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. Last Updated: 07/27/2016

Ministry Pens Draft Law To Counter Laundering

The Finance Ministry has prepared an anti-money-laundering bill that will impose stricter monitoring of financial transactions, Kommersant reported Monday.

The daily paper published a copy of the draft law, which would give the government the right to monitor all operations that could possibly be used in a money-laundering scheme.

The Kommersant report appeared just four days after Russia was named for the second time on a blacklist of world banking centers that have not done enough to fight money laundering.

The Paris-based Financial Action Task Force, a body set up by the Group of Seven leading industrial nations named Russia on its first list last year. Russia, the Philippines, Lebanon and some exotic islands remained on the "noncooperative jurisdictions" list published again last week.

The monitoring bill includes most forms of cash transactions, anonymous accounts, money and securities transfers involving dubious offshore centers, as well as property dealings, suspicious loans, lotteries and other activities.

If passed, it will oblige all institutions through which such operations are carried out to keep strict records and automatically report them to a special body set up by the Interior Ministry, which will store and analyze the information.

Sergei Stepashin, chairman of the Audit Chamber, the government's financial watchdog, said last week that Moscow could not join the international convention on fighting money laundering for want of appropriate national legislation.

The FATF report added to Moscow's embarrassment after the jailing last month in New York of Pavel Borodin, a former Kremlin aide and a man who played key role in President Vladimir Putin's career, on a Swiss money-laundering arrest warrant.

Kommersant did not say when the bill might go to the State Duma. The government must approve the document first.

The draft also stipulates that banking secrecy cannot be used as a pretext for withholding information and will exonerate institutions that cooperate from damage claims by clients.

A separate clause allows Russian anti-money-laundering bodies to exchange information with similar agencies abroad as long as it does not harm Russia's national interests.

Washington and Paris both said last year they would consider financial sanctions of some form against countries that failed to conform to FATF guidelines.