EU Adds Russia to High-Risk Money Laundering List Strengthening Financial Controls

The European Commission has placed Russia on the list of high-risk countries for money laundering and terrorist financing; the decision took effect on January 29.

Being added to the EU’s blacklist means significantly tighter controls on financial transactions involving Russian residents or related entities, with strengthened due diligence procedures and expanded scrutiny of all deals.

Under the new regime, the country will have to provide more documents on the origin of funds and beneficial owners, and contracts with Russian counterparties may require approval from AMLA’s special commissioners.

Among those already on the blacklist are North Korea, Iran, and Afghanistan.

Policy-makers note that FATF had temporarily suspended Russia’s membership in 2023 due to its full-scale invasion of Ukraine, but at that time Russia was not placed on any lists.

Opposition to Russia’s inclusion in the list came not only from India but also from other BRICS countries, notably Brazil, China, and the Republic of South Africa.

Russia’s inclusion in the EU’s blacklist had not occurred before in the history of relations between Russia and the European Union. The stringent sanctions imposed after the start of the full-scale war did not completely sever economic ties, particularly in the oil and gas sector.

Also, some Russian banks or their subsidiary branches in Europe – for example, Raiffeisen Bank, Gazprombank, and Rosselkhozbank – continued to be able to operate within the European financial system through euro-denominated correspondent accounts.

Earlier, the European Parliament removed the United Arab Emirates and Gibraltar from the list of high-risk countries for money laundering.

Context and implications for the EU
This decision underscores tighter scrutiny of financial dealings with Russia and imposes stricter requirements for the transparency of funds’ origins and beneficial owners.

Deals with Russia may require additional approval from AMLA, increasing legal risks and potentially affecting the speed of financial transactions and business processes.

This step by the EU is highly significant as a signal of accountability in financial transparency and in the global fight against money laundering.