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Strategies & Market Trends : Investment in Russia and Eastern Europe

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To: Z Analyzer who wrote (1114)	11/5/2001 11:49:10 PM
From: CIMA	of 1301

Moscow Gets New Tool for Money Monitoring November 5, 2001 Summary Russian President Vladimir Putin has created a financial intelligence agency to combat money laundering. The agency will help clean up Russia's often questionable financial sector, solidify Moscow's growing cooperation with the United States and Europe and empower the Kremlin to repatriate much of the money oligarchs have squirreled away abroad. Analysis Russian President Vladimir Putin on Oct. 31 created a financial intelligence agency, dubbed the Financial Monitoring Committee, to fight money laundering. The office will be responsible for investigating financial crimes -- making it an ideal tool for use against terrorists and oligarchs. As a result, the new agency could do much to improve Putin's standing both at home and in the West. Perhaps most important, the FMC could get Russia removed from the Organization for Economic Cooperation and Development's black list of money-laundering states. Although the FMC will not turn Russia into an investor's dream, it should help prune much of the uncertainty and corruption that hinders economic activity. The agency, to be led by Deputy Finance Minister Viktor Zubkov, is under the authority of the powerful Finance Ministry. Four hundred auditors will begin work Feb. 1, the same day a new package of laws combating dirty financial practices takes effect. The FMC is a coup for Putin's efforts to ingratiate himself with the West. During the past decade, Russia has been known as one of the world's most notorious money-laundering centers. The oligarchs used their political pull to create loopholes in financial laws so they could evade taxes and international financial-monitoring bodies. Using influence, the oligarchs funneled much of Russia's capital flight-- estimated at $20 billion annually by the State Statistics Committee -- into safe havens abroad. Related Analysis: Putin's Quest for the West U.S. Campaign Presents Benefits for Russia

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