At its highest levels, Russian corruption over the past 20 years has been disguised by networks of shell companies and facilitated by foreign banks willing to turn a blind eye to state embezzlement, according to Karen Dawisha, a political science professor at Ohio-based Miami University.
This time last December, one might reasonably have expected that 2014 would be a year of modest changes for the anti-money laundering and sanctions compliance sector. Then came JPMorgan Chase, BNP Paribas and a convoy of Russian tanks to quash that notion.
Whatever the effectiveness of sanctions meant to sway Russia's involvement in Ukraine, one thing is certain: they've worsened the country's capital flight problem. By year's end, approximately $128 billion will have moved abroad, up from $63 billion in 2013, according to Russia's central bank.
European lawmakers in a resolution Thursday asked the EU's executive branch to consider barring Russian banks from the world's largest interbank messaging platform in response to violence in Ukraine.
The expansion of Western sanctions targeting Russia will require banks to closely vet additional types of credit and transactions tied to financial, energy and defense firms, according to attorneys.
The European Union Tuesday further restricted Russia's access to the continent's financial markets and energy technology industry and promised targeted sanctions against individuals and entities on Wednesday.
U.S. sanctions against 17 Russian individuals and companies, including three banks and the head of one of the nation's largest energy companies, will raise more questions than answers for compliance officers.
Although sanctions on Russian nationals and companies might seem fairly innocuous at first blush, compliance departments at European banks are finding the task of identifying designees unusually difficult, say legal experts.
International banks are bracing for economic sanctions against Russian officials beyond those announced Monday by Western nations, according to compliance officers.
Anti-money laundering enforcement actions against financial institutions issued by the Central Bank of Russia have sky rocketed over the past two years. What's up with that?
U.S. banks should consider increasing their scrutiny over transactions originating from Russia as widespread allegations of election fraud is expected to fan political instability and capital flight, say analysts.