International and European law
International and European law — Compliance
The new FATF and EU measures against Russia (Ukraine) / February 2023
I. FATF measures
On 24 February 2023, the Plenary (decision-making body) of the Financial Action Task Force (FATF) suspended the membership of the Russian Federation.
This decision was based on the "arms trade relationships between the Russian Federation and UN-sanctioned jurisdictions, and malicious cyber activities emanating from Russia", actions that "run counter to the FATF's core principles of promoting the safety, security and integrity of the global financial system" with the "gross violation of the commitment to international cooperation and mutual respect" in implementing and supporting the FATF standards.
Russia remains an active member of the Eurasian Anti-Money Laundering Group (EAG) and retains its rights as such. EAG is a FATF-style regional body and an associate member of the FATF (like MONEYVAL (like MONEYVAL for Monaco), which comprises in addition to Russia, Belarus, China, Kazakhstan, Kyrgyzstan, India, Tajikistan, Turkmenistan and Uzbekistan.
At each plenary meeting, the FATF will reassess the situation with a view to amending or lifting these restrictions. Three plenary meetings are held each year by the FATF, usually in October, February and June.
The FATF also reiterated its call for vigilance against current and emerging risks from the circumvention of measures taken against Russia to protect the international financial system.
Read the FATF Statement on the Russian Federation (Paris, 24 February 2023)
II. EU measures
On 25 February 2023, the European Union adopted its 10th package of sanctions against Russia, including measures of freezing funds and economic resources on the one hand, and measures of economic restrictions on the other, applicable in Monaco.
Related sanctions, but not to be confused:
1. Freezing of funds and economic resources measures
Council Implementing Regulation (EU) 2023/429 of 25 February 2023 implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, updates the list of natural and legal persons, entities and bodies whose funds and economic resources must be frozen.
This new list of 121 persons is included in the Annex to Décision Ministérielle n° 2023-17 du 27 février 2023 (pursuant to Ordonnance Souveraine n° 8.664 du 26 mai 2021 amended).
It includes Russian politicians, members of the Russian army, Russian media personalities, the Russian National Sovereign Wealth Fund, the Russian National Reinsurance Company, Russian banks, non-recognised government entities, companies in the sectors of defence, strategic infrastructure, military technology and equipment, arms and vehicles, etc.
The vigilance of the professional is based on the screening of the clients and counterparties in accordance with the national freeze list.
2. Economic restriction measures
Council Regulation (EU) 2023/427 of 25 February 2023 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine, laying down new economic restriction measures, is directly applicable to Monaco.
The new economic restriction measures include: trade restrictions on imports (goods that generate significant revenue for Russia, such as asphalt and synthetic rubber) and exports (critical technologies and industrial goods, goods from the construction sector that may be destined for the Russian military, goods that could contribute to the technological improvement of the Russian defence and security sector, etc.) with the extension of the list of goods that could be exported from Russia. ) with the extension of the list of entities directly supporting Russia's military and industrial complex (96 additional entities including seven Iranian ones); restrictions related to the aviation sector (new obligation for aircraft operators to notify non-scheduled flights between Russia and the EU, directly or via a third country, to their competent national authorities prior to its execution and at least 48 hours in advance) and the energy sector (ban on the provision of gas storage capacity to Russian nationals); restrictions on the broadcasting of Russian media (suspension of broadcasting licenses and ban on broadcasting of their content), etc.
Unlike freezing of funds and economic resources measures, economic restriction measures (commercial, sectoral, financial bans, etc.) are exceptionally aimed at specific persons or entities. The vigilance of the professional is therefore not only based on the screening of the clients and counterparties, but also on the service/goods provided and the geographical connection in order to comply with Regulation (EU) No 833/2014.
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