Russian PM Confident About New Money Laundering Law

by Tatiana Smolensky, Tax-News.com, Moscow

16 July 2001

Russian Prime Minister Mikhail Kasyanov spoke last week about his expectations of the country's new anti-money laundering bill, which underwent its third and final reading on Friday. Inclusion on the revised Financial Action Task Force blacklist last month coupled with the threat of sanctions if sufficient anti-money laundering legislation was not put in place by September 30th stung the Russian authorities into action over the controversial bill, and despite some to-ing and fro-ing over the last few weeks, the process now seems to be almost complete. The next step will be for President Vladimir Putin to sign the bill into law.

'Having in mind the experience of other countries - European Union countries and also the experience of the United States - all aspects and positive experience have been taken into account,' Mr Kasyanov told Reuters. He added that he was hopeful that 'having this law and implementing this law will bring Russia off this [FATF] list.'

The bill, which will give the Russian authorities the power to examine the expenditure of large sums, oversee financial transactions over a certain threshold, and exchange information with overseas law and order agencies in suspected money laundering cases, has been descibed by the Finance Minister, Alexei Kudrun, as: 'the first serious step against dirty money'.

Asked to estimate how much capital flight from Russia amounted to last year, Mr Kasyanov speculated that between $9 and $10 billion had left the country secretly. He declined to speculate on how much of this was the result of criminal activity, but said that the government believed that the majority was linked to tax evasion, a problem which should decline with the introduction of a flat 13% personal income tax rate later this year.

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