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President of Russia Vladimir Putin: Mr Chikhanchin, as of July 1 Russia will chair the FATF, an international organisation fighting money laundering.
We have cooperated with our colleagues in this organisation for a long time now. In fact, it is here in the East, in former Soviet territory, that we are fostering relevant relationships with our colleagues and even helping organise this endeavour.
What do you see as the priorities of our chairmanship? How are relations for joint work with colleagues from other Russian departments and those of foreign partners developing?
Head of the Federal Service For Financial Monitoring Yury Chikhanchin: Indeed, last week the FATF, a group that develops policies to combat money laundering, held a plenary meeting. As you said, Russia is its next chair.
I think that here the credit goes to all ministries, departments, and especially you yourself, because you signed the respective executive order adopting the law [on combating money laundering]. It was a very difficult law that was stopped three times, even to the point where it was vetoed.
We believe that this gives us the opportunity to emphasise once again that Russia meets all FATF requirements, which are supported by the UN Security Council, the G8 and the G20. You talked about this at the recent G8 meeting.
This speaks to the fact that Russia’s system for combating money laundering currently meets all the requirements of relevant international forums. And because of this our country’s investment attractiveness is increasing.
What are our current objectives for our chairmanship? Of course, the first and most important task is to maintain the level, the bar set by the international community. Given that new standards now exist, we need to implement them.
And I think that the appearance of the law we have already talked about and that you supported – the law prohibiting illegal financial transactions – will give us the opportunity, together with the creation of a mega-regulator on the basis of the Central Bank, to meet the challenges we currently face.
Now about our tasks as the organisation’s chair: we are considering a few issues that I have already reported on. Of course, the first is introducing new standards in Russia and updating relevant legislation. With this new law, we have made amendments to more than 20 others. At present we still need to issue more than 20 Government resolutions and more than 20 interdepartmental documents, regulations, and about two presidential executive orders. A lot of work remains to be done.
Of course, this will give us the opportunity to focus on the challenges facing the FATF, in particular problems linked with beneficial ownership.
This problem was discussed in the G8, and we have a new legislative category for beneficial owners. Though [registering them] is a very difficult, arduous task, this will resolve the issue of offshore tax evaders to some extent.
The second set of issues concerns the affordability and expansion of electronic financial services (banking). This will give us the opportunity to somewhat reduce currency turnover.
But in this respect we need to realise that the criminal underworld is not idle: it is actively using digital wallets, Yandex.Money, and we must elaborate new policies and approaches together with all ministries and departments concerned.
And naturally, the third question we are raising is the issue of strengthening regional FATF-type bodies. Russia currently chairs the Eurasian Group [on Combating Money Laundering and Financing of Terrorism (EAG)] made up of former Soviet Union countries, China, India and Belarus.
I would like to say that at the regular plenary meeting last week, it was noted that we are the only regional grouping (of 180 countries evaluated by the FATF) that does not have a country on the black or grey list. First and foremost this is to Russia’s credit; it is also that of the entire Eurasian community, and of course yours too, because you have raised this issue many times.
Another problem that we must resolve is the question of training personnel because new standards have appeared. There must be experts within financial institutions, law enforcement agencies, the judiciary and government bodies. In total, there are around 200,000 employees working at various levels of authority to combat money laundering.
In this regard, we plan to create a so-called network institute, which brings together three Moscow universities, virtually of course. They are the Moscow Engineering Physics Institute where IT-specialists are trained, the Financial University under the Government of the Russian Federation (former Finance Academy under the Government of the Russian Federation) where experts in finance and credit work, and the Foreign Ministry’s Diplomatic Academy with its specialists in foreign languages and international law.
Several regional universities will join us in this network’s work: the major Pacific National University, the Siberian Federal University, the Southern Federal University, and four institutions from abroad. They will be linked by a single methodology and a unified system of education. We consider this a very good result.
I would like to say that in the coming days, a class of foreign students we are teaching will take their graduation exam. They will take their exam remotely, that is they will take it here, and representatives of the countries that sent them to study here will be present at the exams via videoconference and ask questions. Then they will hire their graduates to work for them. In other words, this is a big issue that needs to be addressed both within the FATF and the EAG. I firmly believe that we will accomplish the tasks we have been set.
And next year the FATF is turning 25. Russia has been entrusted to host a major plenary meeting here. About 800 people from 180 countries will come here; it will be a very big event.
Vladimir Putin: Good.
You already mentioned the need to reinforce work with the Central Bank. I am paying attention to this, and it really is very important, bearing in mind that a mega-regulator overseeing all our financial issues will be established on the basis of the Central Bank.
And after the legal framework you just mentioned has been consolidated, we must prepare a national plan to combat money laundering, tax evasion, and offshore tax evaders, while understanding which company is the ultimate beneficiary of this. This is what other countries, or at least many of them, do.
A great deal of work awaits us, and I very much hope that your service will make a significant contribution to it. It would be impossible to prepare such a national plan without your agency, so would I ask you to join in this work from its inception.