Russia’s money laundering risks – what does the latest FATF report mean in practice?
Kateryna Boguslavska, 26 February 2020
Russia’s risk level in the Basel AML Index has hit a record low following a December 2019 Financial Action Task Force (FATF) assessment that rated the country’s anti-money laundering and counter terrorist financing (AML/CFT) systems as reasonably effective.
The Basel AML Index is the only independent, data-based index of the risk of money laundering and terrorist financing (ML/TF) around the world. Russia’s overall risk score has fallen from 5.75 to 5.60 out of 10, where 10 equals the highest assessed risk of ML/TF. It remains in the medium/high-risk category, reflecting in particular its vulnerabilities to a high level of corruption and to political and legal risks.
The next Expert Edition update of the Basel AML Index will reflect these changes. The Public Edition, which is released annually, will be updated in mid-summer.
Any indications of progress in tackling money laundering and terrorist financing are welcome. However, policymakers and analysts will need to take into account features of the FATF methodology and other factors that may influence a country’s ML/TF risk rating before drawing conclusions.
Russia’s case illustrates why, when it comes to combating corruption and money laundering, nobody should take numbers at face value.
