Translated material
Banks will go on reconnaissance
The financial monitoring service intends to strictly monitor large cash transactions
Russian banks will have to transfer even more information about their clients' transactions to the Federal Service for Financial Monitoring (FSFM). At yesterday's conference dedicated to the fight against money laundering in the banking system, the head of financial intelligence, Viktor Zubkov, announced that a bill would soon be submitted to the government, according to which all data on cash transactions in the amount of 600 thousand rubles or more. will go to the FSFM. He is confident that the government and parliament will approve the project. Market participants consider this initiative not very successful, since banks will have to send even more documents to the Federal Financial Markets Service. But the bankers who had gathered to listen to Mr. Zubkov should have been pleased by his other message - the head of the FSFM admitted that in fact he had never laid claim to the supervisory functions of the Bank of Russia (as is known, the topic of removing supervision from the structure of the Central Bank arose among a number of State Duma deputies in February of this year year). Moreover, he promised that the Central Bank will continue to deal with this matter, since the regulator is doing a good job of it.In ten minutes of his speech, Viktor Zubkov managed to say a lot. Most of all, bankers did not like the idea of the head of the Federal Financial Markets Service to oblige them to disclose information about all cash transactions worth more than 600 thousand rubles. Now the service necessarily monitors the transactions listed in the anti-money laundering law, in addition, the bank sends it data on transactions that it considers not relevant to the business activities of the enterprise. But since there is no concept of “economic activity” in the law, everyone assesses the suspiciousness of cash transactions as best they can. Every day, Russian banks send about 20 thousand documents to the FSFM.
“With the advent of the new law, several times more messages will be sent to Rosfinmonitoring. The question is how informative this will be for the service itself,” says Tatyana Smirnova, head of the financial monitoring department of Promsvyazbank. In her opinion, it would be more useful to introduce criteria for questionable transactions. “The initiative has been discussed for about a year, but so far we have been talking about cash transactions only for legal entities and entrepreneurs,” says Alexey Sedov, head of the financial control service of the Bank of Moscow. -- If mandatory control of all cash transactions begins, there will be a flood of messages. There should be restrictions on the types of clients, and I think they will appear at the discussion stage.” However, not everyone present at the conference was unanimous in their opinion. “Banks often send messages about all such operations for reinsurance, so I don’t think this will greatly increase their work,” says Anatoly Aksakov, president of the Rossiya association and State Duma deputy.
The head of the FSFM proposes, however, not only to tighten the requirements for banks, but also to allow them not to open accounts for suspicious clients. So far in Russia it is very rare that a financial institution has the right to refuse to provide services to individuals and legal entities. Mr. Aksakov has already prepared a proposal to allow banks not to open accounts for suspicious clients and sent them for approval to the Central Bank and Rosfinmonitoring. True, Mr. Aksakov proposed simply refusing to open an account without explaining the reasons, but they decided to soften the requirements in order to avoid possible discrimination against private clients. It is proposed to introduce into the Civil Code the concept of a “special account of a private person,” which should be opened in any case, but with some restrictions, for example, on money transfers or other transactions and their volume.
Mr. Zubkov also spoke about the results of his department’s activities. Last year, the FSFM conducted 7,931 financial investigations, which is 33% more than in 2005 and twice as much as in 2004. Based on the results of every second inspection, Rosfinmonitoring sends materials to law enforcement agencies.
Thus, today the effectiveness of the service’s investigations is 53%, and in the West it is from 10% to 30%, Zubkov said. But what is surprising: as the efficiency of the FSFM increases, the number of illegal operations also increases. “There has been a sharp increase in the number of credit institutions that specialize in shadow financial services using a large number of shell companies,” complained the head of the FSFM, adding that recently there has been a flow of shadow financial transactions from Moscow to the regions. Finally, Mr. Zubkov informed the bankers that a delegation from the International Anti-Money Laundering Organization (FATF) would visit them in the fall for an inspection.
Those present at the conference liked the Central Bank's initiatives to combat illegal funds in the banking system much more. Director of the Department of Financial Monitoring and Currency Control of the Bank of Russia Elena Ishchenko first of all thanked the head of the Federal Financial Markets Service, since “for the first time I heard a positive assessment” of Rosfinmonitoring about her work. According to Ms. Ishchenko, sometimes banks are forced to violate the requirement of the Federal Financial Markets Service to provide information on transactions on time - in the event that we are talking about “other people’s” payments that go through them. Therefore, a representative of the Central Bank believes, banks should be allowed not to report real estate transactions and leasing operations. She had to continue to the stormy and prolonged applause of the bankers. “There is no need to shelve it. This will reduce the number of violations of deadlines for submitting information to Rosfinmonitoring,” she concluded.
“Real estate transactions or leasing are not banking transactions,” says Ms. Smirnova from Promsvyazbank. “Now banks, if such payments go through them, have to request additional information from leasing companies or from the registration chamber.” Leasing companies themselves are subject to the law on money laundering and inform the FSFM themselves, and, in her opinion, registration authorities could better report real estate transactions. “Such experience, in particular, was in the European Union: not only banks, but also lawyers, realtors, etc. were required to report suspicious transactions,” says Elena Sorokina, senior legal consultant at AKG Finexpertiza.
“We will take into account the proposals of the Central Bank and will begin work tomorrow,” Mr. Aksakov promised yesterday. The entire package of amendments to the anti-money laundering law will be submitted to the Duma in the spring session, “although the arrival of the FATF created some problems,” he said. “It turns out that the FATF monitors changes in legislation in the country where it is going to conduct an inspection, and writes this down as a minus. We were asked to wait with the amendments until the commission left. But until all of them are agreed upon, the necessary time will pass,” said Mr. Aksakov.