On 11 October 2002, Russia was removed from the Financial Action
Task Force's (FATF's) International Blacklist of countries failing
to take sufficient precautions against money laundering. At the
same time, Russia was invited to become a FATF observer, before
obtaining full FATF membership as early as next year.
The Russian government welcomed the news since as
recently as last year the FATF recommended sanctions against Russia
for its repeated failure to comply with international measures
against money laundering. Russia was blacklisted in June 2000 as a
result of which significant reforms and tougher legislation were
pushed through by the Russian government (see related article
Although the banking sector remains vulnerable,
with transactions still being carried out offshore, Russian banks
are believed to have become more transparent in the last two years
as the result of the introduction of international accounting
standards (see related article 2) and the implementation of
additional capital controls (see related article 3).
Analysts suggest that Russia's removal from the
FATF's International Blacklist is a political rather than an
economic victory, inextricably linked to Russia's importance as an
energy supplier to the West. Even so, it is expected that the
FATF's decision will have a positive influence on the general
investment image of Russia.
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Related article 1
"Changes to Russian financial legislation", 18 October 2002
Related article 2
"Banking reform in Russia", 10 January 2002
Related article 3
"Russian banking reforms", 27 June 2002