New Delhi: Anti-money laundering watchdog the Financial Action Task Force (FATF) has suspended Russia’s membership over the Ukraine war.
“This is the first time a member of FATF is suspended,” FATF President Raja Kumar told a news conference in Paris. “Russia is effectively sidelined from the organisation,” he said.
In a statement, the FATF said that the Russian Federation’s actions unacceptably run counter to the FATF core principles aiming to promote security, safety, and the integrity of the global financial system.
FATF deals with money laundering and terrorism financing prevention. It sets standards for more than 200 countries and jurisdictions and seeks to help authorities tackle serious crimes, including drug smuggling, human trafficking and terrorism.
The Paris-based watchdog also said that Russia still remains accountable for its obligation to implement the FATF Standards.
Russia has denounced the decision calling it “a dangerous step”.
Anatoly Antonov, Russia’s ambassador to the United States, said the move by FATF will erode global efforts to combat money laundering, terrorism financing and the proliferation of weapons of mass destruction, Russian news agency Tass reported.
Ukraine had made repeated calls to exclude Russia from the organisation. Predictably, it welcomed the decision to suspend Russia. “It’s not enough but it’s an important step in the right direction,”
Ukrainian Finance Minister Serhiy Marchenko said. Ukraine is, however, not a member of FATF.
FATF members include 39 countries, including the United States, India, China and Saudi Arabia, and European countries Britain, Germany, France, and the European Union.
FATF on February 24 also added South Africa and Nigeria to its “grey list” of countries under special scrutiny to implement standards to prevent money laundering and terrorism financing. Morocco was taken off the grey list.
As of November 2022, only three countries were on the FATF blacklist: North Korea, Iran, and Myanmar. The FATF was set up in 1989 out of a G-7 meeting and has been characterised as effective in shifting laws and regulations to combat illicit financial flows.
Pakistan was recently removed from the grey list after four years. It was first put on the list in 2008, removed in 2009, and before adding it again in 2018, it remained under increased monitoring from 2012 to 2015.
India had protested Pakistan’s lack of action against cross-border terror groups responsible for attacks on India. New Delhi maintains that Pakistan must continue to take “credible, verifiable, irreversible and sustainable” action against terror groups emanating from territories under its control.
