Financial crime watchdog could blacklist Russia – Politico

Ukraine has reportedly been pushing the Financial Action Task Force to rank Moscow as a high-risk jurisdiction

The Financial Action Task Force (FATF) will consider whether to place Russia on its blacklist next week, Politico has reported, citing a confidential document it has seen. Ukraine has recently ramped up its campaign to pressure the Paris-based agency to blacklist Moscow, the outlet noted.

The FATF is a global intergovernmental organization that seeks to counter money laundering, financial crime, and the financing of terrorism. Being placed on the blacklist can damage a nation’s financial reputation, as it signals problems in the rule of law and discourages foreign investment.

The organization will convene on October 22 at Ukraine’s behest to discuss possible action against Russia, Politico wrote on Tuesday.

Kiev first approached the FATF asking to rank Russia as a high-risk jurisdiction shortly after the outbreak of the Ukraine conflict in April 2022, the outlet reported.

Russia, a member of the FATF since 2003, was suspended in February 2023, with the organization claiming that Moscow’s military operation in Ukraine contradicts its core principles. Russia’s Central Bank and Federal Financial Monitoring Service criticized the decision as baseless and political.

The organization, however, has so far held back from including Russia in its black or gray list. Ukraine has “consistently – albeit unsuccessfully – submitted new evidence” to get Moscow downgraded, Politico wrote.

“Close” cooperation between Russia and blacklisted countries North Korea and Iran, as well as Moscow’s funding of private military companies such as the Wagner Group, have been named by Ukraine as reasons to blacklist Russia. Kiev also claims that Telegram Messenger and cryptocurrencies help Russia finance terrorist activities and engage in money laundering.

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Any move against Russia would require a consensus of the FATF’s member states, among which are the country’s leading trade partners and fellow BRICS members: China, India, Brazil, and South Africa.

Ukraine has recently been rocked by corruption scandals involving high-ranking government officials. US Department of Defense Inspector General Robert Storch said in an interview last month that Ukraine “has had long-standing issues with corruption.”

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The European Commission set up a watchdog in June to monitor and prevent the embezzlement of the billions of dollars of EU funding allocated to Kiev as part of the bloc’s plan to finance Ukraine in its conflict with Russia.