Bank deposits secrecy law may be canceled in Russia

Sunday, July 12, 2020

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The bank deposits secrecy law may be canceled in connection with the struggle against terrorism financing in Russia. "The databank of the Federal Financial Monitoring Service (FFMS) has over two and a half million reports of suspect financial transactions and 10,000 new ones come in every day; 80% of them are concerned with banks," said FFMS head Viktor Zubkov. The FFMS site also has a special column, "Lists of Extremists and Terrorists," which provides open access to the list of organizations and individuals connected with terrorist organizations or terrorists compiled by the UN Security Council Sanctions Committee. The site also has a "secret" FFMS list, which is regularly renewed and circulated by the Central Bank among banks in order to monitor suspect clients and their partner banks. However, some market players believe that disclosure of information about clients is a serious blow to the image of any bank. Consequently, they do not believe that the clients' accounts will be made completely transparent. "Rather, the idea is that information should be disclosed in certain situations. The only question is when, and on what terms," said Troika Dialog analyst Sergei Donskoi. "Few things will change dramatically for most ordinary depositors, apart from the fact that the tax agencies will know more about them. But on the whole, the disclosure of bank secrets can hinder the attraction of additional resources to the banking sector." Of course, there is the risk that control over banking operations will become too heavy-handed, as is often the case in Russia. This control could become one more stick given to law enforcers. "And it would be premature to speak about the work of banks in wartime conditions," concluded Donskoi. The FFMS is investigating about 1,000 suspect financial deals, about 20% of them in conjunction with the financial intelligence agencies of 50 countries and Interpol. The spotlight is on the flow of private Russian capital abroad, which topped $2 billion last year, said Viktor Zubkov.

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