Ukraine calls on FATF to include Russia in black list

KYIV. Feb 9 (Interfax-Ukraine) – Russia should be denied access to the world economy for undermining global financial security, one of the important steps along this path will be its inclusion in the black list of the Financial Action Task Force (FATF), Minister of Finance of Ukraine Serhiy Marchenko has said.

“This is perhaps the most effective tool to limit terrorist access to the global economy, as it forces all states to apply enhanced due diligence to any transactions related to the financial system of a blacklisted jurisdiction,” he said.

“This will significantly increase the cost of doing business with Russia and effectively make it impossible to finance an illegal war of aggression,” the Finance Minister said during an online discussion Countering Russian threats to global financial security organized by the Atlantic Council think tank.

This month, FATF members will meet in Paris to consider further action against Russia. The Ministry of Finance of Ukraine, together with the State Financial Monitoring Service, systematically take measures to isolate Russia in the field of financial monitoring and call on other states to assist in this process and support the final exclusion of Russia from the FATF and its inclusion in the black list, the ministry added.

Earlier, at the June 2022 plenary meeting, the FATF decided to suspend Russia’s rights as a member of the organization and limit its participation in the activities of the FATF. In October of that year, the organization took further measures to limit Russia’s membership benefits, including limiting its ability to participate in the work of the FATF and prohibiting participation in regional groups as a member of the FATF.

“By forcibly invading Ukraine, broadly supporting corruption and financing terrorism, Russia completely ridicules the rules based on the international order, and yet Russia maintains a foothold in the global system,” Marchenko stated.

According to him, keeping Russia in the FATF, created to combat money laundering, is on a par with maintaining its place in the UN Security Council, which goal is to prevent wars.

The finance minister stressed that it had been established that Russia was collaborating with various terrorist groups and blacklisted states, including the Taliban, Hezbollah and the Assad regime, North Korea and Iran, not to mention the Wagner PMC.

Timothy Ash, a senior sovereign strategist at BlueBay Asset Management, who took part in the discussion, stated that Russia was preparing for a possible reflection of sanctions and their prevention long before the start of a full-scale aggression against Ukraine. “During the last decade, Russia has used its resources, its revenues from oil and raw materials, etc., to corrupt Western business, Western politics, and academic think tanks. This money has been used very well, huge lobbying efforts have been made to undermine response from the West in response to the invasion and support for Ukraine, and also to mitigate the impact of sanctions,” the expert said, calling the money “dirty.”

“The available data for Armenia, Georgia, Azerbaijan, Kazakhstan, especially Turkey, and also, I think, the Gulf countries,” shows Russia’s continued wide access to deposit/withdrawal of funds, Ash said.

He admitted that among the billions of Russian injections coming, for example, to Turkey, there are not only the funds of Russians who have decided to flee the mobilization or who do not like the regime, but also the money of the regime itself, “which actually seeks to park abroad so that they can be used to circumvent sanctions to buy critical resources and to use to corrupt governments around the world to their advantage.”

Ash also drew attention to the recent issuance of a banking license by the UAE to a subsidiary of a Russian bank.

The BlueBay Asset Management strategist, commenting on the issue of the seizure and confiscation of Russian funds, also called for a “crystal clear” message to all regimes about the consequences for committing genocide, war crimes and violations of international law. “I just think the private property rights argument is ridiculous, to be honest,” Ash opined.