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EU Blacklists Russia for Money Laundering Risks, Triggering Tougher Banking Checks
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The European Union is adding Russia to its blacklist of countries at high risk of money laundering and terrorist financing in a move that will tighten due diligence requirements for financial institutions across the bloc, according to Politico on December 3.
The decision, based on a draft seen by Politico and confirmed by two EU officials, will require banks and other financial firms to enhance checks on all transactions involving Russia and compel those that have not already done so to further mitigate their exposure.
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The step follows the earlier suspension of Russia from the global watchdog Financial Action Task Force after the full-scale invasion of Ukraine, but without a corresponding FATF blacklisting because of opposition from BRICS members Brazil, India, China, and South Africa.
EU lawmakers had repeatedly urged the European Commission to go beyond FATF’s stance, and the Commission had pledged to complete a review by the end of 2025 to secure backing for removing the United Arab Emirates and Gibraltar from the EU list earlier this year.
According to the draft, Russia’s inclusion will be added as an annex to the existing blacklist. Internal Commission documents cited by Politico said the assessment had been complicated by a lack of information-sharing with Moscow.
The EU already enforces extensive sanctions that severely restrict Russian firms’ access to EU financial services, and the blacklisting comes as the Commission seeks to overcome Belgium’s resistance to using revenue generated by Moscow’s frozen assets to finance support for Ukraine.
Earlier, it was reported that the European Parliament urged the European Commission to designate Russia as a high-risk country for money laundering and terrorist financing, emphasizing the need to go beyond the stance of the global watchdog FATF.
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