The Watcher

 

Russia’s outgoing president Dmitry Medvedev is creating another super-powerful task force to curb illegal financial transactions, corruption and money laundering. First Deputy Prime Minister Viktor Zubkov will form and lead an interdepartmental group comprised of representatives from law enforcement agencies, the Central Bank and the Federal Tax Service.

The new structure, judging by the official statement, will take under control all financial operations in the country. The task force, the statement says, is created to "improve detection and prevention of financial transactions (including those with ‘one-day firms’) aimed at legalization of proceeds from crime, terrorist financing, evasion of taxes and customs duties, receiving proceeds from corruption’.

Viktor Zubkov, the 70-year-old career bureaucrat, is an old friend and political ally of Vladimir Putin. He rose from running a collective farm in the Leningrad region to be the head of Russia's key anti-money laundering body and later, Prime Minister.

When in 1993 he took charge of the Saint-Petersburg tax office, many thought that the graduate of the Institute of Agriculture would be out of place. They were wrong. The yesterday’s farmer, nicknamed "Give Victor a Million”, was collecting taxes surprisingly well.

In 2000 FATF put Russia on blacklist. The Committee on Financial Monitoring which, according to FAFT, had to fight money laundering was created only in 2002. Yet, the agriculturist and taxman, stroke Russia off the list in less than a year.

Russia ranks 143 in Transparency International corruption index, on the same level as East Timor, Nigeria and Uganda. According to the Russian Union of Industrialists and Entrepreneurs every fifth businessman in Russia has been victim to extortion from officials.

The Financial Monitoring Service, RosFinMonitoring, has considerable authority already but clearly it is failing to crack down on corruption. Perhaps, Viktor Zubkov is needed to tighten grips on state companies, as the head of such company may have a greater political weight than the head of RosFinMonitoring.

Interestingly, in September 2007, Vladimir Putin, then preparing his leave from presidency, claimed fight against corruption his top priority and appointed Viktor Zubkov Prime Minister.

 

 

Russia’s outgoing president Dmitry Medvedev is creating another super-powerful task force to curb illegal financial transactions, corruption and money laundering.
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