{"id":3251,"date":"2021-06-20T12:23:00","date_gmt":"2021-06-20T12:23:00","guid":{"rendered":"http:\/\/mediateka.online\/learnrussian\/monitoring-for-middlemen-in-another-bid-to-counteract-undesirable-organizations-russian-banks-will-be-required-to-verify-all-transfers-from-abroad.html"},"modified":"2021-06-20T12:23:00","modified_gmt":"2021-06-20T12:23:00","slug":"monitoring-for-middlemen-in-another-bid-to-counteract-undesirable-organizations-russian-banks-will-be-required-to-verify-all-transfers-from-abroad","status":"publish","type":"post","link":"https:\/\/mediateka.online\/learnrussian\/monitoring-for-middlemen-in-another-bid-to-counteract-undesirable-organizations-russian-banks-will-be-required-to-verify-all-transfers-from-abroad.html","title":{"rendered":"Monitoring for middlemen In another bid to counteract \u2018undesirable organizations,\u2019 Russian banks will be required to verify all transfers from abroad"},"content":{"rendered":"<figure class=\"EmbedBlock-module_root__28k9U EmbedBlock-module_cc__1BQ5g EmbedBlock-module_default__LSDny EmbedBlock-module_desktop__SF5a_ EmbedBlock-module_proportional__3lAv4\">Andrey Gordeev \/ Vedomosti \/ TASS<\/figure>\n<p class=\"SimpleBlock-module_lead__35nXx\">On June 9, the Russian State Duma adopted a package of laws on countering \u201cthe infiltration of undesirable organizations into the Russian Federation\u201d in their third and final reading. One of the bills in particular aims to combat the use of intermediaries for obtaining funds for \u201cundesirable organizations.\u201d To achieve this goal, the authors of the bill chose the simplest possible method \u2014 tasking banks and other credit institutions with monitoring every single money transfer received by Russian citizens and organizations from an as of yet unspecified list of foreign countries. Meduza looks into how this new legislation threatens both banks and Russian citizens alike.<\/p>\n<h3 class=\"SimpleBlock-module_h3__2Kv7Y\"><strong>What does the bill say?<\/strong><\/h3>\n<p class=\"SimpleBlock-module_p__Q3azD\">Under Russia\u2019s current law on countering money laundering and terrorist financing, banks are required to check payments from foreign senders in the following cases:<\/p>\n<p>They amount to 100,000 rubles ($1,390) or more.They are for use by nonprofits.<\/p>\n<p class=\"SimpleBlock-module_p__Q3azD\">During the bill\u2019s second reading (which was approved on June 8 \u2014 five days after it was submitted to parliament) amendments were introduced to \u201cimprove\u201d these procedures. If the president signs the new law, then from October 1, 2021 onwards:<\/p>\n<p>All banks will have to carry out mandatory checks on transfers of any amount to any individuals or legal entities if they come from a sender in a country included in a specially compiled list (or from a bank registered in one of those countries).\u00a0\u00a0The list of countries will be compiled by the authorized governmental organization (Russia\u2019s state financial watchdog, Rosfinmonitoring). The list will not be made public; aside from officials, only banks will know its contents.\u00a0If the banks find out that an organization that received a transfer from abroad has acted as an intermediary for (read: sent money to) an \u201cundesirable organization,\u201d then this \u201cintermediary\u201d can also be declared an \u201cundesirable organization.\u201dIf, on the other hand, an individual is caught acting as an \u201cintermediary,\u201d then under the new law, an administrative case can be brought against them, and in the case of \u201crepeat offenses,\u201d a criminal case. The penalties stipulated range from fines to five years in prison. Furthermore, any financial transfer received by or intended for an undesirable organization can be considered participation in that organization, which itself carries charges.\u00a0Separately, banks will monitor all payments to the accounts of nonprofits made from outside Russia (except for state, municipal, and general education nonprofits, as well as homeowners\u2019 associations, industrial co-ops, and horticultural associations).<\/p>\n<p class=\"SimpleBlock-module_p__Q3azD\">At first glance, this bill doesn\u2019t threaten anything for citizens who receive transfers from outside Russia, so long as they don\u2019t interact with \u201cundesirable organizations.\u201d However, the procedures for \u201cmonitoring payments\u201d adopted in Russia mean that life could become more difficult for any citizen who\u2019s engaged in financial transactions with foreign organizations.\u00a0<\/p>\n<h3 class=\"SimpleBlock-module_h3__2Kv7Y\"><strong>How will the \u201cmonitoring\u201d work?<\/strong><\/h3>\n<p>Under the anti-money laundering law, banks are required to check all payments \u2014 not just those originating outside Russia \u2014 over 600,000 rubles (about $8,350) or over 100,000 rubles ($1,390) if it\u2019s from a postal money order.This check involves credit institutions verifying whether or not the payment is linked to economic activities, and whether or not there are documents justifying those activities. The credit institution also identifies the details of the sender and the recipient (if one of them is a legal entity rather than a person, they identify the ultimate beneficiary). In addition, where possible, the bank determines the provenance of the sender\u2019s money and ensures that the transaction (if applicable) doesn\u2019t contain any signs of money laundering.\u00a0If suspicious payments are identified, the credit institution must block them and report them to Rosfinmonitoring.Information on all payments is to be kept for five years; the credit institution is required to hand over this information upon any request from Rosfinmonitoring.<\/p>\n<p class=\"SimpleBlock-module_p__Q3azD\">There are separate rules for payments from foreign sources (in addition to the checks on transfers of more than 100,000 rubles from certain countries for use by nonprofits):<\/p>\n<p>Any transfers for (or to) countries that do not comply with the international recommendations of the Financial Action Task Force on Money Laundering (FATF) must be verified. Currently, only Iran and North Korea are on this list.\u00a0Any transactions conducted in Russia with cards issued in countries on yet another list are also subject to mandatory verification. This list of countries is not made public, but is sent to banks and other credit institutions through their individual accounts on Rosfinmonitoring\u2019s electronic system. This list may now include offshore jurisdictions.\u00a0<\/p>\n<p class=\"SimpleBlock-module_p__Q3azD\">As is clear from the bill that the State Duma adopted on June 9, the obligations for banks may broaden significantly, as they will now have to conduct checks (that is, ascertain all the details of the sender, receiver, and their business relationship) when carrying out minor transfers.\u00a0\u00a0<\/p>\n<h3 class=\"SimpleBlock-module_h3__2Kv7Y\"><strong>How does this threaten Russian citizens?<\/strong><\/h3>\n<p class=\"SimpleBlock-module_p__Q3azD\">The authorities put organizations on the \u201cundesirable\u201d list according to totally opaque criteria, so it\u2019s never clear when a person will unexpectedly be found to be a sponsor of one of these groups.<\/p>\n<p class=\"SimpleBlock-module_p__Q3azD\">Furthermore, we don\u2019t know whether or not lawmakers are thinking of using the data gathered by banks for purposes other than identifying the \u201cintermediaries\u201d helping \u201cundesirable organizations\u201d (remember that information on transfers must be kept for five years). There is also the possibility that laws countering foreign organizations\u2019 \u201cinfiltration into the Russian Federation\u201d\u00a0will be tightened further. For example, a person can find themselves on Russia\u2019s list of \u201cforeign agents\u201d just for receiving some foreign funding and writing something on social media.<\/p>\n<p class=\"SimpleBlock-module_p__Q3azD\">But even in its current form, the bill could cause a lot of inconvenience for Russian citizens. In all likelihood, banks will pass on a portion of the new additional costs to clients and increase their requirements for processing payments. And payments that are processed incorrectly (even small ones) will be blocked.\u00a0\u00a0<\/p>\n<h3 class=\"SimpleBlock-module_h3__2Kv7Y\"><strong>What do the banks think about this?<\/strong><\/h3>\n<p class=\"SimpleBlock-module_p__Q3azD\">Based on a review from the National Council on Financial Markets (an association of banks and other credit institutions set up for the purposes of interacting with the authorities), journalists from Kommersant reported that the banks think they won\u2019t be able to ensure monitoring for small transfers by the time the law is set to come into force (October 1, 2021). As such, the banks proposed not checking payments amounting to less than 600,000 rubles or even less than 100,000 rubles. Otherwise, according to the bankers, they will have to scrutinize even a refund from a foreign online store or content provider.\u00a0<\/p>\n<p class=\"SimpleBlock-module_p__Q3azD\">It\u2019s also unclear how the banks are supposed to monitor transfers from a foreign card to a Russian one (p2p transfers): these include minimal information about sender and recipient, which means banks will have to demand additional data from the transaction\u2019s participants or block the transfer.<\/p>\n<p class=\"SimpleBlock-module_p__Q3azD\">The burden on departments involved in oversight will increase many times over (Alfa-Bank thinks it will grow ten times over; Sber says 24 times). According to the bankers, these verifications can\u2019t be automated: the field in the SWIFT international system through which information on payments is reported has no clear structure and can be filled out in various ways. As such, the National Council on Financial Markets\u2019s review concluded that banks are prepared to organize monitoring, but only from mid-2022 onwards.<\/p>\n<h3 class=\"RelatedBlock-module_header__2SuWP\"><\/h3>\n<p>Russian lawmakers want to strengthen legislation against \u2018undesirable organizations.\u2019 Here\u2019s why the Supreme Court is pushing back.The most draconian law yet Everything you need to know about Russia&#x27;s new legislation against \u2018undesirable organizations\u2019<\/p>\n<h3 class=\"DonatesTeaser-module_title__hs-yr\">Tune in and help Meduza!<\/h3>\n<p>Pledge today<\/p>\n<p class=\"MaterialNote-module_note_caption__1ezSo\">Story by <strong>Dmitry Kuznets<\/strong><\/p>\n<p class=\"MaterialNote-module_note_credit__PuFyX\">Translation by <strong>Maya Chhabra<\/strong><\/p>\n<p><!--noindex--><a target=\"_blank\" rel=\"nofollow noopener\" href=\"http:\/\/meduza.io\/en\/feature\/2021\/06\/16\/monitoring-for-middlemen\">Source<\/a><!--\/noindex--><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Andrey Gordeev \/ Vedomosti \/ TASS On June 9, the Russian State Duma adopted a package of laws on countering \u201cthe infiltration of undesirable organizations into the Russian Federation\u201d in their third and final reading. One of the bills in particular aims to combat the use of intermediaries for obtaining funds for \u201cundesirable organizations.\u201d To [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[87],"tags":[],"class_list":["post-3251","post","type-post","status-publish","format-standard","hentry","category-latest-news-from-russia"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Monitoring for middlemen In another bid to counteract \u2018undesirable organizations,\u2019 Russian banks will be required to verify all transfers from abroad - Learn Russian<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/mediateka.online\/learnrussian\/monitoring-for-middlemen-in-another-bid-to-counteract-undesirable-organizations-russian-banks-will-be-required-to-verify-all-transfers-from-abroad.html\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Monitoring for middlemen In another bid to counteract \u2018undesirable organizations,\u2019 Russian banks will be required to verify all transfers from abroad - Learn Russian\" \/>\n<meta property=\"og:description\" content=\"Andrey Gordeev \/ Vedomosti \/ TASS On June 9, the Russian State Duma adopted a package of laws on countering \u201cthe infiltration of undesirable organizations into the Russian Federation\u201d in their third and final reading. One of the bills in particular aims to combat the use of intermediaries for obtaining funds for \u201cundesirable organizations.\u201d To [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"http:\/\/mediateka.online\/learnrussian\/monitoring-for-middlemen-in-another-bid-to-counteract-undesirable-organizations-russian-banks-will-be-required-to-verify-all-transfers-from-abroad.html\" \/>\n<meta property=\"og:site_name\" content=\"Learn Russian\" \/>\n<meta property=\"article:published_time\" content=\"2021-06-20T12:23:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/mediateka.online\/learnrussian\/wp-content\/uploads\/2021\/04\/background.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"400\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"http:\\\/\\\/mediateka.online\\\/learnrussian\\\/monitoring-for-middlemen-in-another-bid-to-counteract-undesirable-organizations-russian-banks-will-be-required-to-verify-all-transfers-from-abroad.html#article\",\"isPartOf\":{\"@id\":\"http:\\\/\\\/mediateka.online\\\/learnrussian\\\/monitoring-for-middlemen-in-another-bid-to-counteract-undesirable-organizations-russian-banks-will-be-required-to-verify-all-transfers-from-abroad.html\"},\"author\":{\"name\":\"admin\",\"@id\":\"http:\\\/\\\/mediateka.online\\\/learnrussian\\\/#\\\/schema\\\/person\\\/0d6f5f7bbb19440e07a465cadacf8014\"},\"headline\":\"Monitoring for middlemen In another bid to counteract \u2018undesirable organizations,\u2019 Russian banks will be required to verify all transfers from abroad\",\"datePublished\":\"2021-06-20T12:23:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"http:\\\/\\\/mediateka.online\\\/learnrussian\\\/monitoring-for-middlemen-in-another-bid-to-counteract-undesirable-organizations-russian-banks-will-be-required-to-verify-all-transfers-from-abroad.html\"},\"wordCount\":1274,\"commentCount\":0,\"articleSection\":[\"Latest News From Russia\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"http:\\\/\\\/mediateka.online\\\/learnrussian\\\/monitoring-for-middlemen-in-another-bid-to-counteract-undesirable-organizations-russian-banks-will-be-required-to-verify-all-transfers-from-abroad.html#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"http:\\\/\\\/mediateka.online\\\/learnrussian\\\/monitoring-for-middlemen-in-another-bid-to-counteract-undesirable-organizations-russian-banks-will-be-required-to-verify-all-transfers-from-abroad.html\",\"url\":\"http:\\\/\\\/mediateka.online\\\/learnrussian\\\/monitoring-for-middlemen-in-another-bid-to-counteract-undesirable-organizations-russian-banks-will-be-required-to-verify-all-transfers-from-abroad.html\",\"name\":\"Monitoring for middlemen In another bid to counteract \u2018undesirable organizations,\u2019 Russian banks will be required to verify all transfers from abroad - 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