Ukraine Calls on FATF to Add Russia to Blacklist

Ukraine says Russia has engaged in money laundering, sanctions evasion, terrorism financing, human trafficking, proliferation financing, and cyber-attacks.

Ukraine’s Ministry of Finance and Financial Intelligence Unit is calling on the FATF (Financial Action Task Force) to blacklist Russia over the increasing risks the country presents to global financial security.

In February, the FATF suspended Russia’s membership and called on all jurisdictions “to remain vigilant of threats to the integrity, safety and security of the international financial system arising from Russia’s war against Ukraine.”

At the time, the FATF expressed concerns over reports of arms trade between Russia and UN-sanctioned jurisdictions, as well as “malicious cyber-activities” emanating from Russia.

In a statement on Thursday (8 June), Ukraine says Russia has continued to violate the FATF standards by engaging in money laundering, sanctions evasion, terrorism financing, human trafficking through the theft of Ukrainian Children, and facilitating the proliferation of weapons of mass destruction (WMD).

“A state violating the FATF standards, regardless of its size, political influence, or contribution to the global economy, must be held to account and blacklisted,” said Ukraine finance minister Sergii Marchenko.

“Russia places nuclear weapons in neighbouring Belarus, trades weapons with blacklisted Iran, finances terrorism through Wagner and other proxies, cooperates with North Korea on its nuclear programme, launches massive cyber-attacks on Ukraine and other states, and uses crypto to launder dirty money. These are attacks on global security, which the FATF was created to help counter.”

The statement also outlines “a range of new violations” Russia has committed since its FATF membership was suspended.

> ALSO READ: The Financial Action Task Force’s Challenge with Russia by RUSI’s Fatima Alsancak (16 May 2023)

Ukraine says the FATF’s “strongest action” available is to put Russia on its so-called “blacklist”, which would label it as a high-risk jurisdiction, meaning all FATF jurisdictions would have to apply enhanced due diligence and effective countermeasures when doing business with the country, which would limit Russia’s access to foreign markets.

“This will protect global financial security, help close off existing loopholes in sanctions regimes and help stop the unprovoked and illegal war against Ukraine,” the head of Ukraine’s FIU Service Igor Cherkaskyi.

The FATF is expected to decide at its plenary on June 19-23 in Paris.

Bloomberg reported last month that Russia has been applying pressure to governments such as India, threatening to freeze defence and energy deals if they don’t block any move at the FATF that could result in blacklisting.

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