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Ukraine Urges FATF to Blacklist Russia Amid Allegations of Rule Violations

Updated: Oct 26, 2023

Ukraine has called on delegates at the Financial Action Task Force (FATF) meeting in Paris to consider blacklisting Russia from the global anti-money laundering body. These calls come in the wake of allegations that the Kremlin has been using various tactics to manipulate certain FATF members to remain within the organization, all while deepening its relationships with already blacklisted nations.

Ukraine Urges FATF to Blacklist Russia Amid Allegations of Rule Violations

Ukraine's Financial Intelligence Unit (FIU) has presented evidence suggesting that Russia's cooperation with countries like Iran and North Korea has significantly intensified since the last FATF plenary in June. Notably, Russian President Vladimir Putin reportedly admitted to financing the Wagner Group from the state budget, a move that blatantly violates FATF's rules and standards.

The Ukrainian Finance Ministry emphasized the urgency of the situation, stating, "This additional evidence calls for an urgent escalation of actions by FATF." FATF delegates are convening in Paris for a week-long meeting from October 23 to October 27.

In a joint statement, the Ministry of Finance of Ukraine and the Financial Monitoring Service of Ukraine noted, "The evidence shows Russia to have significantly increased its violations of FATF standards since the last plenary in June." These violations include the admission by Putin regarding Wagner Group financing, intensified collaboration with FATF-blacklisted countries like Iran and North Korea, and the flourishing arms trade between these nations, all in direct breach of UN sanctions and FATF standards.

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The statement also pointed out that Russia has failed to prevent the use of its cryptocurrency exchanges for processing funds linked to terrorist and criminal organizations.

Ukraine further alleged that Russia has escalated attempts to pressure FATF member states into supporting them in violation of FATF's rules-based processes and procedures. These tactics include pressuring African nations to ratify Russia's observer status at the Eastern and Southern Africa Anti-Money Laundering Group and seeking support from countries like China and Saudi Arabia by citing the protection of trade relations. Russia has also threatened to amend key commercial and defense agreements with India unless they support blocking further action by FATF.

Ukraine's Finance Minister, Serhiy Marchenko, highlighted the need for action, stating, "Russia is making a mockery of FATF's principles and using underhand tactics to try and prevent further restrictive measures meant to counter its risks to global financial security. This blatant politicizing of a neutral, rules-based process cannot go unnoticed; Russia must be blacklisted by FATF, and a relevant statement detailing risks should be issued to warn the international financial community."

Igor Cherkaskyi, the head of Ukraine's Financial Intelligence Unit, emphasized the growing concern, saying, "Russia has never been closer to the world's most dangerous regimes and terrorist organizations. The evidence is indisputable that Russia's illicit activities threaten global peace and security. Russia's ever-increasing violations of international norms demonstrate that today the protection of international financial security must be a global priority."



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