On August 25, 2022 the Financial Action Task Force (FATF) published the final report ("Mutual Evaluation Report (MER)") on the audit of Germany. As a result, it should be noted that Germany has implemented considerable reforms over the past five years to better detect and combat money laundering activities and terrorism financing. These reforms are bearing fruits. However, further efforts are needed to optimize the effectiveness of prevention measures.

Poor domestic agency coordination and use of financial intelligence

The problems are not new but have long been known and discussed across agencies for many years. They include national coordination between the law enforcement agencies of the individual federal German states. While in the past the respective state criminal investigation offices sometimes conducted parallel investigations in an uncoordinated manner due to a lack of information flows, the creation of the financial intelligence unit (FIU) has already improved effectiveness in recent years. Nevertheless, the FATF has detected optimization potential here in the scope of its audits. It expects proactive risk prevention and improved availability and use of financial intelligence by the FIU. This includes, for example, access to bulk data and analytical tools to increase the effectiveness and efficiency of the FIU analyses and to enable more intensive coordination and collaboration of FIU and law enforcement agencies. These findings need to be analyzed, not as a theoretical exercise but in cooperation with specialists and practitioners. Thereafter, implementation should take place as soon as possible, ideally with the involvement of the planned new German federal anti-money laundering authority.

Germany's cash intensity as a risk

In principle, the FATF has addressed cash intensity and unlicensed money transfer service providers as a particular risk. The fact that Germany is considered a cash-intensive country and that organized crime has taken advantage of this in the past to place incriminated money is not a new finding. Economic developments, especially the European interest rate policy, have led to a flight into tangible assets in recent years. The real estate sector is a case in point. One of the FATF's main criticisms is that real estate transactions in Germany can still be conducted in cash. For the banking industry, this means that there must be an even stronger focus on cash transactions than in the past. However, as a result of cost pressure and falling margins, institutions have increasingly switched to processing their services in connection with cash transactions via ATMs. Certainly, the regulation of the proof of origin for cash deposits above €10,000 has led to a sensitivity among obligated parties. However, the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin - Federal Supervisory Authority for Financial Services) communicated in its journal of August 2021 that the institutions can take into account the specifics of their respective business relationship in order to achieve a risk-oriented and practical procedure. This naturally leaves plenty of scope for design and interpretation for the banking industry. This leaves the obligated parties free to decide by which customers and in which form the proof of origin needs to be provided. Countries such as Spain, with an upper limit of €2,500, and Italy, with a maximum amount of €1,000, have already shown that such problems can also be addressed differently. Cash deposits above this amount are rejected in principle.

Problem area money value transfer services

Informal money value transfer services (see also MVTS in the #AML glossary) represent a particular problem area. While registered and established MVTS providers observe the legal requirements and are sensitized by the FIU to conspicuous facts or indicators, the informal MVTS are the focus of the FATF. Cases such as the large-scale raid by the North Rhine-Westphalian State Criminal Police Office (LKA NRW) on November 12, 2019, in which large amounts of cash and gold bars were seized from a jeweler’s in the Duisburg area, are seemingly just the tip of the iceberg. In total, more than 200 million euros were smuggled abroad without any name or sanction check. This way, the FATF addresses one of Germany's main problems: The prevention and control of Designated Non-Financial Business and Professions (see also DNFBPs in the #AML glossary) (FATF recommendations 18 and 23). The result of the audit of this group of obligated parties was one of the main points of criticism. It attested that Germany needs to make considerable efforts in a timely manner to meet the requirements of the FATF.

With this finding, Germany is in good company because countries such as Great Britain, Switzerland or the United States of America were attested as having the same deficit level. Even The Netherlands, which was highly praised on the day of the publication of the German report, is facing the same challenge. A first beneficial step would be to centralize the more than 300 supervisory authorities in Germany for this area. This should be accompanied by the establishment of uniform standards and appropriate, risk-oriented audits − similar to those which are known from the banking sector. Coordination with the above-stated countries would also be beneficial to achieve synergy effects and to define objectives and measures jointly, ideally in coordination with FATF.

Implementing asset recovery effectively

The topic of asset recovery was also addressed. The objective is to confiscate the illegally acquired asset values from the offenders. Germany evidences massive progress here. However, Germany still has a long way to go before it can match the effectiveness of other countries in this area. While in Germany the burden of proof still lies with the state, other countries have long since demonstrated how asset recovery can be implemented effectively. Even if there are initial moves in Germany to abolish the system of shifting the burden of proof, it remains to be seen to what extent such cases will be decided positively by the courts.

In Italy, defendants must prove that they are not involved in illegal business. There, a villa can be confiscated unless the owner can prove that it was purchased with legal funds. The situation is similar in Great Britain. British courts can force suspects to disclose the origin of their assets. They have the option of confiscating assets until the beneficial owner explains where the funds came from.

FIU problems

There has been considerable criticism of the effectiveness of the FIU, the anti-money laundering unit based at customs. This also comes as no real surprise because the media have already repeatedly and emphatically pointed out in recent years that there are obviously problems with the processing or follow-up of cases. Issues such as the pending suspicious activity reports (SAR) in the Wirecard scandal, the search of the FIU's premises due to investigations by the Osnabrück public prosecutor's office, and the large number of generally unprocessed cases at the FIU in the past have not been explicitly addressed. However, they lead to a negative perception among the population, the obligated parties and ultimately by the FATF. Despite all the scolding, the FIU must also be credited for its dependence on the information provided by the reporters and its quality. If the FIU receives SARs that are incomplete or contain incorrect data, the FIU's possibilities are limited, also in terms of international cooperation. You can find out which impact poor data quality can have on compliance in the #rethinkcompliance blog. 

Challenges

That Germany is willing to meet the FATF's requirements is demonstrated by the paradigm shift anti-money laundering announced by Finance Minister Christian Lindner, including the creation of a new federal authority. However, this alone will not solve existing problems. It will require enormous efforts and cooperation with the different public authorities and sectors to make the work effective. This applies not only to the financial sector, but to a large extent also to the non-financial sector and DNFBPs already mentioned above.

Germany must report to the FATF within one year on the measures taken and progress made. Therefore, there is no time to wait for things to come. The BaFin, other obligated parties and the financial sector are facing major challenges in order to even begin to meet the FATF's expectations.

The death of Abu Bakr al-Baghdadi, the leader of ISIS in 2019, led to the immediate appointment of Abu Ibrahim al-Hashimi al-Qurashi as the following leader of the Islamic State.^[1] He was an ex-Iraqi army official, who had served Saddam Hussein, as well as a policymaker and was killed in a US raid in northern Syria earlier this year.^[2] Also, he was placed on OFAC’s Specially Designated Global Terrorist list raising the question: Is this really the beginning of the end of violent terrorism perpetrated by one of the most powerful extremist organisations in modern history? Maybe not. Given the diminishing importance and influence of IS in recent years, several pro-ISIS offshoots are beginning to regroup with the hope to revive IS with any means available, including the recruitment of FTFs and the reception and utilisation of their returnees in their respective home countries. These offshoot organisations include multiple militant groups in Southeast Asia, such as Tawhid-wal Jihad, Katibah Nusantara (a group responsible for 2016 Jakarta Terrorist attacks), the Maute Group, FAKSI (a group from Java, Indonesisa pledging allegiance to ISIS) and many more. There already is a growing concern of FTFs being recruited via social media by several ISIS affiliates, sympathisers, and returnees from the Asian Pacific area.^[3]

This article evaluates the threats posed by FTFs and the systems currently deployed to identify and assess the tactical and evasive methods used by foreign fighters.^[4] Moreover, this article attempts to understand the movement, financial profile and transaction patterns and the potential red flags leading to the detection and prosecution. Finally, the article aims to serve as an additional source of knowledge on FTF profiling for compliance officers, anti-money laundering practitioners, and financial analysts in the counterterrorism landscape.

Who are the Foreign Terrorist Fighters (FTFs)?

In order to respond effectively and efficiently to imminent re-emerging terrorist threats, it is imperative not only to identify the mechanisms of FTF transactional and behavioural patterns, the geographical emanation, transit and destination hubs as well as FTF returnees, but also to comprehend the FTF definition as described in the UNSC resolutions 1373 (2001), 2462 (2019), and 2178 (2014).

According to the UNSC resolution 2178,

“foreign terrorist fighters (FTFs) are those individuals who travel or attempt to travel to a State other than their States of residence or nationality, and other individuals who travel or attempt to travel from their territories to a State other than their States of residence or nationality, for the purpose of the perpetration, planning, or preparation of, or participation in, terrorist acts, or the providing or receiving of terrorist training , including in connection with armed conflict.”^[5]

FTF planning, preparation and deployment require funds, so it is important to understand the geographical footprint and phases of FTF movements. This includes the point of origin, the transit routes and the various means of funding used to enable FTFs to carry out terrorist activities at the designated spots. Below snippet highlights commonly used methods for movement of funds involving FTFs.

Surveys of APG members including law enforcement and intelligence agencies have revealed that typically licensed and unlicensed remittance companies, wire transfers and cash withdrawals at home and abroad have been extensively utilised by the foreign fighters and their recruiting agents.

Re-Emergence & Drivers of FTF Activities

Part of the reason why ISIL offshoots are targeting Southeast Asia for recruitment is the influence of ISIS extremists on new militants, who view the group as the true bearer of the jihadi principles they have long upheld. Another factor for FTF re-emergence in the Southeast out of Daesh/ISIS is the affirmative influence of former members’ biased accounts on new militants, whose motivations are a complex mix of social, economic, cultural, ideological, and personal reasons. However, the following inexhaustive list sums up the main motivational factors for FTFs.^[6]

• Religious narratives within the eschatologically oriented and misguided people willing to live under the rule of the so-called caliphate
• Ideological conviction
• Desire to improve the poor political and humanitarian conditions attributed to the atrocities of Syrian Civil War and oppressive dictatorship in Syria (typically a conflict-ridden zone in a broader sense)
• Sense of belonging, adventure, respect, opportunities for economic advancement, employment, marriage, and other material benefits

Following the territorial collapse of the Islamic State in Iraq and the Levant in particular, FTF recruitment focuses its attention on individuals and their families that are detained in camps, returning to their countries of origin, or travelling to a third country as well as on children of foreign fighters. However, several states have revoked FTFs’ citizenships to prevent their return, rendering them stateless.

Usage of Financial Intelligence against FTFs

In addition to a more generalised approach for the identification of red flag indicators aimed towards terrorist activities, more detailed information could benefit private sector actors in detecting and disrupting suspicious transactions related to FTFs or terrorist financing activities.

Example: Information about a very specific geographical area that is alleged to be a terrorist hotspot will enable reporting entities in the future to both better manage their risk of exposure to terrorist financing as well as to report more actionable and useful financial intelligence.

Below illustration shows a typical pattern of movement of foreign fighters which is subdivided into four to five stages.

Prior to Departure

• Pre-planned cessation of account activity by FTF
• Account statements indicating sale of personal possessions prior to date of travel
• Airline ticket purchases in proximity to conflict zones
• Account activity indicating funds received from social assistance, student loans, or other credit products
• Donations to NPOs linked to terrorist financing activities
• Use of funds for other travel-related items

En Route

• Irrational circuit of travel routes to the conflict zone with multiple means of travel
• Notice about a travel to a third country via a conflict zone but financial activities indicating an incomplete journey
• Financial activity alongside corridor to a conflict zone
• Receipt of wires inside or along the border of a conflict zone

In Theatre

• Inward money transfers from friends and relatives or terrorist accomplices
• Account goes dormant
• Media coverage on individual travellers to conflict zones

Return

• Dormant account suddenly becomes active
• Receiving new sources of income
• Atypical domestic or international fund transfers

Current Challenges

The categorisation as FTF depends on domestic legislation, which is guided by the international standard definition of whether the suspected individuals are “FTFs” or the groups they join are “designated terrorist groups”. This can cause inconsistencies in the application of FTF terminology, which is why it is imperative to adopt a globally accepted standard definition that makes a distinction between the terminologies of FTFs, general terrorists and the ones related to an armed conflict.

Additionally, the current red flag indicators for FTFs are rather broad and heavily biased toward the geographic location of the transactions associated with travel to a conflict zone or border region without the ability to determine whether they are legitimate or illegitimate. Lack of such information as well as the common profile of FTFs remain a practical challenge not only for the definition and identification of FTFs, but also for the analysis of their financial, behavioural, and geographic movement.

The usage of cash transactions between unknown, unrelated individuals and the transnational nature of FTF transactions constitute additional challenges. As customs and border officials are the first line of defence in the fight against FTFs, including them in the policy framework could be beneficial for an effective identification of FTFs and an appropriate reaction to FTF activities.

Another challenge is the lack of a robust feedback channel: Transactional relationships between law enforcement agencies (LEAs) and financial institutes (FIs) lack feedback on the quality and usefulness of information, which remains a bottleneck for investigating agencies in their collaborative efforts against foreign terrorists. Domestic communication from the financial and private sector and FIUs to law enforcement agencies is a one-way channel.^[7] Feedback on a broad basis is important, not only in relation to specific cases. This is crucial to validate the correct flagging of information and how to improve reporting. This will help FIUs improve the refining of indicators, the quality and reliability of STRs as well as strategic and actionable intelligence.

Conclusion

While some APG members are continuously working on developing regulatory frameworks and strengthening their domestic AML CFT policies and procedures to prevent FTF activities and terrorism as a whole, other states have yet to establish (and, where already in place, reinforce) a well-defined AML framework to combat the financing of terrorism and intercept terrorist activities.

Governments also need to be mindful about the blurred lines of distinction between human rights violations, the categorisation of FTFs and armed conflicts versus a generalisation of terrorism. While several legal and compliance practitioners, FIUs and LEAs have investigated FTF related cases and developed a preliminary basis of red flags and indicators for the identification of FTFs, there still remain practical challenges to explicitly identify FTFs. At the moment, little data is available on incarcerated FTFs, as much of the information provided is unreliable and biased.

However, a combination of factors such as social and behavioural profiling of FTFs, geolocation and travel pattern analysis, understanding irrational account activity and a robust feedback communication between LEAs and FIUs will contribute to the preparedness against FTFs destabilising the region.

^[1]Islamic State group names its new leader as Abu Ibrahim al-Hashemi - BBC News

^[2]Islamic State leader Abu Ibrahim al-Qurayshi killed in Syria, US says - BBC News

^[3]Southeast Asian Analysts: IS Steps Up Recruitment in Indonesia, Malaysia, Philippines

^[4]Publication of Financing and Facilitation of FTFs and Returnees in Southeast Asia Report

^[5]Investigation, Prosecution and Adjudication of Foreign Terrorist Fighter Cases for South and South-East Asia (unodc.org)

^[6]Foreign Terrorist Fighters - Manual for Judicial Training Institutes South-Eastern Europe

^[7]Publication of Financing and Facilitation of FTFs and Returnees in Southeast Asia Report

As a country between tradition and modernity, Turkey has been exposed to a wide variety of political currents. However, various developments over the last few years have led to a massive economic crisis and a decline in the rule of law. Turkey is now ranked 117th out of 139 countries worldwide in terms of the rule of law in the current list of the World Justice Project^[1] (WJP).  In the region of Eastern Europe and Central Asia, it has even fallen to last place.

This divergence between European standards in existing legislation and conditions that lack the rule of law is also reflected in Turkey's anti-money laundering provisions. As a long-standing member of the FATF, Turkey has signed all major international agreements in the fight against money laundering and terrorist financing.

The signed conventions have been incorporated into Turkey's national legislation. In 1996, a money laundering law was introduced in Turkey.  In 2006, it was reformed to meet the international standards of the FATF.

An overview of the Turkish Money Laundering Act (MLA) shows the similarities with the German money laundering regulation in its structure.

If we look at the obligated parties under the MLA, it is also apparent here that they are essentially no different from the group of obligated parties under the German MLA.

Obligated parties under the Turkish Money Laundering Law (Kanun 5549):

• Banks
• Insurance companies
• Private pensions providers
• Capital markets, credit and other financial services
• Post and transport
• Gambling and betting activities
• Foreign exchange, real estate, precious stones and metals, jewelry, transport vehicles, construction machinery
• Those engaged in the trade of historical artifacts, works of art and antiques or brokering these activities
• Notaries, lawyers
• Sports clubs and other areas designated by the Council of Ministers

Despite the existing laws, their application in practice gives rise to criticism. 

The main criticism was that the country's supervision did not take sufficient action against high-risk sectors such as banks, gold and gemstone dealers and real estate agents. It is feared that terrorist groups, among others, are feeding their illegally acquired funds into the Turkish real estate market and integrate them from there into other sectors.  Due to the geographical proximity to Iran, Iraq, Syria and Lebanon and the relatively permeable borders to Turkey, there is also the concern that terrorist financing does not stop at the gates of Europe.^[2]

Furthermore, in October 2021, the FATF reacted to the continuing crackdown on the civilian population with the grey listing. The specific criticism was directed against Turkey's "Anti-Terror Law" to "prevent the proliferation of the financing of weapons of mass destruction". Contrary to its title, this law does not contain any punitive measures or control mechanisms against money laundering or the financing of weapons of mass destruction for terrorist purposes.  Instead, it authorizes the president to freeze the funds and assets of terror suspects.^[3]

Ultimately, Turkey's treatment of non-profit organizations was also the focus of the FATF's criticism.  The mere existence of criminal investigations on terrorism charges against a board member of initiatives, associations and foundations entitles the Ministry of the Interior and the government-appointed governors to suspend the persons concerned, paralyze the activity of the respective association and appoint a receiver in its place.^[4]

This led to Turkey being placed on the grey list by the FATF in 2021. For example, it was found to have deficiencies in the implementation and enforcement of anti-money laundering and counter-terrorist financing laws.^[5]

Already in 2019, the FATF's Mutual Evaluation Report analyzed Turkey's anti-money laundering and counter-terrorist financing measures and identified a number of shortcomings. As a result, seven priority measures were called for. These include, for example, developing strategies for the confiscation of proceeds and instrumentalities and filling gaps in the legal framework in order to fully comply with obligations regarding targeted financial sanctions related to terrorism. There was also a call for the development of a Turkish national strategy for the investigation and prosecution of various types of crimes related to money laundering.^[6]

The FATF addressed the supposed improvements in its follow-up process. In this process, the implementation of the FATF recommendations that had been criticized was addressed and a classification was made as to whether the criticized points had been remedied or at least partially remedied in the meantime.^[7]

„Asset Peace“

One aspect that was not mentioned in any of the justifications submitted by the FATF is the so-called "asset peace".  This Turkish law "Varlık Barışı", which translates as Asset Peace Law, has existed since 2008. This law was initiated to declare money, gold, foreign currencies and other capital market instruments from abroad and bring them into Turkey.

The content of this law aims to bring unregistered assets from abroad into Turkey without asking about the origin of the money brought into the country and without having a tax audit carried out in order to maintain the "asset peace".  Assets brought into Turkey under the asset peace are not taxed. This law has been in place for 14 years now, and is renewed every six months. The last time it was extended for another six months was on New Year's Eve on December 31, 2021.

Residents also benefit from this scheme.  Taxpayers who own money, gold, foreign currencies, securities and other capital market instruments as well as real estate that are located in the country but not included in the statutory general ledger records can declare them to the tax authorities and legalize them through the asset peace.  Eligible persons are individuals and legal entities.  The only condition is that the declared assets are brought into Turkey or transferred to an account to be opened with banks or brokers in Turkey within three months of the date of notification. Turkish citizenship is not required to benefit from the asset peace. The cash brought into the country is sufficient for a customs document.

The official rationale is that those with unregistered savings at home and abroad can now make their money official without fear of prosecution by the tax authorities. Retired auditor general and author Kadir Sev pointed out that implementing "asset peace" is one of the easiest ways to launder assets.^[8]

The law is an amnesty scheme according to which it is irrelevant from which sources the assets originate.  But it is precisely the examination of the origin of funds that is the basis of the fight against money laundering.  It is a contradictory approach to combating money laundering if, on the one hand, asset peace means that there are no checks on where the money or assets actually originate.  On the other hand, there are regulations in the Money Laundering Act that correspond to the international standards of the FATF. 

The money enters the country via banks, brokers and intermediaries.  This begs the question how such an arrangement can be reconciled with a bank's AML provisions.  Is it black money, bribe money or are these funds used to finance terrorism? These aspects are not taken into account, so that, by law, banks are not supposed to analyze these aspects at all and reporting to the Financial Crimes Investigation Board (MASAK) is not required.  This counteracts MASAK's very own task of combating money laundering.

Consequences

Assets that - for whatever reason - were previously exempted from state control can become legal and registered assets through the asset peace incentive, without the source of these assets being questioned and those affected being subjected to a tax audit. 

How can money laundering and terrorist financing be combated if the origin of the money is not questioned? Against the background of the country's geographical location, these circumstances hold enormous potential for laundering drug money and money from human trafficking in Turkey.  Tax evasion is also legalized by this scheme.  The tax amnesty removes the deterrent function and decreases the willingness to pay taxes voluntarily. The decline of the Turkish lira is driving more and more people into poverty. The impact of tax evasion, money laundering and corruption, according to a report by the UN body for transparency and accountability, is that resources needed to fight poverty caused by tax evasion, corruption and financial crime are exhausted.^[9]

Against the background of such a law, it seems more than questionable that asset peace is not mentioned in the deficiencies in the fight against money laundering and terrorist financing criticized by the FATF. Even if the criticized circumstances that led to Turkey being placed on the grey list were all remedied, the question arises as to how a scheme such as asset peace can be brought into line with a FATF membership that is committed to combating money laundering and terrorist financing. 

At the same time, asset peace represents a major risk factor with regard to money laundering. This raises the question of whether the FATF actually did not notice this scheme or whether it was deliberately left out.

While granting some legitimacy to tax amnesties by invoking supposed benefits in terms of addressing economic challenges, it must not be the case that illicit assets are legitimized under the guise of asset peace.

Ultimately, Turkey will have to decide sooner or later whether it wants to continue on this path or credibly be a fellow combatant of the international community in the fight against money laundering and terrorist financing.

Capital amnesty also in Russia

Russia is currently under economic pressure due to the sanctions imposed as a result of the invasion of Ukraine. The Russian rouble, like the Turkish lira, is plummeting. For these reasons, a so-called "capital amnesty" was enacted in Russia. This means that money taken abroad beyond the reach of the tax authorities can return to Russia without the threat of penalties or taxes.^[10] However, this is nothing new in Russia. The Russian government has already passed amnesty laws in the past. As with asset peace, the purpose was to repatriate financial resources located abroad. This offer was intended to provide the Russian economy with urgently needed liquid funds. In return, this was made possible without subsequent payment of taxes.^[11]

Even more intensively than in the first amnesty attempt in 2015, Russians are being offered to close the companies they control abroad and bringing back the money without having to pay tax on it afterwards.^[12] 

History of capital amnesty in Russia

Russia had introduced an amnesty for past tax and foreign exchange offences in 2014, when the country was struggling with massive capital outflows, low oil prices and sanctions from the West over the Ukraine dispute.^[13] This first amnesty scheme was in place from 2015 to 2016, providing exemption from liability for tax and criminal offences, as well as regulatory offences related to declared assets. The amnesty had rarely been used and expired in mid-2016.

The second stage of the amnesty scheme was implemented from March 1, 2018 to February 28, 2019 and covered activities carried out before January 1, 2018. Due to the low take-up of the first amnesty scheme, new laws on the second stage of the amnesty were passed before the new presidential term:

• Federal Law No. 33-FZ “On Amendments to the Federal Law "On Voluntary Declaration of Assets and Accounts in Banks by Individuals” and “On Amendments to Individual Legal Acts of the Russian Federation" of 19.02.2018
• Federal Law No. 34-FZ “On Amendments to the First and Second Parts of the RF Social Code...” of 19.02.2018
• Federal Law No. 35-FZ “On Amendments to Article 76-1 of the Criminal Code of the Russian Federation”^[14]

For example, changes were made such as the abolition of the 13 per cent tax on retrieved funds. The tax exemption extended to funds in accounts at foreign banks and to foreign accounts that were closed before January 1, 2018.^[15] However, the essence of the amnesty scheme remained untouched.  Those claiming the amnesty were required to submit a special declaration to the Russian tax authorities, thus disclosing information about their assets and bank accounts abroad, as well as their shareholdings in foreign companies (including controlled companies). The amnesty covered violations of both foreign exchange and tax laws contained in the Criminal Code (Art. 193, 194, 198, 199, 199.1, 199.2), Administrative Offences Code (Art. 15.1-15.6, 15.8, 15.11, 15.25) and Tax Code of the Russian Federation.^[16]

The third stage of the amnesty scheme was to last until March 1, 2020. The targets of the amnesty were now investors and businessmen who are willing to transfer their funds to Russian accounts and move their foreign assets to the special administrative areas in the Kaliningrad and Primorye regions.^[17] Individuals can benefit from this, provided they move their funds from foreign to Russian accounts as well as re-register their foreign assets in the Russian offshore zones.

Commonalities and legitimacy

As with asset peace in Turkey, the Russian "capital amnesty" does not require disclosure of the source or origin of the money. In both countries, it is not only their own nationals who can take advantage of these schemes. The measures apply to Russian nationals and foreigners with a settlement permit. Like Turkey, Russia is a member of the FATF. In June 2013, Russia joined the FATF, committing to adhere to the FATF guidelines and benchmarks in its legislation. Here, too, the amnesty schemes cannot be reconciled with the essence of the FATF, the fight against money laundering and terrorist financing. 

The capital amnesty laws in both Russia and Turkey aim to generate capital flows into the country in order to be liquid again. The examples of Russia and Turkey demonstrate that autocrats introduce measures to cushion themselves in the face of economic difficulties - even if this opens the door to money laundering and violates their obligations under their FATF membership.

^[1] The World Justice Project (WJP) is an independent, multidisciplinary organization whose aim is to document the development of the rule of law around the world, to outline developments and to promote the rule of law worldwide.

^[2] See blog post: What are the consequences of Turkey's inclusion on the FATF grey list?

^[3] See blog post: What are the consequences of Turkey's inclusion on the FATF grey list?

^[4] See blog post: What are the consequences of Turkey's inclusion on the FATF grey list? 

^[5] See blog post: What are the consequences of Turkey's inclusion on the FATF grey list? 

^[6] FAFT, Anti-money laundering und counter-terrorist financing measures - Mutual Evaluation Report 2019, Page 10 Priority Actions

^[7] FAFT, Anti-money laundering und counter-terrorist financing measures – 1^st Enhances Follow-up Report & Technical Compliance Re-Rating

^[8] www.haber.sol.org.tr/haber/kara-para-aklamanin-en-kolay-yolu-erdoganin-varlik-barisi-aski-308261

^[9] www.giz.de/en/downloads/170330_factsheet_BMZ_Steuer.pdf

^[10] www.puls24.at/news/politik/russland-droht-westen-mit-harten-strafmassnahmen/258923

^[11] www. ostexperte.de/oligarchen-ziehen-geld-aus-europa-ab/

^[12] www.diepresse.com/5374305/wie-die-russischen-oligarchen-geld-aus-europa-abziehen

^[13] www.handelsblatt.com/politik/international/russland-putin-will-devisen-zurueckholen/20790790.html

^[14] www.roedl.net/fileadmin/user_upload/Roedl_Russia/Newsletter/deutsch/Newsletter-Mai-Juni-2018.pdf

^[15] www.handelsblatt.com/politik/international/russland-putin-will-devisen-zurueckholen/20790790.html

^[16] www.lex-temperi.de/aktuelles/news-anleger-und-geschäftsleute-profitieren-von-der-russischen-kapitalamnestie

^[17] www.lex-temperi.de/aktuelles/news-anleger-und-geschäftsleute-profitieren-von-der-russischen-kapitalamnestie