of the group’s principles promoting the security, safety, and integrity of the global financial system.
The suspension of Russia, which had been a member since 2003, was a result of its involvement in the war in Ukraine, which contravenes FATF’s commitment to international cooperation and mutual respect. Consequently, Russia is no longer permitted to attend FATF meetings or access its documents, and it is accountable for adhering to the organization’s anti-money-laundering standards.
Since June of last year, Russia has been barred from holding any leadership or advisory roles, participating in decision-making on standard-setting, peer-review processes, and governance and membership issues.
All of these measures effectively mean that Russia is sidelined from the organization and will remain suspended.
T. Raja Kumar – president of the Financial Action Task Force
The global financial watchdog has urged all jurisdictions to remain watchful for threats that may arise from Russia’s involvement in the war in Ukraine, particularly in terms of potential emerging risks from circumventing measures. In response, Russia’s Federal Financial Monitoring Service criticized the decision, stating that it was unfounded and went beyond the organization’s mandate.
The suspension from FATF reduces Russia’s influence on FATF decisions, potentially creating a higher level of risk attached to financial transactions with Russia by international financial institutions. However, Russia remains liable for membership dues if it intends to reapply for membership in the future.
Although Russia has not been blacklisted, Ukraine’s Ministry of Finance welcomed FATF’s decision to suspend Russia, calling it a recognition of Russia’s failure to meet FATF standards and pledged to continue working with FATF members to advocate for Russia’s inclusion on the blacklist in the future.
The Financial Action Task Force included Nigeria and South Africa in its “gray list” but took out Morocco and Cambodia. The gray list comprises territories that have committed to collaborating with the FATF to rectify shortcomings in their counter-terrorism financing systems within specified timeframes and are subject to additional assessments.
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