Banks required to report actions of ‘undesirable organisations’

Rosfinmonitoring has introduced draft regulations on notification of the refusal of financial services to “undesirable organisations”


The draft regulations require banks and non-credit institutions to report to Rosfinmonitoring (the Federal Financial Monitoring Service) on foreign “undesirable organisations” which have attempted to transfer money to Russia, and potential recipients of such transfers.

The draft provides a list of financial institutions which will be obliged to refuse to cooperate with “undesirable organisations” and to report this fact, states RBC.  The list includes all participants in the financial market as defined by the Law on the Central Bank of the Russian Federation: banks, brokers, private pension funds, asset management and insurance companies, microfinance institutions, consumer credit unions and housing cooperatives, and pawnbrokers. In addition, specialised depositories, actuaries, credit history providers, rating agencies, exchanges, and organisations performing the function of central counterparty to carry out clearing activities must report contact with “undesirable organisations”. They are required to send information on refusals of financial services to “undesirable organisations” and a description of the nature of the transaction to Rosfinmonitoring by email within 24 hours.

“Under this legislation, Rosfinmonitoring will receive information from banks about remittances sent to NGOs from abroad and pass it to the Ministry of Justice each month”, states Darya Miloslavskaya, Chair of the Board of the non-profit partnership “Lawyers for Civil Society”. So the risk for NGOs of entering the foreign agents register due to the emergence of this new tool will only increase. At the same time, according to Miloslavskaya, participants in the financial market will not work with partners of “undesirable organisations”, reducing opportunities for Russian NGOs and expanding the grounds for restricting their activities and those of their directors, reports RBC.

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