Financial monitoring

The basis of financial monitoring in Russia is Federal Law No. 115-FZ on combating the legalization (laundering) of criminal proceeds and the financing of terrorism. Information is collected and analyzed by Rosfinmonitoring. Checks on the ground are carried out by banks and other organizations listed in the law.

What is checked

• Who the client is and who owns it. This is identification and verification of beneficial owners, known in international practice as KYC.
• Whether the transaction matches the client’s usual business.
• Whether there are signs of suspicious activity: an unusual amount, a transit nature, an unclear economic purpose, a questionable counterparty.
• Whether the transaction is one of those the law makes subject to mandatory control.

The bank may request documents on the deal and, in cases provided for by law, suspend or refuse the transaction. Information about suspicious transactions goes to Rosfinmonitoring. In addition, the Bank of Russia assesses companies’ risk level on its “Know Your Customer” platform, and banks take this assessment into account.

Where it comes up in international payments

A payment abroad is checked several times: by your bank, the agent’s bank, the correspondent banks and the beneficiary’s bank. Each has its own rules. Typical questions: why pay this beneficiary, does the amount match the contract, why is the beneficiary in a third country rather than in the supplier’s country.

What to watch for

Prepare the documents in advance: the contract, the invoice, the specification, and transport documents if the goods have already shipped. The payment purpose should clearly refer to the contract and the goods. If the beneficiary of the payment is not the seller under the contract, this must be explained with documents. Check the counterparty before the first payment.

In a deal through a broker, we collect the payment documents before the payment order so that the banks’ questions are answered in advance. If a bank or an agent has refused, we select another agent from the pool. More details: Complex payments.