Global anti-money laundering watchdog the Financial Action Task Force (FATF) has suspended Russia’s membership on the one-year anniversary of its full-scale invasion of Ukraine.
- Financial Action Task Force 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.
- The Paris based watchdog said that Russia still remains accountable for its obligation to implement the FATF Standards.
- FATF also announced the additions of South Africa and Nigeria to the “grey list” of countries under special scrutiny to implement standards to prevent money laundering.
Grey list meaning
- The Paris-based organization added South Africa and Nigeria, meaning clients at financial institutions in these countries are also likely to experience increased due diligence checks in international banking and finance.
- The consequences will also be felt on the state level when it comes time to seek credit or borrow from multilateral organizations and international financial institutions.
- The grey listing discourages investment, indicates an absence of rule of law and often results in the downgrading of a country’s investment grade or rating.
About FATF
- FATF is an intergovernmental organization that seeks to combat money laundering and terrorist financing.
- It 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.
- It is a global standard bearer of sorts in that it checks and rechecks to see if countries are following basic principles of financial regulatory oversight.
