The participation of the insurance sector in the laundering of criminal proceeds

The development of financial institutions inRussiaand the scaling-up of the use of financial instruments contribute to the emergence of an increasing number of schemes for laundering criminal proceeds. At the same time, the improvement of legislation and the introduction of strict control over the activities of financial institutions lead to the complication of such schemes, including an increase in the number of entities in the financial sector involved in the process of legalization. Now criminals are increasingly using non-credit financial organizations. Subjects of the insurance sector fall into the zone of critical risk of involvement in criminal schemes. At the end of2018, aplanned event will be held inRussiawithin the framework of the fourth round of inspections, which will be carried out by the Financial Action Task Force on Money Laundering (FATF). FATF will assess Russia not only in terms of the performance of the Central Bank of Russia and the Federal Service of Financial Monitoring, but also in the effectiveness of its functions and the interaction of all links in the national system of combating legalization: from financial institutions that provide information on suspicious transactions to judicial bodies that issue confiscation orders proceeds from crime.

The insurance sector inRussiais represented by its three main entities: insurance organizations, insurance brokers, and mutual insurance societies. A significant quantitative share of the market is occupied by insurance organizations, whose services are in turn an increasingly popular tool for legalization.

The article is researched the insurance sector in Russia, analyzed the main trends of the sector development, suggested a methodological basis for record the participation of the insurance sector in the money laundering, also identified the problems associated with process of implementation of internal control in the field of AML/CFT. The author also presents typical schemes for the laundering of proceeds from crimes related to insurance companies.

1. Senchagov V.K. Ekonomicheskaya bezopasnost Rossii. Obshchiy kurs [Economic security of Russia. General course]. Moscow: BINOM, 2012. 815 p. (In Russ.)

2. Federal Law No. 115-FZ of 07.08.2001 «On Counteracting the Legalization (laundering) of proceeds from crime and financing of terrorism». Available at: http://base.garant.ru/77666103 (accessed: 09.04.2018). (In Russ.)

3. Annual report of the Bank of Russia for 2016. Available at: http://www.cbr.ru/publ/God/ar_2016.pdf (accessed: 09.04.2018). (In Russ.)

4. Federal Law of 10.07.2002 No. 86-FZ «On the Central Bank of the Russian Federation (Bank of Russia)». Available at: http://www.consultant.ru/document/cons_doc_LAW_37570 (accessed: 09.04.2018). (In Russ.)

5. Regulation of the Central Bank No. 445-P on the requirements for the rules of internal control of noncredit financial organizations in order to counteract the legalization (laundering) of proceeds from crime and the financing of terrorism of December 15, 2014. Available at: https://minjust.consultant.ru/documents/13398 (accessed: 09.04.2018). (In Russ.)

6. Regulation of the Central Bank No. 444-P on the identification of clients, client representatives, beneficiaries, beneficiaries with the aim of counteracting the legalization (laundering) of proceeds from crime and financing of terrorism from 12.12.2014 by non-credit financial organizations. Available at: http://base.garant.ru/70852538 (accessed: 09.04.2018). (In Russ.)

7. Instruction of the Bank of Russia «On requirements for the training and education of personnel in noncredit financial organizations» of December 5, 2014 No. 3471-U. Available at: http://base.garant.ru/70867772 (accessed: 09.04.2018). (In Russ.)

8. Instructionofthe Bankof Russia«Ontheprocedure for submission by non-credit financial organizations to the authorized body of information provided for by the Federal Law on countering the legalization (laundering) of Criminally Obtained Incomes and the Financing of Terrorism» of December 15, 2014 No. 3484-U. Available at: http://base.garant.ru/70864848/ (accessed: 09.04.2018). (In Russ.)

9. Law of the Russian Federation No. 4015-1 of 27 November 1992 (as amended by 31.12.2017) «On the organization of insurance business in the Russian Federation» (change and addition of 28.01.2018). Available at: http://www.consultant.ru/document/cons_doc_LAW_1307 (accessed: 09.04.2018). (In Russ.)

10. The code of the Russian Federation on administrative offenses of December 30, 2001 No. 195-FZ. Rossiyskaya gazeta. Available at: http://www.consultant.ru/document/cons_doc_LAW_34661(accessed: 09.04.2018). (In Russ.)

11. Convention on the Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism. Eurasian group on combating the legalization of criminal proceeds and the financing of terrorism. Available at: http://eurasiangroup.org/ru/restricted/varshav_conv.pdf (accessed: 09.04.2018). (In Russ.)

12. FATF's focus on financial inclusion: protecting the integrity of the global financial system Available at: http://www.fatf-gafi.org/publications/fatfgeneral/documents/fatfsfocusonfinancialinclusionprotectingth eintegrityoftheglobalfinancialsystem.html (accessed: 09.04.2018).

13. FATF Guidance on the Risk-Based Approach for the Life Insurance Sector. Available at: http://www. fatf-gafi.org/publications/fatfrecommendations/documents/fatfguidanceontherisk-basedapproachforth elifeinsurancesector.html (accessed: 09.04.2018).

14. Order of the Federal Service for Financial Monitoring No. 361 «On the definition of the list of states (territories) that do not comply with the recommendations of the Financial Action Task Force on Money Laundering (FATF)». November 10, 2012. Available at: http://www.fedsfm.ru/documents/rfm/97 (accessed: 09.04.2018). (In Russ.)

15. Order of the Ministry of Finance of the Russian Federation No. 108n «On approval of the list of states and territories providing preferential tax treatment of taxation and (or) not providing disclosure and provision of information for financial transactions (offshore zones)». November 13, 2007. Available at: http://base.garant.ru/12157576/ (accessed: 09.04.2018). (In Russ.)

16. About FI. Finansinspektionen. Available at: https://www.fi.se/en/about-fi/ (accessed: 09.04.2018).

17. Federal Law No. 40-FZ of 25.04.2002 «On compulsory insurance of civil liability of vehicle owners». Available at: http://www.consultant.ru/document/cons_doc_LAW_36528/ (accessed: 09.04.2018). (In Russ.)

18. Information and analytical materials of the Bank of Russia review of key performance indicators of insurers. 2017. Available at: http://1000inf.ru/review.pd (accessed: 09.04.2018). (In Russ.)

19. Kabanova N.A., Bogdanova M.V., Gorshkov E.A., Komissarova D.A., Myasishcheva E.R., Potekhina V.V. Razvitie vzaimootnoshenij Banka Rossii s nekreditnymi finansovymi organizaciyami v oblasti POD/FT [Development of relations between the Bank of Russia and non-credit financial organizations in the field of AML/CFT]. Moscow: LLC «Nauchnyj konsul'tant», 2018. 174 p. (In Russ.)

20. Issuers of securities. The Dutch Authority for the Financial Markets. Available at: https://www.afm. nl/en/professionals/doelgroepen/effectenuitgevendeondernemingen (accessed: 09.04.2018).

21. Money Laundering and Terrorist Financing Typologies 2004–2005 Available at: http://www.fatf-gafi. org/publications/methodsandtrends/documents/moneylaunderingandterroristfinancingtypologies2004–2005. html (accessed: 09.04.2018).

22. Kashurnikov S.N., Prasolov V.I., Romanchenko L.N. Protivodejstvie legalizacii (otmyvaniyu) dohodov, poluchennyh prestupnym putem, i finansirovaniyu terrorizma [Counteraction to legalization (laundering) of proceeds from crime and financing of terrorism]. Moscow: INFRA-M, 2016. 234 p. (In Russ.)