On issuance of methodological recommendations by the Bank of Russia

In elaboration of the approaches established by the Bank of Russia methodological recommendations No. 18-MR, dated 21 July 2017, with regard to the identification and suppression by credit institutions of the activity of their clients that involves dubious transactions, on 16 February 2018 the Bank of Russia published methodological recommendations No. 5-MR ‘On approaches to the management of the risk of legalisation (laundering) of criminally obtained incomes and financing of terrorism by credit institutions’.

Methodological recommendations No. 5-MR have been published to assist credit institutions in their assessment of clients’ operations in search of signs indicating that the settlements are performed to avoid the payment of VAT to the budgetary system of the Russian Federation or to decrease the amount of such payments intentionally.

Methodological recommendations No. 5-MR also contain a list of characteristic areas of clients’ activity and industry sectors where settlement schemes intended to avoid VAT payment (or obtain a refund) illegally are often used and provide recommendations for working with clients in case of any suspicions that they perform illegal operations related to VAT payments.

Methodological recommendations No. 5-MR have been developed by the Bank of Russia in cooperation with the FTS of Russia taking into account the results of the regulatory activity of the Bank of Russia, law enforcement practices, supervisory and oversight activity of the FTS of Russia, and have been agreed with the FTS of Russia.

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