In an unprecedented move, the Financial Action Task Force (FATF) officially suspended the membership of the Russian Federation in February 2023. The decision was based on geopolitical instability stemming from the invasion of Ukraine, as well as Russia’s failure to uphold FATF’s AML/CFT principles. The suspension sent shockwaves through the global financial community, raising questions about the practical impact on cross-border financial activity and regulatory cooperation.

FATF’s action was not merely symbolic—it has tangible consequences for financial institutions worldwide. Member countries are now expected to increase scrutiny of transactions involving Russian individuals and entities. This includes intensified due diligence, reassessment of correspondent banking relationships, and potential limitations on access to the global financial system.

The suspension also elevates the importance of understanding geopolitical risks as part of AML compliance. Institutions are encouraged to review their exposure to Russian clients, reassess country risk ratings, and update sanctions screening protocols to align with evolving global standards. In addition, there is growing pressure on multinational firms to demonstrate that they are not enabling illicit flows linked to sanctioned jurisdictions.

For compliance professionals, the FATF decision reinforces the need for a robust geopolitical risk framework that is agile and data-driven. As global standards evolve in real-time, institutions must ensure that their AML programs can adapt quickly and decisively. This includes leveraging external intelligence sources, integrating real-time risk updates into monitoring systems, and fostering cross-border regulatory cooperation.

Source: FATF Statement on the Russian Federation
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