Outcomes of October’s FATF Plenary: the call for all jurisdictions to be vigilant to current and emerging risks from the circumvention of measures taken against the Russian Federation in order to protect the international financial system is reiterated. The suspension of Russia’s membership in the FATF continues to stand

From October 21 to 25, 2024, the State Financial Monitoring Service of Ukraine (under the quota of the Council of Europe MONEYVAL Committee and with the support of the EU Anti-Corruption Initiative in Ukraine (EUACI) project) took part in the regular FATF Plenary meeting and meetings of the relevant Working Groups in Paris (French Republic).

 

During the FATF Plenary Week, a number of issues related to global measures taken by the FATF and its members in the field of combating money laundering, financing of terrorism and proliferation financing (AML/CFT/CPF) were considered.

 

It was important for Ukraine to consider further sanctions against Russia for its violation of the FATF Standards, which continue to generate daily growing AML/CFT/CPF threats and risks.

 

According to the FATF official information following the Plenary meeting, the suspension of the membership of the Russian Federation continues to stand. Following the statements issued since March 2022, the FATF reiterates that all jurisdictions should be vigilant to current and emerging risks from the circumvention of measures taken against the Russian Federation in order to protect the international financial system.

 

We remind you that following the Plenary meeting in February of this year, the FATF adopted the relevant Statement, according to which, FATF members note with concern the potential risks to the international financial system, including growing financial connectivity of Russia with countries subject to FATF countermeasures, risks of proliferation financing, and malicious cyber activities and ransomware attacks. Due to the gravity of these risks, many FATF members are taking proactive measures to protect themselves and the global financial system.

 

«The FATF calls upon all jurisdictions to continue to remain vigilant due to the above-mentioned risks. As they have done since the Russian Federation commenced its war of aggression, FATF members will continue to monitor the situation and the risks posed to the global financial system. As a suspended member of the FATF, the Russian Federation still remains accountable for its obligation to implement the FATF Standards.

 

Also, given the second anniversary of the Russian Federation’s unprovoked war against Ukraine, the FATF recalls its Statement of 24 February 2023».

 

It is worth recalling that in June of this year, the FATF issued an updated statement on the Democratic People’s Republic of Korea (DPRK). In the Statement following the October Plenary meeting, the FATF continues to remain concerned by the DPRK’s continued failure to address the significant deficiencies in its anti-money laundering and combating the financing of terrorism (AML/CFT) regime and the serious threats posed by the DPRK’s illicit activities related to the proliferation of weapons of mass destruction (WMDs) and its financing.

 

The FATF notes that despite calls for action to (1) Terminate correspondent relationships with DPRK banks; (2) Close any subsidiaries or branches of DPRK banks in their countries; and (3) Limit business relationships & financial transactions with DPRK persons, DPRK has increased connectivity with the international financial system, which raises PF risks.

 

Given the DPRK’s strategic military and economic partnership with the RF, this should be considered in the context of a direct connectivity to the RF and its risks.

The FATF also urges countries to adequately assess and account for the increased proliferation financing risk of DPRK. The FATF has indicated that despite termination of the 1718 Committee Panel of Experts mandate, it will monitor the measures to comply with DPRK targeted financial sanctions and the implementation of countermeasures against DPRK. Ukraine continues to support this activity of the FATF.

 

Also, the FATF emphasizes that Iran has failed to address its strategic deficiencies in its anti-money laundering and counter-terrorist financing system and reiterates its call for all jurisdictions to apply countermeasures to protect against the terrorist financing risk emanating from Iran.

 

In such circumstances, there is concern over public information about the close cooperation between the RF and Iran in the financial, economic and military spheres, which may affect these countries’ compliance with the FATF Global Standards.

 

At the end of the FATF Plenary, the Head of the State Financial Monitoring Service of Ukraine, Igor Cherkaskyi, noted:

“The suspension of the RF’s membership in the Financial Action Task Force does not grant it immunity for further violations of the FATF Mandate. We are conducting hard formal and informal technical work within the FATF and continue to raise the issue of the risks posed by the RF to the Global environment for combating proliferation financing, terrorist financing and money laundering.

 

Communication with the delegations of the FATF member states and the leadership of the organization ensures the FATF’s steadfast support for Ukraine, which is suffering from the RF’s invasive war.

 

In connection with the growing threats associated with the RF’s increased cooperation with the DPRK and Iran, we urge foreign jurisdictions to actively integrate these risks into their national risk assessments. In addition, we recommend strengthening the guidelines for effective risk assessment of RF’s financial connectivity with the mentioned countries included in the FATF blacklist.”

 

The State Financial Monitoring Service of Ukraine will continue to take measures aimed at addressing the risks and threats posed by the RF in the area of money laundering, terrorist financing and proliferation financing, as well as to impose sanctions on the aggressor country.