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. Last Updated: 07/27/2016

Moscow Accepted Into FATF

BERLIN -- The world body leading the fight against money laundering accepted Russia into its ranks Thursday, providing a boost to the country's international reputation and financial market.

The Financial Action Task Force, meeting in Berlin to update its standards in combating the flow of drug money, tax evasion and "terror financing," said Russia has made big progress in tightening its controls.

The efforts made by Russia, taken off the FATF's blacklist of noncooperating states only last October, were a "great success story," said Jochen Sanio, the German president of FATF.

He said Russia is now expected to exert pressure on its blacklisted neighbors, including Ukraine, to raise their defenses against money laundering, and it should form a bulwark against "hot money" flowing around Central Asia.

Russia had already earned observer status, and an assessment of its progress Thursday had been positive although deficiencies remained in some areas, Sanio said. Russia, for example, still needs to abolish a volume threshold below which it does not treat money laundering as a criminal offense, he said.

A country's FATF status helps determine its credit rating. Rating agencies judge blacklisted countries to be more risky for investors and assign them a lower creditworthiness ranking. That makes it more expensive for them to obtain credit.

Russian government spokesman Alexei Gorshkov told Interfax: "The government views this decision as recognition of the work carried out by the Cabinet in fighting financial abuses and money laundering."

Russia has in recent years abolished numbered accounts and changed them into named accounts as well as improved the organization of its banking sector.

"Russia plays an important role as a hinge between Europe and northern Asia in the battle against money laundering and the financing of terrorist groups and activities," said an internal FATF agenda obtained by Reuters.

"By admitting Russia, FATF hopes Russia will use its strong political and economic influence in the Community of Independent States to extend and employ FATF standards in this region."