EU Designates Russia as High-Risk for Money Laundering, Mandating Stricter Checks

The European Union has formally added Russia to its list of high-risk third countries with strategic deficiencies in combating money laundering and terrorist financing. The designation, published in the EU's official journal, triggers mandatory enhanced due diligence measures for all EU financial institutions. EU Economy Commissioner Paolo Gentiloni stated the move is "a key step to ensure EU financial and non-financial operators apply stricter checks when dealing with Russian entities." These obligated entities include banks, asset managers, and professionals like lawyers and accountants. The listing means EU operators must conduct stricter customer checks, known as Enhanced Due Diligence (EDD), on all business relationships and transactions involving Russia. This involves verifying more information about customers and the source of their funds, and conducting increased monitoring of transactions. The EU cited Russia's "strategic deficiencies" in its anti-money laundering and counter-terrorist financing framework. The bloc also highlighted the heightened risks arising from Russia's invasion of Ukraine and the circumvention of sanctions. The decision aligns Russia with other listed jurisdictions such as Iran, North Korea, and Myanmar.