Russian anti-money laundering legislation in electronic payments: A case of regulation catching up with business practices

Jul 19 2013

During its plenary session in June 2013 in Oslo, the Financial Action Task Force (FATF) approved the Guidance on Risk-Based Approach to Prepaid Cards, Mobile Payments and Internet-based Internet Payment Systems[1] which is aimed at assisting jurisdictions in devising necessary risk-based measures towards New Payment Methods (NPMs). FATF once again demonstrated consistency in calling countries for moving away from ‘one-size-fits-all’ approach (para 90). However, the jury is still out on what size exactly fits whom. Therefore, this article is aimed at filling the knowledge gap on national risk-based Anti-Money Laundering/Combating Terrorist Financing (AML/CFT) approaches towards NPMs. Such an exercise can be useful not only as a part of exchanging similar experiences among jurisdictions but also to find risk-mitigating approaches which are still disregarded by the national authorities but can be of great importance for achieving AML/CFT goals. In this article, we present the case of Russia, which is one of the most developed markets for new payment technologies with a very specific and elaborated legal framework for this sector. In the first part, we give a short overview of the Russian electronic payment market describing major products that are widely used in the country. Secondly, we discuss the specifics of the Russian regulation towards NPMs and the AML/CFT legal framework that has been developed for the financial sector. The next part is dedicated to the identification approaches and risk-mitigating measures that are now employed by the payment operators. We believe that with rather conservative legislation in place, companies employ effective risk-mitigating measures for their own business purposes (eg combating fraud) even though they are not considered a part of compliance policy by the authorities. Therefore, when devising new risk-based effective AML/CFT tools, legislators should be encouraged to look at existing business practices instead of following the less effective path of designing new requirements or carrying them over from other sectors or financial products.

Forgotten password?

if you have a subscription to, but have forgotten your password, please fill in the box below and your log-in details will be emailed to you.

Back to log in page

To read the rest of this article please log in below.

Request free access

You can request free access to Financial Regulation International. This includes your personal copy of the latest issue.Click here to request free access.

Subscribe now

Start benefiting from our expert analysis straight away. Click here to subscribe. A subscription provides the latest hardcopy sent to you ten times a year, access to our online archive, and full access to the site.

Log in

Keep me logged in

Have you forgotten your details?

Send To Colleague

Email the Editor