Former FATF President Accuses Russia’s FIU of Facilitating Money Laundering

By Koos Couvée

Russia’s financial intelligence unit, Rosfinmonitoring, facilitates state-sponsored money-laundering schemes and plays a key role in President Vladimir Putin’s efforts to maintain his grip on power, the former U.S. president of the Financial Action Task Force said.

Marshall Billingslea, whose one-year term as head of FATF ended in July 2019, said Wednesday that Rosfinmonitoring is “firmly” under the control of Russia’s Federal Security Service, or FSB, and primarily serves as an instrument of authoritarianism rather than an agency that combats financial crime.

“Putin’s control of the financial intelligence unit is designed to ensure that only state-sanctioned transactions are made in to or out of Russia,” Billingslea told attendees of an online event hosted by the ACAMS Nordics chapter. “But it also helps facilitate the ways … the Russian state has developed to launder money through the international financial system.”

Rosfinmonitoring, which is headed by KGB veteran Yury Chikhanchin, receives an average of nearly 20 million suspicious transaction reports a year and employs a staff of 800, according to a mutual evaluation report FATF published in December 2019 in which the intergovernmental group praised the agency’s effectiveness.

But that efficacy is applied in a very selective manner when it comes to identifying and halting illicit financial flows, Billingslea, who also served as the U.S. Treasury Department’s assistant secretary for terrorist financing from 2017 to 2020, said Wednesday.

Control over Rosfinmonitoring helps Moscow devise complex networks to obscure the origin of profits from a wide range of illicit activity, including corruption, sanctions evasion and arms sales, and move those funds through Western banks, the former U.S. official said.

These money-laundering schemes also serve to finance Russia’s clandestine activities abroad, including purchases of restricted NATO technology for its weapons program, relations with other authoritarian regimes around the world, and payments to military contractors doing the Kremlin’s bidding in Africa and the Middle East, he said.

“Putin can swiftly take control over the personal and corporate holdings and finances of anyone around him at any time,” Billingslea said. “Russian oligarchs well understand this fact, and that is one reason why so much of their wealth is concentrated outside of Russia, particularly in Europe.”

Billingslea’s criticism of Russia and the Russian financial intelligence unit comes two months after the Egmont Group, a global platform that counts 166 FIUs as members, issued an unprecedented statement warning governments against using financial crime investigations to silence political opponents.

The warning did not name any culpable jurisdictions, but arrived shortly after Russian officials charged political opposition leader Alexei Navalny with embezzling 588 million roubles—the equivalent of €6.8 million—in public donations to the anti-corruption group he chairs.

Navalny was detained and charged upon returning to Moscow in January after surviving a poisoning attempt that has been widely attributed to Russia’s security services.

“It was no surprise to see that in the weeks after the arrest of Alexei Navalny, Rosfinmonitoring declared that the network of the opposition leader was a terror network,” Billingslea said.

FATF raised eyebrows in December 2019, when it concluded in a mutual evaluation report that Russia’s controls against financial crime rank among the best in the world despite high levels of corruption and the prevailing view in the West that the country poses one of the largest money-laundering threats to Europe, the United States and other jurisdictions.

The report, which FATF published five months after Bilingslea’s term ended, specifically praised Rosfinmonitoring’s access to a wealth of financial data, tracing of illicit funds, use of “sophisticated technologies and [a] high degree of automation” to analyze suspicious activity reports, and help in triggering and advancing investigations into a wide range of crimes.

Contact Koos Couvée at

Topics : Anti-money laundering , Counterterrorist Financing , Corruption/Bribery
Source: Russia
Document Date: May 27, 2021