President of Russia Vladimir Putin: Mr Chikhanchin, we marked the 15th anniversary of the Financial Monitoring Service yesterday. I would like to congratulate all the employees. However, we agreed that you would tell me about the results of the service’s activities in greater detail.
Head of the Federal ServiceforFinancial Monitoring Yury Chikhanchin: Thank you very much, Mr President, for your congratulations. Indeed, we had a staff gathering yesterday and watched your video address. It was a gift and an assessment of our work.
Looking back, 15 years ago we probably never expected to achieve such results. You remember that our country was blacklisted back then; there were two attempts to pass the law, but first it failed in the Federation Council and later it was vetoed by the President. Some international contracts were terminated, we were not allowed to carry out transactions, some officials were even arrested at the time. What I mean to say is that we managed to fix everything.
Vladimir Putin: These are very revealing numbers – as of June 15, 2006, organised crime controlled 50 percent of private business, 60 percent of government-owned enterprises and 80 percent of the banks.
Yury Chikhanchin: That was taken from a report by the international community, when we were being blacklisted. Yes, indeed, things were really like that.
Today, of course, we have corrected the situation. Today we have met the standards required by the FATF [Financial Task Force on Money Laundering]. We are now active members of all international organisations dealing with preventing money laundering and funding terrorism.
We were able to assist our neighbours from the Eurasian group, the Central Asian nations, to set up similar systems. In fact, we have created a financial security belt.
We have been actively working on drugs, our requirements have been noted at the UN venue, we are working on ISIS, we have set up an anti-ISIS group, these are international activities.
We have achieved much in raising the financial literacy of the population. I can say that about 10,000 people engaged in banking and law enforcement have been trained in Russia. We also teach foreigners even from such remote countries as Peru, Afghanistan, Argentina and Mongolia.
We have established a networking institute uniting over 20 colleges both in Russia and abroad, where we have our chairs and teach students. At present, we have 200 foreign nationals studying with us.
We participate in different inter-agency commissions that have begun to operate, there over 30 of them. These are governmental commissions that allow us to apply the legislation and achieve real results.
If we look at the dynamics, the number of financial institutions in the country has decreased since 2000, which testifies to compliance with the law, and the volume of data provided has increased. This also is a result of compliance with the law, which we managed to achieve.
Currently, to improve the quality of our work with financial organisations, we have set up the so-called “personal office” which shows how law-abiding an enterprise is according to certain indicators, around two dozen of them. We have resolved several issues. Firstly, we have established information exchange with them, and secondly, the key thing is that we have formed a system of anti-corruption relations. That means we have separated those who do checks from the organisations being checked and monitor them remotely. If a violation occurs, we signal them, and they rectify the situation.
We have set up a compliances council where we work out major risks with bank representatives. Here are a few graphs that show how the rights we gave to the banks to independently suspend suspicious-looking transactions are working out. As a result, this year alone over 500,000 transactions were suspended, accounts closed. This shows that banks have started ridding themselves of shady schemes, cleaning out shell companies.
To be continued.