The European Commission (EC) has formally declared Russia a “high-risk third country,” citing deep-rooted flaws in its anti-money laundering (AML) and counter-terrorist financing (CFT) systems. The decision follows a comprehensive technical review that drew on public records, reports from EU member-state authorities, and assessments by the European External Action Service (EEAS). According to the Commission, Russia’s financial regime falls short of meeting the standards required to protect the integrity of the EU’s financial markets.
Under the EU’s regulatory framework, this classification is not merely symbolic. It triggers stricter compliance and due diligence requirements for all financial and non-financial firms operating in the EU that engage with Russian individuals, companies or assets. That means banks, payment service providers, fintechs and other institutions will now need to conduct enhanced customer due diligence (CDD), gather detailed information about beneficial owners, monitor transactions involving Russian links more closely, and continuously reassess risk exposure.
The change stems from a broader 2025 review under the 4th Anti‑Money Laundering Directive (4AMLD), following a pledge by the Commission to re-evaluate countries whose membership in the Financial Action Task Force (FATF) is suspended. Since Russia falls into that category, the assessment concluded it meets the criteria for listing as a high-risk jurisdiction. The listing aims to safeguard the EU financial system against misuse — be it laundering illicit funds, financing terrorism, or facilitating war-related or criminal flows that might originate in or transit through Russia.
For businesses and clients with ties to Russia, this development significantly raises the bar. Institutions may require more rigorous verification procedures, impose additional documentation demands, and see more rejections or delays in transactions. For Russian-linked individuals and organizations, access to EU financial and trade systems will become considerably more challenging. The designation does not amount to an outright ban — but the enhanced vigilance and stricter risk standards reflect a deliberate tightening of financial checks.
The regulation still awaits a brief review period by the European Parliament and the Council of the European Union, which have up to one month (extendable by another) to raise objections. If they do not intervene, the listing will come into force, solidifying Russia’s status as a high-risk jurisdiction under EU law — until and unless it convincingly reforms its AML/CFT framework.
This move also underscores a larger strategy: by combining sanctions and financial-system defenses, the EU is working to choke off any channels that might enable illicit or war-related flows. With Russia now formally flagged for its strategic deficiencies, the pressure is on — not just in sanctions, but in the everyday workings of financial compliance.
