Text 4: Legislation and Customs

Russia has yet to enact anti-money laundering legislation. Legislation has been drafted by an interagency committee created by the President and is undergoing expert review before being submitted to the State Duma, the lower house of Russia's Federal Assembly or Parliament. Although the directives of the Council of Europe and the recommendations of the Financial Action Task Force (FATF) have been taken into consideration, the proposed Russian anti-money laundering legislation was drafted in the context of the country's unique law enforcement and judicial systems. This anti-money laundering legislation will place Russia significantly in compliance with the anti-money laundering provisions of the 1988 Vienna Convention.

There are no currency transaction reporting requirements for banks or NBFIs, for businesses at the time of customer purchases, or for the importation of bulk currency by financial institutions. Upon entry into Russia, travelers passing through Russian customs are required to complete a customs declaration form. This form includes personal information about the traveler such as full name, citizenship, the country of origin and country of destination. The traveler must list all holdings in rouble denomination to include cash, government bonds, lottery tickets, and checks. All foreign currency, to include monetary instruments (bank notes, exchequer bills, coins, checks, bills, letters of credit, securities, shares, and bonds) must also be declared by type of foreign currency and amounts of each foreign currency. Additionally, a duplicate of the initial customs declaration form must be retained and surrendered to customs authorities upon leaving Russia, along with an exit declaration form requesting the same types of information as the entry declarations form. These declarations forms are retained by the Russian Customs Service and are available, upon request, to Russian law enforcement authorities.

Although there are no reporting requirements for money orders, exchanging currency, or for the export of currency, all such transactions are to be recorded and clients identified. Any amount of foreign currency exported from Russia must be declared; however, amounts over the equivalent of USD500 must be supported by a document proving its legal origin (i. e. bought at a currency exchange, previously imported into the country, or withdrawn from a foreign currency account).

The draft anti-money laundering law stipulates that a transaction report will be completed for all cash and non-cash transactions which exceed 200 times the minimum-wage for individuals and 10,000 times the minimum wage for businesses. A form must also be filled out if several transactions conducted by the same person or their agent totals the above-mentioned amounts over the period of a month. Financial institutions must also inform the tax authorities within 24 hours of any transaction of a suspicious nature. The onus for failure to file these transaction reports will lie with the managers of enterprises, institutions, and organizations. The penalties for breaches of anti-money laundering regulations range from substantial fines for administrative violations to criminal liability if the violation is connected to money laundering activities.

Under proposed law, the Russian Tax Inspectorate will serve as the central authority for receiving or collecting the currency transaction reports, and entering them into a searchable database.

1 Anti-money laundering legislation had not been enacted in Russia when this report was made. □

4 The legislation was undergoing expert review at the State Duma at that time. □

5 No directives of international bodies had been taken into account in drafting the legislation. □

6 The proposed legislation ignored the law enforcement and judicial systems of Russia. □

7The proposed legislation did not contradict the provisions of the 1988 Vienna Convention. □

1 Why were the foreigners coming to Russia to retain...............................................?

2 Was this duplicate to coordinate with.......................................................................?

3 Why did the Russian Customs Service keep............................................................?

e Write out all the provisions of the draft anti-money laundering law mentioned in the text, completing the sentences:

1 For all cash and non-cash transactions exceeding..........................................................................................

2 Of several transactions.....................................................................................................................................

3 In case of any transaction of a suspicious nature............................................................................................

4 If such transactions are not reported................................................................................................................

5 The penalties range from..................................................................................................................................

6 The Russian Tax Inspectorate is to serve as the central authority for..............................................................

предлагаемый закон (законопроект).................... the proposed legislation......................................................

ответственность за нарушение закона.............................................................................................................

ответственность за непредставление информации о такой сделке уголовная ответственность...............................................................................................................................................................................

ответственность будет возложена на...............................................................................................................

сомнительная сделка нарушение закона.........................................................................................................

1 The customs declaration covers personal information about the traveler, such as his full name..........................................................................................................................................................................

2 All the holdings in roubles are to be listed, including cash...........................................................................

3 All foreign currency holdings are to be listed including bank notes...............................................................

4 If the Russian traveler has got more than USD 500 he is to present a document proving the legal origin of the money, that is if he had bought............., if he had withdrawn............................................................................

j Say if and how the customs declaration requirements have changed, as far as you know.

Read the text quickly and find the sentence saying that money laundering is not a crime.

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