OREANDA-NEWS. November 16, 2010. During the meeting Mr Chikhanchin told the prime minister of cooperation between Rosfinmonitoring and international monitoring agencies to prevent capital laundering. The head of government was also informed of the latest financial probes in key economic sectors. About 2,000 cases have been opened based on Rosfinmonitoring data.

The transcript of the beginning of the meeting:

Vladimir Putin: Mr Chikhanchin, what is the status of your cooperation with other international bodies, and how are things going in the key economic sectors which you are monitoring?

Yury Chikhanchin: We had a recent meeting with the Financial Action Task Force (FATF, the international body battling money laundering). Russia’s position there is confident. As black lists are drawn up, new requirements appear. What other areas in the law require change? More than anything else is the request to toughen standards used in monitoring high-profile individuals and state officials. We have our work cutout for us to make these amendments.

Second. Tax crime, under our law, will require reconsideration. The tax laws also call for examination. And then there is the issue of the ultimate beneficiary. This is one way of combating front-companies. We are examining such materials together with the appropriate ministries and government departments. And finally, we must consider the so-called high-risk approach. This would identify the most vulnerable and the weakest points open to criminal penetration.

We are also continuing to cooperate with the Eurasian group and continue to support our counterparts in Central Asia in developing anti-laundering systems. Most of those countries have anti-laundering bodies except Tajikistan. According to our information, Tajikistan is a black list candidate. We are actively involved in this issue and will review it at the next full meeting.

Thank you very much for promoting the Eurasian Group internationally. This will reinforce our positions and efforts among the Central Asian countries, and above all at the FATF. Its decisions will carry more substantiation.

We also had a conference with the Council of Europe on new laundering challenges. The matter of e-money was raised. This is a serious problem today. The FATF is particularly concerned with it because recently a group of Russian-speaking hackers was detained in the United States, including 11 Russians. This is a new type of crime. Here we are working hand in hand with the USA. We are also examining the question of Russian financial institution involvement.

Now concerning our main job. As you instructed, we are now taking a more focused approach – concentrating on particular problems and sectors. And the first parameter is, of course, budget money. Of all the financial probes we conducted this year – about 20,000 – about half were aimed at monitoring budget finance. About 18,000 cases were passed on to law enforcement agencies, 4,000 can be prosecuted criminally, and 2,000 cases have been opened on our initiative.

The second package of issues which has our attention concerns healthcare. These are cases followed by the Prosecutor General’s Office, the Interior Ministry and other law enforcement agencies. There are also systemic issues. We are now working with law enforcement bodies on the situation at Moscow City Hall. We have had a meeting with the mayor, discussed certain matters with him and brought some aspects to light. I can show them to you (showing a diagram). These are really systemic problems. Notice the healthcare departments and hospitals. They conclude contracts with intermediaries, and the money goes from the brokers directly to the Moscow health department. These kickbacks are lost money. Badly organised tenders make this possible … The amount involved is about 1.2 billion roubles.

Another area we regularly monitor is state budget financed purchases. We work jointly with the President’s control directorate and are focusing on housing and utilities. There are several cooperative criminal cases already opened across the country. They involve Murmansk, Moscow, St. Petersburg, Krasnoyarsk and Petropavlovsk-Kamchatsky, cities with housing and utility problems.

We are also working in the defence sector, and the timber and agro-industrial sectors. Now that Rosselkhozbank management has been replaced, we are taking an in-depth look not only at the bank but also at the agro-industrial complex in general. Some problems leaped out at us. Now, along with the Ministry of Agriculture, we are looking into subsidies and compensation payments when credit is issued or compensation granted. Some serious results have been reported. Here is one of our findings (shows a document). A criminal case has been opened against Rosselkhozbank, and the head of a branch of the Krasnodar territorial bank has been arrested. The sum involved amounts to something like six billion roubles. It was issued as credit. In effect, it was stolen.

We are also continuing to work with the energy sector. There is a case where one of the regions, by raising tariffs, obtained an illegal eight billion roubles. This money was channeled to private individuals rather than to upgrade the power grid. There are other materials, which I can show you later.

Vladimir Putin: Good. How many cases have been opened on the basis of your results?

Yury Chikhanchin: About 2,000 this year.