Regional Features of Compliance with FATF Requirements

Abstract

Increasingly expanding international requirements in the field of combating money laundering and terrorist financing (AML/CFT) force the public and financial sector to seek a balance between the rising costs of their implementation and sanctions threats for non-compliance. A number of scientific publications describe regional AML/CFT cooperation in the European Union (EU) as an example of such a balance. Some EU countries coordinate their actions within the framework of the Financial Action Tasks Force on Money Laundering (FATF), which is the methodological centre of the global anti-money laundering movement. Russia is a member of the FATF and its two regional groups: MONEYVAL, organized by the Council of Europe, and the Eurasian Group (EAG) initiated by Russia itself, which unites Russia's neighbouring, mainly Asian, countries. This study covers the results of assessments of compliance by EU and EAG countries with FATF requirements in order to study approaches to AML/CFT regional cooperation and to identify problems arising in this process and prospects for international cooperation. The methods of comparative and graphical analysis were used. The authors show that deep regional integration of lawmaking is not in itself a fundamental factor in achieving equally high rates of compliance with FATF requirements. Indifference to matters of monitoring compliance with approved regional anti-money laundering standards allows particular EU countries to act in the national interest, contrary to the 40 FATF recommendations and the goals of the global AML/CFT regime. On the contrary, the EAG countries demonstrate steady progress in the introduction of legislation and practical implementation of FATF requirements, which indicates their collective awareness of the benefits from financial information transparency and the possibility of exchanging this information at the international level.