Russian Federation Country Summary
Sanctions
EU & US sanctions in place
FATF AML Deficient List
No
Terrorism
Corruption
US State ML Assessment
Criminal Markets (GI Index)
EU Tax Blacklist
Offshore Finance Center
Please note that although the below Summary will give a general outline of the AML risks associated with the jurisdiction, if you are a Regulated entity then you may need to demonstrate that your Jurisdictional AML risk assessment has included a full assessment of the risk elements that have been identified as underpinning overall Country AML risk. To satisfy these requirements, we would recommend that you use our Subscription area.
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Anti Money Laundering
FATF Status
The Russian Federation is not on the FATF list of AML Deficient countries, however, due to the invasion of Ukraine, FATF has suspended the FATF membership of the Russian Federation.
Compliance with FATF Recommendations
The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Russia was undertaken in 2024. According to that Evaluation, Russia was deemed Compliant for 6 and Largely Compliant for 31 of the FATF 40 Recommendations. It remains Highly Effective for 2 and Substantially Effective for 4 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.
Sanctions
As a UN member, Russia must support UN sanctions aimed at maintaining international peace and security. The UN has established 31 sanctions regimes since 1966, which include various measures like economic sanctions and arms embargoes, with 15 ongoing regimes as of October 2023. These sanctions are designed to consider the rights of those targeted and are often part of broader strategies that include peacekeeping and peacebuilding efforts.
In response to Russia's invasion of Ukraine, the US and its allies have imposed extensive sanctions targeting major Russian financial institutions and individuals. These sanctions aim to isolate Russia from the global financial system and disrupt its economic activities, while also addressing attempts by Russia to circumvent these sanctions through intermediary countries.
Bribery & Corruption
Rating |
0 (bad) - 100 (good) |
|---|---|
| Transparency International Corruption Index | 22 |
| World Bank: Control of Corruption Percentile Rank | 16 |
Corruption in Russia remains a significant issue despite government efforts to combat it, with Transparency International ranking the country 129th out of 180 in its 2020 Corruption Perception Index. Entrepreneurs frequently encounter corruption, particularly during permit applications and procurement processes, with a notable increase in bribery cases reported in early 2021. Although Russia has implemented some anti-corruption measures, such as requiring public officials to disclose property acquisitions, enforcement is often ineffective due to a corrupt judicial system and inadequate protection for whistleblowers.
Economy
The Russian Federation ranks 28th out of 190 economies in the World Bank’s Doing Business 2020 Report, indicating some improvements in its regulatory environment, although significant structural issues persist that hinder foreign direct investment. The judicial system is biased towards the state, and high levels of corruption among officials exacerbate risks for investors. Additionally, ongoing sanctions from the EU and U.S. since 2014 have further restricted business activities and increased operational costs.
The investment climate in the Russian Federation is characterized by significant challenges, including a biased judicial system favoring the state, high levels of corruption, and ongoing EU and U.S. sanctions that restrict business activities and increase operational costs. Despite the establishment of programs like Special Investment Contracts (SPICs) to attract foreign investment, the regulatory environment remains complex, with foreign investors facing limitations in strategic sectors and a lack of transparency in the approval processes. Overall, these factors contribute to a cautious approach from foreign investors, who must navigate a landscape marked by legal and bureaucratic hurdles.
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- Risk Analysis
- Corruption
- Economy
- Sanctions
- Narcotics
- Executive Summaries
- Investment Climates
- FATF Status
- Compliance
- Key Findings
