Financial Monitoring and Foreign Exchange Control Service
The Financial Monitoring and Foreign Exchange Control Service (the Service) develops and implements the Bank of Russia’s policy in the sphere of anti-money laundering, countering the financing of terrorism and proliferation of weapons of mass destruction (AML/CFT/CFP), and foreign exchange control.
The Service is focused on ensuring informational, analytical, legal, methodological, and organisational support for the Bank of Russia’s activities related to AML/CFT/CFP, foreign exchange control, and the state defence order, as well as supervision of credit institutions and non-bank financial institutions (supervised entities) with regard to their compliance in these areas.
The most important task of the Service is to take measures aimed at mitigating the risk of supervised entities’ involvement in fictitious transactions.
As part of proactive, risk-based and advisory supervision, the Service has set up methodological support for supervised entities, including prompt informing about possible risks in their clients’ operations and high-quality advisory assistance in adjusting their internal anti-money laundering processes. The practice of proactive and risk-based supervision is aimed at preventing risks associated with the activities of supervised entities and their involvement in fictitious transactions.
Seeking to ensure the compliance of supervised entities with legislative requirements for AML/CFT/CFP, foreign exchange control, and the state defence order, the Service continuously implements a set of various control and supervisory measures based on the risks of money laundering and terrorist financing emerging in the financial market and in the activities of individual market participants, among other factors.
For violations identified in the activities of supervised entities, the Service, acting within its remit on behalf of the Bank of Russia, applies supervisory response measures to the said entities and conducts a follow-up control over the implementation of prescribed measures.
To ensure the uniformity of approaches to supervisory activities, the Service organises, coordinates, and controls the work of subordinate financial monitoring and foreign exchange control units in Bank of Russia regional branches.
With regard to supervised entities, the Service organises and implements off-site supervision, including using AML/CFT supervision methodologies and instruments, and participates in the inspections of these entities.
The Service takes part in drafting laws, Bank of Russia regulatory and other documents on issues within its competence (in particular, it establishes requirements for AML/CFT internal control rules for supervised entities, the procedure for supervised entities to submit information to Rosfinmonitoring, the qualification of special officers responsible for internal control in the sphere of AML/CFT, and other requirements), issues information letters summing up the practice of application of Russian laws and requirements of international organisations, and ensures informational support for supervised entities.
To obtain information needed to exercise its control duties with regard to financial market participants, the Service provides methodological support for the reporting on operations of supervised entities and their clients, processes reports received by the Bank of Russia, and compiles consolidated statistics.
When implementing its broader functions, the Service ensures information exchange between the Bank of Russia and the Ministry of Finance, the Ministry of Economic Development, the Ministry of Defence, Rosfinmonitoring, the Federal Tax Service, the Federal Customs Service, and other authorities of the Russian Federation on AML/CFT/CFP, foreign exchange control, and state defence order issues.
The Service’s representatives participate in the activities of related international bodies and organisations, including the Financial Action Task Force (FATF), the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), and the Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG).
To ensure the compliance of the Russian AML/CFT/CFP legislation with global standards and best practices, the Service regularly studies and analyses international experience and the application of foreign laws.
The Service participates in the assessments of the Russian AML/CFT/CFP system by international bodies and organisations (the International Monetary Fund, the World Bank, the FATF) and interacts with foreign partners — supervisory authorities of other countries — on topical issues of bilateral relations.