Every country has its own designated FIU, such as FinCEN in the US and AUSTRAC in Australia, responsible for monitoring illicit financial activities. Similarly, the Federal Financial Monitoring Service (FSFM) is Russia’s Financial Intelligence Unit (FIU). Russia’s FIU operates in a highly centralized manner, reflecting the state’s unified economic management and internal security style.

What is FSFM?

The Federal Financial Monitoring Service (FSFM), also known as Rosfinmonitoring, is Russia’s principal financial intelligence unit (FIU). It is directly supervised by the President of the Russian Federation.

FSFM (Rosfinmonitoring) is not a typical standard regulatory agency but is substantially integrated into Russia’s national security and financial enforcement apparatus.

Its role includes the enforcement of anti-money laundering (AML) and counter-terrorist financing (CFT) regimes, and the regulation of activities concerning the financing of weapons proliferation.

What are the Responsibilities of FSFM?

It performs critical surveillance and support roles that shape Russia’s financial integrity, such as:

• Financial Information Gathering and Risk Assessment:

It receives regular reports of transactions from responsible sources, such as banks, real estate agents, and virtual currency exchanges, and uses sophisticated analytics to detect anomalies.

• Detection of Illicit Patterns:

The service separates activities linked to organized crime, terrorist networks, and money laundering operations on the basis of red flag indicators.

• Cross-Agency Coordination:

Rosfinmonitoring works with state government agencies, such as the Federal Security Service (FSB), the Ministry of Internal Affairs, and the Prosecutor General’s Office, in order to exchange information and provide support to investigations.

• Regulatory Advice and Typologies:

FSFM releases compliance guidelines, risk indicators, and industry-specific notices to assist institutions in identifying and reporting suspicious activity.

• Terror Watchlist Management:

It maintains the official list of individuals and entities with terrorism financing links and requires financial institutions to freeze or examine such accounts.

• Oversight and Regulation:

Regulated institutions are subject to on-site examination, audit, and, if necessary, administrative sanctions or criminal referrals.

• Regional and Bilateral Cooperation:

Despite having its membership in international organizations like the Egmont Group suspended, the FSFM is regionally a member of the Eurasian Group on Combating Money Laundering.

Which institutions does FSFM regulate?

FSFM monitors a broad range of sectors considered to be susceptible to financial crime:

• Financial Institutions:

They include banks, microfinance institutions, insurance institutions, credit unions, leasing companies, investment companies, and payment systems.

• Designated Non-Financial Businesses and Professions (DNFBPs):

This category includes legal professionals, accountants, real estate agents, casino managers, as well as precious metal dealers.

• Emerging Sector Organizations

Digital asset service providers, crowdfunding platforms, and certain state-associated enterprises are within the regulatory oversight of FSFM as well.

All these industries must comply with Russia’s AML/CFT laws and fulfill periodic reporting, customer due diligence, and training requirements.

What are the Legal Frameworks Empowering FSFM?

The mission and scope of the FSFM are defined by several top-level legal documents:

• Federal Law No. 115-FZ (2001): This primary law sets out the AML/CFT requirements of institutions and confers its supervisory and enforcement powers on FSFM.

• Presidential Decree No. 808 (2012): Outlines FSFM’s organizational model, lines of reporting, and scope of supervision.

• Presidential Decree No. 636 (2012): Improves FSFM’s coordination with executive policy and brings it into Russia’s national security apparatus.

• National AML/CFT Development Concept: A long-term strategic document that establishes national priorities, including virtual assets management and stricter sanctions enforcement.

What Are the Key AML/CFT Compliance Obligations Under FSFM Supervision?

Organizations supervised by Russia’s FSFM are required to maintain a strong AML/CFT  framework. These Russian AML obligations include:

• Internal policies for detecting, evaluating, and reporting suspicious transactions.
• Continuous customer due diligence (CDD), particularly for high-risk clients and politically exposed persons (PEPs).
• Appointment of a dedicated AML officer to oversee Rosfinmonitoring compliance requirements.
• Timely filing of Suspicious Activity Reports (SARs) with the FSFM.
• Secure maintenance of transaction records, customer identification data, and communication logs.
• Ongoing employee training to stay current with evolving AML/CFT threats.

Non-compliance with these FSFM regulations may lead to monetary penalties, criminal liability, or the suspension of a company’s operating license.

Is FSFM Still Active Following FATF and Egmont Suspension?

Yes. Rosfinmonitoring continues to operate as Russia’s primary AML regulator. Although its membership in the Egmont Group and the FATF was suspended in 2023 due to geopolitical tensions, FSFM has not suspended its domestic activities.

The regulator has even intensified oversight in areas such as cross-border transactions and crypto services. Its collaboration with national law enforcement and intelligence authorities remains intact.

Furthermore, the Eurasian Group (EAG), which includes nations such as Kazakhstan, China, and Kyrgyzstan, continues to recognize FSFM as a leading regional authority.