OREANDA-NEWS. March 27, 2012. Transcript of the beginning of the meeting: Vladimir Putin: Colleagues, the interdepartmental group on countering illegal financial transactions and corruption has been working for over a month. I would like to know how its efforts started and how they are organised. This is the first issue we will discuss today.

The second issue concerns the need to improve legislation in this sphere. I would like you to share your proposals on this account. Who will be the first to speak?

Viktor Zubkov: Although it was set up only recently, I have held four meetings of the group. It should be said that due to the high professionalism of its members, the operation of the group has been organised very efficiently. As I have said, we have met four times and now have an action plan. We have been charged with improving the coordination of all law enforcement agencies’ work, and we have achieved this goal. The law enforcement agencies point out that it has become easier to work because we hold restricted meetings attended only by representatives of law enforcement agencies and discuss practical issues related to the financial transactions which we consider illegal…

Vladimir Putin: …which have elements of illegal activity.

Viktor Zubkov: Yes, transactions which have elements of illegal activity. In the past few weeks alone we have held inspections at five large banks, and we found a large number of documents at one of them showing that the bank was involved in illegal operations. We found over 500 stamps of various companies (mostly fly-by-night ones), about 10 seals of tax inspection agencies and a Moscow court and many other documents, which led us to conclude that these organisations were involved in illegal operations. Criminal cases have been opened and a number of individuals have been detained. We are now working actively to establish accomplices in these actions.

In the past few days we have investigated 30 large companies and have found a large number of documents confirming their involvement in illegal activities.

This work is based on agreements signed at our request, especially with the Interior Ministry, the Federal Tax Service and the Investigative Committee. This work will be continued and we believe that these financial and lending establishments will no longer have the ability to transfer funds abroad and to cash large sums of money.

Another task of the group as a whole is to improve legislation. This is a big project and we have done a lot, but I think that Mr Chikhanchin can speak about this in greater detail.

Vladimir Putin: Regarding your achievements, I hope that all these cases will be brought to their legal conclusion jointly with law enforcement agencies and courts.

Viktor Zubkov: We will monitor and control this work.

Vladimir Putin: Good. Mr Chikhanchin?

Yuri Chikhanchin: First, I would like to thank you for appointing Mr Zubkov to head this group. As a member of this working group, I can tell you that we have achieved certain results, including those mentioned by Mr Zubkov and those that concern legislation. We have recruited experts who are working to stop money laundering and illegal financial transactions, and have drafted a package of documents.

We plan to present the first package on March 30. It comprises several blocks of laws all of which bear on our basic Law 115 on countering money laundering and illegal incomes. Acting in accordance with international standards, we give banks an opportunity to suspend transactions or to refuse to conduct transactions which they consider suspect.

Seeking to prevent abuses and complications in the banks’ work with clients, we have drafted a provision on suspending transactions for up to 30 days in order to clarify their essence jointly with law enforcement agencies.

Another important proposal we plan to make in accordance with the right to legislative initiative concerns changing or correctly defining the status of a beneficiary owner. You highlighted that issue and instructed us to do this when we were working with state companies and state corporations. We plan to do this today in accordance with FATF recommendations.

In addition, we are considering amendments to the Criminal Code jointly with the Federal Taxation Service (at their request) and law enforcement agencies, primarily amendments related to possible criminal responsibility of legal entities so that tax agencies would be able to suspend the operation of a legal entity for the duration of the criminal investigation, for example when we cannot find the real owner of the said company. We are also considering amending Article 174, which concerns the threshold amount in money laundering cases. This is an international requirement. The current threshold is 6 million roubles. The criminal responsibility should not be too strict. It could be a fine, but the threshold must be changed.

We are also changing the law on banks and banking. One of the planned amendments concerns giving law enforcement agencies the opportunity to ask the court to suspend the operation of Article 26 on bank secrecy in order to request information about account activity during investigation.

We are also considering several amendments to the Tax Code to prevent fly-by-night firms from operating on the financial market. This is a large block of documents on which we are working. We are working closely with the Federal Migration Service to compile a register of lost passports. It will be a separate law. We will report to Mr Zubkov’s group by March 30 and then proceed in accordance with the established procedure. This is all I have to report on the planned laws.

The first package of new laws will be presented on March 30 and then we will continue working with due regard to amendments.

Vladimir Putin: When will you submit them to the government?

Yuri Chikhanchin: We are to report to Mr Zubkov on March 30; we should coordinate the drafts with the departments concerned by that time.

Vladimir Putin: So it will be in April.

Yuri Chikhanchin: I think that we will submit them to the government in early April.

Viktor Zubkov: You will submit the draft laws to the government and we will approve them at the commission on legislation.

Vladimir Putin: Good, agreed then.