The Bank of Russia is responsible for supervising the banking sector in the area of AML/CFT. Supervisory activities include financial monitoring and monitoring of suspicious transactions that may be carried out by customers of financial institutions. After the monitoring, the Bank of Russia evaluates the activity of the credit institution in the field of AML/CFT and in case of detection of violations has the right to take measures provided for by the legislation in order to minimize the risk of money laundering.
The Bank of Russia provides a clear definition in the regulatory documents of what operations are subject to mandatory monitoring.
In order to combat money laundering and terrorist financing, the Bank of Russia has defined 82 indicators of suspicious transactions, which are qualitative criteria.
In order to prevent the involvement of credit institutions in high-risk suspicious transactions, which are most likely aimed at money laundering, banks are vested with the following powers.
The bank has the right to "refuse to open bank accounts for individuals or legal entities, if it has suspicions that they may be used for the purpose of laundering crime proceeds or financing of terrorism;
The bank shall have the right to "refuse to execute the client's order to carry out the operation, except for the operations of crediting funds received in the account of a natural person or a legal entity";
The bank shall have the right to "terminate the bank account (deposit) agreement with the client in the event of taking 2 or more decisions within a calendar year to refuse to execute its order to perform the operation".
The Bank, guided by the principle of "know your customer", may independently determine the level of risk of the customer based on the professional judgment of the responsible employees of the bank. In order to form the judgment of the bank's employees, the analysis of the client's operations shall be carried out taking into account the type of its activity and scale of operations. Motivated opinion of the bank's employees shall be correct and correct, but sometimes it does not correspond to the level of risks assumed by the bank. If there is no effective control on the part of the territorial offices of the Central Bank of the Russian Federation, then it is possible to have cash withdrawal sites or to use the region for the transit element in the scheme to withdraw them abroad.
The primary task of the Central Bank's subdivisions is to detect bank customers' frauds most quickly in order to prevent the appearance of high-risk incidents in the banking sector and to take measures.
A special group of specialists of the Central Bank of the Russian Federation is organized for the purpose of carrying out the audit of the bank, who are given the right to request from the employees and managers of the bank all the necessary documentation for the period under audit.
If as a result of the inspection violations of the legislation have been revealed, the regulator has the right to issue instructions to credit institutions in terms of elimination of violations and demand their execution, a fine may also be levied or a restriction on the bank's activities in the field of certain banking operations may be imposed for a period of up to 6 months.
The bank shall be entitled to apply the following measures:
1) Request from the bank: implementation of measures for its financial rehabilitation, replacement of officials, or limitation of compensation and (or) incentive payments to these persons for a period of up to three years; implementation of reorganization of the credit organization (to introduce a ban on it);
2) To introduce a ban on performance of certain banking operations by a credit organization, stipulated by the license issued to it for performance of banking operations, for the term of up to one year, as well as for opening of branches by it - for the term of up to one year;
3) Appoint a temporary administration of a credit organization for a period of up to six months;
4) Request from founders (participants) of a credit organization, which may influence the decisions of management bodies of the bank, take actions aimed at increasing the capital up to the amount that ensures compliance with the mandatory standards;
5) To introduce a limitation on the interest rate, which is determined by the credit organization in the bank deposit agreements.
If the bank repeatedly violates the requirements for mandatory financial monitoring and identification of the client during the year, the Bank of Russia has the right to revoke the license for banking operations.
The impact measure is commensurate with the size of the risk that arises due to deficiencies in the AML/CFT system or violation of the law in this segment. The Bank of Russia itself determines measures based on several criteria:
- Nature of the violation committed by the bank;
- Reasons for the violation;
- Financial condition of the bank.