Russia is preparing a diplomatic offensive with countries it considers sympathetic, including China and Saudi Arabia, to fend off a push by Ukraine and its allies to further isolate Moscow from the global financial system.
Documents seen by Bloomberg and accounts by officials in NATO countries familiar with Moscow’s planning give an inside look at how Russia’s diplomatic machinery operates and the way the Kremlin views relations with some of its closest partners.
Detailed plans coordinated by the Kremlin’s financial-intelligence agency set out Moscow’s strategy, including nations to target and tactics and objectives at dozens of planned meetings ahead of an October gathering of the Financial Action Task Force (FATF), the global financial watchdog. Russia expects that Ukraine and its allies will seek renewed penalties there.
Russia was suspended from the FATF after invading Ukraine in February 2022 but has so far avoided being put on the body’s “blacklist” and other penalties. Moscow has pressured some of its friends and allies, including India, urging them to block such attempts ahead of the last FATF plenary meeting, held in June of this year. Under FATF rules, even a few of the group’s members can be enough to stop decisions.
Rosfinmonitoring, the Russian agency, didn’t immediately respond to a request for comment. It previously told Bloomberg that the “geopolitical situation” is outside its competence and that Russia complies with its FATF obligations.
‘Gray List’
The Paris-based FATF is an inter-governmental organization that sets standards for combating dirty money. Designation on the blacklist alongside the likes of North Korea and Iran obliges FATF member states as well as banks, investment houses and payment-processing companies to conduct enhanced due diligence and in the most serious cases take counter-measures to protect the international financial system.
Some 25 other countries are on the “gray list,” including Turkey, South Africa and the United Arab Emirates. A report by the International Monetary Fund in 2021 found that this penalty, which involves closer monitoring requirements, results in a “large and statistically significant reduction in capital inflows.”
Russia argues that its suspension is a political decision that goes beyond the mandate of the body, while Ukraine’s Finance Ministry has put together a case detailing alleged Russian violations of FATF standards.
In addition to seeking to block future designation attempts, Russia is now looking to some of its partners to help get its membership at the anti-money laundering organization reinstated, the documents show.
The Russian government identifies China and Saudi Arabia as top priority nations that it believes can not only help block renewed sanctioning attempts but may also lobby others on Moscow’s behalf.
Both Beijing and Riyadh have adopted mostly neutral stances on the war, with both also looking to play the role of potential brokers.
Read More: How Sanctions Have Stressed Russia’s Economy, Ruble: QuickTake
Over multiple bilateral meetings between diplomats and officials from Russia and the two countries at various levels, Moscow plans to set out the extent of their cooperation and mutually beneficial financial interests as it seeks their public support to regain its FATF membership.
Moscow is also seeking to organize a video call with the FATF chair next month, before the watchdog’s plenary meets.
Other Russian priorities include continued engagement with India as well as South Africa. Moscow appears to view the latter also as a channel to gather information about other governments’ FATF positions, the documents suggest.
Moscow will ramp up its communications and interactions with the BRICS countries, which in addition to China, India and South Africa include Brazil, in the lead-up to the October meeting as it hopes that the bloc will support the Kremlin’s view in any vote relevant to Russia’s interests.
Meanwhile, to win over FATF members in the Middle East and North Africa, Moscow is planning to meet Gulf nations later this month and offer greater collaboration on an anti-terror initiative and a new block-chain related project.
Elsewhere, other governments that Moscow is focusing its diplomatic network on include Turkey, Argentina, Malaysia and Mexico.
(Updates with details of FATF decisionmakingn from fourth paragraph)