Duma Delays Crucial Money Laundering Bill

by Tatiana Smolensky, Tax-News.com, Moscow

29 June 2001

The Russian parliament announced on Tuesday that it would be delaying discussion of the controversial money laundering bill currently in progress until July 4th. Following the release of the FATF blacklist which suggested that the country could face sanctions if it fails to make sufficient reforms by September 30th, the Duma announced that most of the disagreements regarding the draft law had been ironed out, and seemed keen to get the legislation into place as soon as possible. This determination seems very quickly to have fallen by the wayside, despite the fact that any delay will increase the risk of missing the September deadline.

It is the head of the State Duma Commission on combating corruption, Nikolay Kovalev, that is holding up the process, as he feels that the draft is still too raw, and needs several important amendments. Speaking on Russian television on Wednesday, he explained his reasons in more detail: 'This law needs to be a direct-action law, where absolutely everything, from A to Z, is spelled out in every detail,' he said, 'Otherwise, some of its provisions render themselves to double or even triple interpretation. For example, what comes under the definition of a transaction causing suspicion? In whom does it arouse suspicion? Which cases need to be reported and which not? And so on.'

Although on a general level, the Duma does recognise the urgent nature of these reforms, not just in order to avoid sanctions, but to increase Russia's standing as an international investment partner, the main stumbling block so far has been the definition of illegal income, as everyone with an income of over R50,000 potentially falls under the provisions of the draft law.

Recommended