FATF Upholds Russia’s Membership Suspension; Fails to Blacklist

The Ministry of Finance and Financial Intelligence Unit of Ukraine welcome the Financial Action Task Force’s (“FATF”) decision to uphold russia’s membership suspension at this week’s plenary meeting in Paris. 

However, despite the overwhelming evidence of russia’s increasing violations of the FATF standards and recommendations since the suspension, FATF member states failed to achieve a consensus for blacklisting. 

In February 2023, the FATF took the unprecedented step of suspending russia’s membership, deeming the country’s actions as running counter to the body’s goals of promoting cooperation and ensuring the security and integrity of the global financial system. The FATF highlighted russia’s dealings with blacklisted states and malicious cyber-activities. 

Since the suspension, russia has cemented military and financial ties with blacklisted North Korea and Iran. Russia supplied oil to North Korea – which is sanctioned by the United Nations – in exchange for military support and fired North Korean ballistic missiles on Ukrainian cities. Most recently, North Korea has sent its troops to Russia to support its invasion of Ukraine. Similarly, russia has procured ballistic missiles from Iran and strengthened banking and financial cooperation between the two countries. 

Russia is threatening the security and integrity of the global economy by allowing sanctioned states like North Korea and Iran a back door to enter and destabilise the international financial system. 

Cyberattacks emanating from russia continue to disrupt essential services and economies around the globe. For example, Russia has reportedly protected and directed prominent cybercriminal gang Evil Corp, which has carried out attacks in multiple FATF member-states.

The FATF has called on countries to stay vigilant about current and emerging risks that russia poses to the security and integrity of the global financial system. However, individual countries need not wait for global organisations’ leadership. Many governments have their own high-risk jurisdiction lists that they can use to insulate their economies from russia’s financial crime and intensifying rogue activities. 

The threats that russia poses to the proper functioning of the global economy grow as russia becomes more desperate to advance in its illegal war. Ukraine will continue to work with governments to help them gain a deeper understanding of the serious deficiencies in the russian anti-money laundering and counter-terrorism financing system and the resulting risks russia poses to their economies. We are confident that such cooperation will help counter russia’s financial crime and enhance the safety and integrity of the global financial system.