The Egmont Group of Financial Intelligence Units, a platform through which 170 FIUs across the world share data on financial crimes, has suspended Russia’s membership for invading Ukraine, two sources familiar with the move told ACAMS moneylaundering.com.
The decision, made following a three-hour discussion at an extraordinary virtual meeting of heads of member FIUs on Wednesday, effectively bars Rosfinmonitoring, the Russian FIU, from accessing Egmont’s secure communications portal for receiving and relaying information to and from other FIUs on attempts to launder money or finance terrorism.
Rosfinmonitoring will also no longer receive the group’s typology reports, take part in joint analysis of financial intelligence or play any other role in the organization. The Egmont Group is expected to make its decision public Thursday or Friday.
The decision comes after Egmont in December 2022 revoked Rosfinmonitoring’s authority to host meetings, attend events in person and hold “formal leadership, advisory, and representative positions.”
“Trust is essential to the EG [Egmont Group],” then-Egmont chair Xolisile Khanyile, the former head of South Africa’s FIU, said in a statement that month. “Situations like the one currently taking place in Ukraine hamper … mutual trust among EG member jurisdictions and negatively affect the success of joint anti-money laundering and counter-financing of terrorism efforts.”
Khanyile also made note at the time of the Russian invasion’s “negative impact” on Ukraine’s FIU, the State Financial Monitoring Service.
Moneylaundering.com has yet to establish what events precipitated Rosfinmonitoring’s suspension, which follows a drawn-out technical process during which Russian officials were warned that such a move was possible.
Egmont makes decisions by consensus, which the group defines in its charter as an “agreement having noted and given due consideration to any formal and substantiated objection.”
Under Egmont’s rules, authority to judge whether an objection is substantiated or has been addressed falls to the group’s chair, a rotating position currently held by Poland’s Elzbieta Frankow-Jaskiewicz. The mechanism aims to ensure that no single member can block the group from reaching consensus on a decision.
The two sources familiar with Wednesday’s discussion, both of whom spoke to moneylaundering.com on condition of anonymity, said the Russian FIU was given an opportunity to make its case against a suspension.
More than 20 other FIUs also voiced their opposition to suspending Rosfinmonitoring, but the meeting’s chair found their concerns were unsubstantiated or had been addressed in the meeting, the sources said.
Rosfinmonitoring, which is headed by KGB veteran Yury Chikhanchin, receives nearly 20 million reports of suspicious transactions annually and employs around 800 personnel, according to the Financial Action Task Force’s report on Russia’s 2019 evaluation by the group.
The suspension will force Rosfinmonitoring to find alternative channels for exchanging financial intelligence with other FIUs.
Several FIUs in the European Union already ceased sharing information with their Russian counterpart following the launch of the Kremlin-ordered, all-out assault on Ukraine in February 2022. But a handful of other FIUs in the bloc continued cooperating with the Russian agency through Egmont, the two sources said.
The Financial Action Task Force marked the first anniversary of the invasion by suspending Russia’s membership in February of this year, four months after banning Russian officials from attending or otherwise participating in the intergovernmental group’s meetings.
In March, Russian national Igor Nebyvaev, then-executive secretary of Moneyval, FATF’s affiliate in Europe, was forced to resign following revelations about his family’s ties to the SVR, Russia’s Foreign Intelligence Service.
The Council of Europe, the human rights organization that hosts Moneyval, expelled Russia in March 2022, but Russian officials can still participate in the Eurasian Group and FATF’s other regional affiliates.
Egmont suspended and threatened to expel Nigeria’s FIU in July 2017 for repeatedly failing to keep details of suspicious transaction reports and other financial intelligence shared with it by other FIUs confidential, and operate independently of the Nigerian government. A similar lack of autonomy led to the suspension of El Salvador’s FIU from the platform in October 2018.
Both FIUs have since rejoined Egmont, which did not respond to questions from moneylaundering.com by press time.
“Egmont and its secure web portal play an integral role in the global financial crime architecture,” said Tom Keatinge, a director at the Royal United Services Institute in London. “But given Russia’s invasion of Ukraine and its rapprochement with countries such as North Korea, access to that service is clearly no longer appropriate.”
Contact Koos Couvée at firstname.lastname@example.org
|Anti-money laundering , Counterterrorist Financing , Sanctions
|October 19, 2023