Check on engagement in terrorism

Entrepreneurs providing legal or accounting services are obliged by the Federal Financial Monitoring Service (Rosfinmonitoring) to check their clients on participation in shady financial transactions and terrorism.

Clarifications are given in the Information letter of the Rosfinmonitoring №54 from July 19, 2018.

According to the Federal law «On Combating Legalization (Laundering) of Proceeds from Crime and Financing of Terrorism» from August 7, 2001 №115-FL, in case of any suspicions on legalization of clients` income, it is necessary to identify them and inform the Rosfinmonitoring.

These requirements, in accordance with the Article 7.1 of the115-FL concern attorneys, notary officers and other legal persons, in case when they on behalf of their clients:

• make real estate transactions;
• operate monetary funds, securities or property, banking or security accounts;
• attract monetary funds of organizations for their foundation, operation or management;
• found organizations, carry out activities or manage them;
• make transactions of purchase and sale of organizations.

Clause 2 of the Article 7.1 of the115-FL explicitly refers to the obligation of persons providing legal and accounting services to inform the Rosfinmonitoring if they have any reason to suppose that their clients` transactions or financial operations are or may be carried out for legalization of income, received by criminal means or financing of terrorism.

Procedure for transmission of such data to the Rosfinmonitoring is defined by the Decision of the Government of the RF №82 from February 16, 2005.

Form of data representation, coding form, code list able for use, other peculiarities of data representation, information and telecommunication networks used for data transmission in electronic format are regulated by the Directive approved by the Order of the Rosfinmonitoring №10 from April 22, 2015.

According to the clause 2.8 of the Directive, representation of formalized electronic messages, containing transmitted data, is carried out only with the use of personal account on the official web-site of the Rosfinmonitoring.

Foregoing requirements are also applicable to registrars – to the full extent, and court-appointed managers – in cases when they provide other additional types of professional activities listed in the Federal Law №115.

Legal entities and individual entrepreneurs, providing legal and accounting services, are obliged to have internal check rules and a special executive, responsible for compliance with the rules. Competence requirements, training and teaching requirements for such executives are approved by the Decision of the Government №492 of the RF from May 29, 2014.

According to the data from the Federal State Statistics Service for the first half-year period of 2018, the Federal Financial Monitoring Service made 223 investigations regarding legal entities and individual entrepreneurs. In 2012 – 2015 almost every investigation ended with initiation of cases concerning administrative offences and (or) imposition of administrative fines. Over the last years, amount of revealed major violations is decreasing. (Picture 1).

Picture 1. . Investigations of the Rosfinmonitoring concerning legal entities and individual entrepreneurs in 2012 – 2018 (items)

Link to «List of organizations and individuals known for their engagement in extremist activities or terrorism» can be found in the section «Useful links» of the Information and Analytical system Globas.